10 Australian shares to invest in during COVID-19

The past year has seen plenty of sharemarket winners and losers. As a vaccine rollout nears, here’s the stocks set to overperform.

A booster shot is on the way for Australian companies as COVID-19 vaccines are prepared to be rolled out across the nation.

Several stocks that have struggled during the pandemic should perform better as restrictions ease, investment specialists say.

Travel-related companies have been hit hard and are popular picks to recover, but the benefits of a broad vaccine rollout should flow through to many other businesses, they say.

Here are 10 shares that should benefit from Australia’s coronavirus vaccination program.

1. QANTAS

Aviation and overseas travel suffered more than most other industries during the pandemic and despite doubling in value since March’s COVID crash, Qantas shares are still only trading at 2017 levels.

Investment newsletter Marcus Today portfolio manager Chris Conway said Qantas was a clear winner from a vaccine.

“We’re all busting to travel again – safely,” he said.

“Expect a flood of demand once people have confidence.”

Qantas planes were grounded for much of 2020. Picture: NCA NewsWire / Jeremy Piper

2. CROWN RESORTS

“Most of the company’s venues have been closed through COVID,” Mr Conway said.

“A vaccine sees them open and trading once again.”

Crown shut down Perth casino operations last week amid WA’s new lockdowns, and it is also awaiting a casino inquiry report that could impact its Barangaroo gambling licence in Sydney.

3. SYDNEY AIRPORT

Just like Qantas, the business was hammered first by the national lockdown and then by state border closures and overseas travel bans.

“Australia’s major gateway to the rest of the world should rally once local borders fully open and, later, international borders reopen.” Mr Conway said.

Catapult Wealth director Tony Catt said ASX-listed Auckland Airport was similar to Sydney Airport: “I think they are important assets, even if you can’t travel overseas”.

4. CSL

The biotechnology giant tasked with manufacturing more than 50 million COVID-19 vaccine doses has had a bumpy ride on the stockmarket, with its shares almost 20 per cent below where they were a year ago.

Mr Catt described CSL as a “standout number one pick” to benefit from vaccine rollouts.

“I think this will end up like the flu program where we are continually getting jabbed for the rest of our lives,” he said.

Nabtrade director of investor behaviour Gemma Dale said investors loved the long-term prospects of CSL.

“Their core business, the plasma side, will come back strongly when things are back to normal,” she said.

Coronavirus vaccine freezers at CSL Broadmeadows. Picture: Supplied

5. COCHLEAR

The bionic ear company is one of several large health-focused stocks that have lagged the overall sharemarket recovery.

Ms Dale said Cochlear could benefit from “getting back to doing some implants again”.

“Hospitals have been allocating all their resources to the virus,” she said.

6. XERO

Kardinia Capital portfolio manager Kristiaan Rehder said the distribution of COVID-19 vaccines should be good for the small and medium enterprise business sector, where cloud-based accounting company Xero operated.

“Any improvement in economic conditions is likely to see a slowdown in small business closures and potentially the pick-up in new business formations,” he said.

7. POINTSBET

“With the arrival of the vaccine we expect further COVID related disruptions to sporting events will decrease, leading to a larger number of sporting events on which gamblers are able to bet,” Mr Rehder said.

“We believe the opening up of sports betting across the United States is likely to accelerate.”

Flight Centre shut many of its stores during 2020. Picture: NCA NewsWire/Andrew Henshaw

8. FLIGHT CENTRE

Mr Rehder said the travel company had been operating at just 12 per cent of pre-COVID levels.

“However, sales will benefit as borders open, first domestically and then internationally,” he said.

Tribeca Investment Partners portfolio manager Jun Bei Liu said travel companies’ returns might be limited until enough vaccine was rolled out.

“By far the travel sector has been the most meaningfully impacted sector,” she said.

9. IDP EDUCATION

The $6 billion company provides student placement services and its share price has been strong, despite international travel bans, thanks to some positive stockbroker reports.

“IDP brings students from China and India into Australia to universities, and a successful vaccine rollout will bring a lot back,” Ms Liu said.

10. DEXUS PROPERTY GROUP

“Dexus owns a lot of office buildings, but people at the moment are still working from home,” Ms Liu said.

The business should benefit from the return of more workers to CBDs, as should other companies that own office towers and shopping centres.

@keanemoney