Aussie investors looking to buy the dip in US stocks in May have gone for some predictable – and not-so-predictable – brands.
When we think of US stocks, we tend to think of companies like Google or Netflix.
However, the US stock most-bought by Australians in May was Ping An Good Doctor – a Chinese healthcare company – according to data from online social trading platform, eToro.
Here are the top 10 US stocks bought by Australian investors in May:
Ping An Good Doctor
In April, China’s leading online healthcare platform, Ping An Good Doctor, saw a share price surge of 9 per cent, as investors worried they would miss out on the rally after the pandemic.
“It seems the virus outbreak is being contained in China, and investors worry that they may miss out on the rally and are driving the new economy stocks to go up,” Kenny Wen, wealth management strategist at Everbright Sun Hung Kai told South China Morning Post in.
“Generally, new economy stocks may have strong earnings growth potential, which is why investors are willing to give them a valuation premium.”
The stock, which most Aussies wouldn’t recognise, was the single-most traded stock on eToro during April and May.
“Microsoft, as with much of the technology sector, has benefitted from the increased demand for cloud services, communication software, and collaboration software during the lockdown,” eToro analyst Mathew De Corrado said.
“Overall, the information technology sector has outperformed the S&P 500 since the start of the year, with May being the third best performance for the sector over the past 12 months.”
Vegan meat company Beyond Meat benefited from officially entering the Chinese market by partnering with Starbucks, which was seen as a huge win.
In fact, Beyond Meat’s share price rose 35.9 per cent in May alone, and coronavirus played a hand in its rise.
“During the first quarter, COVID-19 shutdowns have impacted meat processing plants (mainly pork and beef), giving Beyond Meat the opportunity to capitalise and gain market share,” De Corrado said.
Some classics like Amazon, Disney, Facebook and Netflix still appeared on the list, in part due to the upswing of the technology sector brought on by the pandemic.
“Part of the reason the technology sector has been so strong is the migration of workforces from offices to the home, which has resulted in a rapid adoption of technology,” said De Corrado.
“Moreover, the decline in typical forms of entertainment, such as restaurants, bars and cinemas has driven demand for online entertainment services such as Netflix and Disney.”
Interestingly, SolarEdge, a home solar battery provider, and HomeDepot, a large hardware and homewares chain, also experienced a surge in popularity.
“Home Depot has benefited from the lockdown, with many homeowners now finally having the time to complete their DIY projects,” De Corrado said.
The recurring theme in these stocks?
“Australian investors using eToro’s platform overwhelmingly backed firms that had either weathered coronavirus well or those that are expected to take off once lockdown ends,” said De Corrado.
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