If you’re an Aussie investor looking to diversify into global stocks, Josh Gilbert’s current picks should catch your eye.
Most people have probably heard of some of the popular leaders of the stock market including the FAANG stocks (Facebook, Amazon, Apple, Netflix, Google), as they are the companies that dominate the tech universe.
But did you know that there are plenty of other options for Aussies looking to diversify their portfolios beyond the obvious big names?
Here are five hidden gems on overseas stockmarkets that are currently making waves in their respective fields. I think these global stocks should be on investors’ radars in Q4 2021 and beyond.
1. SoFi Technologies (NASDAQ: SOFI)
With a market cap of USD$14.61 billion is a surprise that US-based all-in-one personal finance company/neobank SoFi Technologies, hasn’t made quite the impression down under.
Whilst the company doesn’t have a presence just yet in Australia, it’s definitely making headlines globally as a major fintech player to watch.
In fact, this week SoFi Technologies’ stock rallied surged more than 13 per cent after Morgan Stanley initiated coverage with an overweight rating, calling it a “powerful revenue growth story” as it gains market share in the consumer finance space.
Recently entering the market via a SPAC in June 2021, SoFi Technologies was originally launched as a solution to help people refinance student loans and has since transformed its lending offerings to mortgages, consumer loans and credit cards.
In 2020, SoFi Technologies acquired payment software company Galileo for USD$1.2 billion, which has accelerated the company’s growth even further.
Since its listing, SoFi Technologies’ shares have climbed over 75 per cent and its customer base has grown by 113 per cent year-over-year (as of Q2 2021) to 2.6 million. The company has also recently set a record quarterly revenue of USD$231.3 million, up 101 per cent year-over-year.
2. Wise PLC (LON: WISE)
British money-transfer company Wise PLC (formerly known as TransferWise) debuted on the market in London’s first ever direct listing in July 2021 with a lofty valuation of USD$12 billion.
Since this time, it’s built a lot of momentum in the global fintech space, as it moves around 2.5 per cent of all cross border payments globally. It’s share price has also gained 15 per cent since the initial listing.
Currently, Wise PLC processes around USD$73 billion in transaction volume and has over six million customers, including 305 active business customers.
Claiming to be around 8x cheaper than traditional banks, Wise PLC is proving to be a business that is pretty profitable. From the fiscal year 2020 to 2021, Wise PLC’s profits increased by 60 per cent to USD$147 million.
In September 2021, Wise PLC continued to thrill investors when it launched index investing, which will allow its customers to essentially convert cash to stock assets.
3. Innovative Industrial Properties Inc (NYSE: IIPR)
Innovative Industrial Property Inc was the first and only real estate investment trust (REIT) that focuses specifically on the regulated US cannabis industry listed on the New York Stock Exchange (NYSE).
With a market cap of USD$5.7 billion, the company has little to no market competition, owning 74 properties across the US and 100 per cent of properties currently leased.
While cannabis remains illegal on the federal level, many US states have legalised the plant for either medicinal or recreational use. Which means interest in the space continues to grow almost daily.
In its Q2 earnings, Innovative Industrial Properties Inc’s revenues topped USD$48.9 million, growing by 100 per cent year-over-year. The company’s shares have climbed by 28 per cent year-to-date and 81 per cent in the last year alone.
The company’s strong dividend of around 2.5 per cent is also likely to help the company’s growth moving forward. As well as the fact that it’s one of the least volatile companies in the broader cannabis sector.
4. SentinelOne (NYSE: S)
SentinelOne is a Californian-based cybersecurity company, which was publicly listed in June 2021 at USD$35 per share. This initially gave the company a valuation of USD$8.9 billion, surpassing CrowdStrike’s initial valuation of USD$6.7 billion in 2019. This makes SentinelOne the highest-valued cybersecurity IPO in history.
Now, only a few months later, SentinelOne trades in the mid USD$60s and holds a market cap of over USD$16.9 billion. The company’s shares have climbed by 49 per cent year-to-date, as the cybersecurity sector continues to gain more traction with the transition to the cloud.
In Q2 2021, SentinelOne’s total revenue reached USD$46 million, up 121 per cent year-over-year. The company’s customer count also grew by more than 75 per cent year-over-year to over 5,400 customers, as of July 31, 2021.
With such quick growth, investors will be watching the cybersecurity company closely to see if this can be sustained.
5. ASML Holding NV
Dutch holdings company ASML Holding NV is the world’s supplier to the semiconductor industry, providing chipmakers with everything they need from hardware, software and services to mass produce patterns on silicon and lithography.
As the semiconductor industry has been plagued with shortages over the past 18 months, ASM Holding NV has benefited from increased demands of its products.
In its Q2 2021 report, ASML Holding NV demonstrated substantial growth with net sales of USD$4.6 billion, a gross margin of 50.9 per cent and earnings per share of USD$2.91. This performance is expected to continue into Q3, as the company anticipates net sales between USD$6 billion and USD$6.2 billion and a gross margin between 51 per cent and 52 per cent.
In July 2021, ASML Holding NV announced its new share buyback program, which is expected to be executed by 31 December 2023. As part of this program, the company intends to repurchase shares up to an amount of USD$10.4 billion, and will no doubt place it in the good books for investors.
By exposing themselves to stocks beyond the obvious popular picks, investors are able to diversify their portfolios with a range of different companies in innovative, growing sectors. As always, investors should do their research into the companies they want to invest in and ensure they never invest more than they can realistically afford.
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