Six businesses at the forefront of the digital transformation of the global economy, including BT Group and Cisco Systems, have been included in Bloomberg Intelligence’s new “100 Investment Ideas to Watch for 2021” (BI100) report. The list identifies 100 global public companies, credits, market strategies and ETFs that BI analysts believe will benefit from significant fundamental catalysts and developments in 2021.
As international markets and institutions are navigating the ongoing pandemic, as well as major political transitions across the globe, the BI100 aims to provide a globally inclusive portfolio and outlook for 2021 to both the business and investor community alike.
In terms of digital transformation, the six businesses are BT Group, Capitec, Cisco Systems, CrowdStrike, Rocket Companies and Twilio.
According to the BI100, BT’s earnings momentum is expected to turn positive in 2021 as regulatory headwinds give way to growth from 5G mobile and full-fibre broadband sales. The U.K. carrier’s margins are likely to benefit from a multiyear cost-transformation programme that will automate and digitize key business processes. In addition:
- Years spent beefing up its software have positioned Cisco Systems Inc. to capitalize on the migration to next-generation networks and to weather the changing dynamics of the corporate office. Broader acceptance of flexible workplaces increases the allure of the company’s WebEx Collaboration, Wi-Fi, and remote access connectivity and security tools.
- Momentum for CrowdStrike Holdings Inc. in the cloud security business is building as it adds customers and sells existing clients on new products. While Cisco, Palo Alto, and other peers are trying to catch up with acquisitions, CrowdStrike remains an investor favorite thanks to its broad product offerings and ease of deployment.
- Rocket Companies Inc.’s technological edge and huge spending on client acquisition are distinct advantages in the fragmented U.S. market for mortgage origination. The company will have to stay on its toes to guard against rivals, however, because ultralow interest rates continue to make it much easier to catch up.
Bloomberg Intelligence’s Anurag Rana said: “The pace of digital transformation could see a rapid acceleration in 2021 that goes beyond communications and e-commerce, as the economy recovers and businesses spend more on cloud technology and on-premises products. Cloud, security software, hardware upgrades and digital payments may be the biggest areas of investments.”
This year’s new BI100 report represents an expansion from BI’s traditional 50 ‘companies to watch’ annual list. The BI100 specifically analyzes how critical themes such as green recovery, smart healthcare, and digital transformation will be impacted by public health and policy changes. Bloomberg Intelligence’s team of over 350 analysts spent months evaluating and assessing over 2,000 public companies across 135 industries to devise the BI100.
Bloomberg Intelligence Global Director of Research David Dwyer (pictured above) said: “At a chaotic time when the Covid-19 pandemic is upending entire industries and causing extreme market volatility around the world, the BI100 provides investors with analysis of where key industries and financial products may be headed throughout the year. Using detailed yet accessible language, our analysts help investors at any level understand the current landscape of business. The list is supported by much more detailed analysis and data on the Bloomberg Terminal.”
Bloomberg Intelligence’s Chief Equity Strategist Gina Martin Adams (pictured above) adds: “As markets look to the fits and starts of the emerging economic recovery and additional stimulus from U.S. policymakers to drive the overall trend, the BI100 offers analysis focused on data and deep industry expertise to identify enduring opportunities for the year ahead. This report serves as a guide to actionable insights in a pivotal year that will change how and where people work, how individuals and companies will be taxed, and which industries will thrive in the post-pandemic economy.”