Your top-tipped global stocks of 2021

2020 was a year of shocking, frustrating, and sometimes thrilling firsts. The first global pandemic in a lifetime. The first time a company hit $2 trillion. The first time someone with a child named X Æ A-12 became the world's richest man. 

We here at Livewire Markets have also taken a swing at a "first", collecting your stock picks on the global companies you believe will soar into 2021 and beyond. The top end of the list reads like a who’s who of the world’s largest companies, led by trillion-dollar market-cap juggernauts. But overall, it’s perhaps as noteworthy for what didn’t make the upper echelons as for what did. 

It was surprising to see local tech darling Atlassian receive just 13 of your votes. Also intriguing was the lead commanded by your top-tipped global stock, Amazon, with 1,270 votes between it and second place. 

Taking a broader view, more than 70% of the total reader votes for global stocks were distributed across 50 companies. This is more concentrated than for Australian large-caps, where the top 50 stocks received just over 50% of the total votes. This makes sense when you consider that investors are almost always less familiar with offshore companies than their local counterparts.

In the following wire, we take a tour of the top-10 companies you nominated as the best performing global stocks for 2021.

But before we do ... By publishing this list, we are sharing information from the Livewire readership, and we hope it inspires ideas for further research. This information is not, nor is it intended to be, a set of recommendations. Please do your own research and seek advice from a professional. 

The #1 most-tipped global stock: Amazon (XNAS: AMZN) 

Percentage of votes in the top 10: 46%

Market cap: US$1.57 trillion

Share price: US$3120.83 as of market close 12/01/21

Amazon delivered an impressive investor return of almost 65% last year, generating US$14 billion in net income for the first nine months of 2020 - and surpassing its full-year 2019 figure by almost US$3 billion. It seems Livewire subscribers believe there’s still plenty of upside for the online retailer in 2021, despite the recent news that one of the firm’s joint ventures, Haven, will disband at the end of February. Formed in 2017, the non-profit healthcare company was a JV between Amazon, Warren Buffett’s holding company Berkshire Hathaway and US bank JP Morgan Chase.

But this isn’t likely to have a material effect on Amazon, which draws more than two-thirds of its revenue from online stores, its cloud-computing business AWS and third-party vendor services.

Of course, the big spike in consumer demand driven by COVID lockdowns in 2020 delivered a substantial tailwind for Amazon. While this is likely to abate slightly in 2021, many commentators believe there’s still plenty of scope for growth in online retail spend.

The #2 most-tipped global stock: Tesla (XNAS: TSLA) 

Percentage of votes in the top 10: 18%

Market cap: US$805.18 billion

Share price: US$849.44 as of market close 12/1/21

The second-placed Tesla grabbed a far smaller share of your votes than Amazon, despite delivering a staggering 700% in share price growth last year. The electric vehicle manufacturer has long been targeted by short-sellers, but the company founded by high profile industrialist Elon Musk continues to confound critics. Musk last year overtook Amazon's Jeff Bezos in the global wealth stakes, after his company hit its annual target of delivering 500,000 vehicles – almost 36% more than a year earlier.

Tesla charges ahead despite growing competition

Source: Nasdaq

But the company doesn't come without its challenges. Some of the world’s largest automotive companies are also rolling out electric vehicles, with General Motors, Mercedes Benz and Volvo some of the most recent to announce EV launches. And Musk himself, who has been the subject of several lawsuits and controversies, may also pose a threat. With most of his personal wealth tied up in Tesla stock, owning more than 18 million shares, any sudden sale of these could drastically sink the company's share price.

The #3 most-tipped global stock: Apple (XNAS: AAPL) 

Percentage of votes in the top 10: 14.6%

Market cap: US$2.23 trillion

Share price: US$128.80

Apple takes out third place in your global stock list, receiving around 150 votes behind Tesla. The consumer technology firm is one of the “FAANG” cohort of US tech firms, alongside Facebook, Amazon, Netflix and Google parent company Alphabet. Each of these companies has greatly benefited in recent years as investor money has poured into technology growth stocks.

The iPhone 12 launched at the end of 2020. But it needs to smash sales expectations to justify Apple’s PE multiples, which currently sit around 50% higher than levels of recent years.

Yet, as Kauri Asset Management’s Michael Smith points out, the company’s US$2 trillion market cap now far outweighs the entire ASX, and Apple’s influence in its own index the S&P500 continues to grow. 

The #4 most-tipped global stock: Alibaba (XNYS: BABA) 

Percentage of votes in the top 10: 6.1%

Market cap: US$612 billion

Share price: US$225.60 as of 12/1/21

Alibaba is a giant but recently things have begun to look a little shaky. Not only did Jack Ma ran afoul of the CCP last year after he publicly criticised the regime’s regulatory practices, the Ant Financial Group was also kyboshed just as it was about to list. Ma hasn’t been seen in public for a couple of months. Some Livewire commentators late last year voiced concerns about Alibaba’s governance practices. Of late there are even whispers of the CCP nationalising the company.  

For now, however, it remains a formidable enterprise. In addition to China e-commerce, which comprises around 70% of revenue, the company’s business lines include digital media and entertainment platforms, international retail marketplaces, cloud computing, logistics services and innovation initiatives.

The #5 most-tipped global stock: Microsoft (XNAS: MSF) 

Percentage of votes in the top 10: 5.4%

Market cap: US$1.62 trillion

Share price: US$214.93 as of market close 12/1/21

Source: Nasdaq

Founded by Bill Gates more than 45-years ago, Microsoft has long been a household name in personal computer software. And even now, 20 years after Gates stepped down as CEO, the company remains a popular global growth stock. Having shifted with the times, Microsoft’s cloud solutions have taken off, its Office365 platform alone used by more than 250 million business users. And as Montaka Global’s Chris Demasi said last year, Microsoft’s annual revenues from Office more than tripled to US$24 billion over four years.

The #6 most-tipped global stock: Alphabet (XNAS: GOOG)

Percentage of votes in the top 10: 3.5%

Market cap: US$1.18 trillion

Share price: US$1737.43 as of market close 12/1/21

Alphabet, the parent company of search engine Google, sits in sixth position in our global stocks list. The California-based conglomerate is a collection of companies that also include its R&D business X, high-speed internet and cable TV company Fiber, healthcare research firm Verily, urban design firm Sidewalk Labs and drug company Calico.

One of Australia’s most successful investors, Magellan’s Hamish Douglass, is a big fan of the company. “Alphabet is well-placed to provide investors with compounded returns for years to come,” he told us in November.

The #7 most-tipped global stock: Square Inc (XNYS: SQ)

Percentage of votes in the top 10: 1.6%

Market cap: US$102.6 billion

Share price: US$227.52 as of market close 12/1/21

Thousands of Australian businesses – and investors – signed up with embattled point-of-sale payments company Tyro might be wishing they’d opted for Square Inc instead. The homegrown Tyro’s local terminal outages have now run into their second week, leaving shop owners stranded and wiping about 30% off the company’s share price. On the other hand, American payments company Square, which provides point-of-sale software and hardware for merchants in the US, Canada, Japan and Australia has seen its stock continue to climb. Square shares are up around 230% from January 2020. And Livewire readers see a lot of blue-sky ahead yet for the company.

The #8 most-tipped global stock: BHP (XNYS: BHP) 

Percentage of votes in the top 10: 1.5%

Market cap: US$183.2 billion

Share price: US$71.95 as of market close 12/1/21

Something of a mystery inclusion in the list, the “big Australian” mining company is one of the largest ASX listings but is also part of the S&P500. I can only guess this is why it made it into this list. In addition to ranking eighth here, BHP also features in the large-caps list for 2021, as discussed here.

Almost 12 months ago, Airlie Funds’ Matt Williams declared the company was a Buy, as did Tribeca’s Jun Bei Lu. And the price of iron ore, which comprises the vast majority of BHP’s revenue, has continued to climb further, hitting seven-year highs at the end of 2020, despite booking some of the sharpest falls early in the pandemic-driven market rout.

The #9 most-tipped global stock: Disney (XNYS: DIS) 

Percentage of votes in the top 10: 1.4%

Market cap: US$318.6 billion

Share price: US$175.99 as of market close 12/1/21

The Walt Disney Company (XNYS: DIS) was among a couple of companies dubbed “double-winners” last month by Michael Frazis  of Frazis Capital – alongside Square, which was mentioned earlier. 

The firm’s fast-growing streaming video on demand business Disney+ saw an uptick in subscriptions during global lockdowns. Disney is also tipped to see a sharp uplift from its theme parks, once mass numbers of visitors are again admitted to Disneyland, presumably when global inoculations have reached a critical mass.

The #10 most-tipped global stock: NIO (XNYS: NIO) 

Percentage of votes in the top 10: 1.2%

Market cap: US$96.7 billion

Share price: US$62.04 as of market close 12/1/21

The other non-US domiciled company to make the list is NIO, a Shanghai-based EV company shaping up as China’s answer to Tesla. Just this week, the company announced its ET7 sedan, a 1,000-km range battery-powered vehicle taking on the likes of not only Tesla but also BMW and Audi, who have also thrown their hats in the EV ring.

What 1000% growth looks like

Source: NYSE

Shares in the US$92 billion company are up more than 1200% since early 2020, including a jump in gains since the latest launch, which will mark the third in NIO’s model line-up. Ellerston Capital's Mary Manning discussed the company in December, also naming a few of its competitors in China.

A more promising year ahead

After the annus horribilis of 2020, there’s little doubt 2021 will be better in many ways. And given the strong showing of US-listed companies among our readers’ global picks, they’re largely optimistic.

The above list contained a few surprises though notably the low number of ex-US companies. As mentioned in the article, given the higher profile of North American firms we probably shouldn’t be surprised, but it’s perhaps a little disappointing more South-east Asian firms didn’t make the list. Only Chinese firms NIO and Alibaba represented for the region.

It was also surprising that all but one of the nominated companies – BHP – are growth stocks, given the buzz that we’ve heard in recent months about the ascendancy of value stocks.

Given this is our first inclusion of global questions within the survey, it’s great to have now set a benchmark by which we can track changes over the following years. Thanks for your participation in the survey and we look forward to your continued involvement in future iterations.

My colleagues James Marlay and Ally Selby have broken down your picks among Australian stocks for 2021, both large-cap and small-caps. Click the following links to read them:

• Top picks in Aussie small-caps
• Top picks in Aussie large-caps

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