2023 is shaping up to be a good year for stock market investors. Already this year, a lot of shares have produced double-digit returns. Looking ahead, I see scope for further gains. But what are the best stocks to buy now?
Travel stocks
One of my top ideas for H2 is travel stocks. With Covid-19 now well behind us, the travel industry is booming. I’ve seen this first hand in London, where there are tourists everywhere right now. But the data backs it up. Earlier this month, flightradar24 recorded the most commercial flights (134k) across the world in one day since it began tracking data.
Now my top pick in this area of the market is Airbnb, which is listed in the US. It should be benefiting from the current boom in travel. And as a ‘platform’ company, it has plenty of long-term growth potential.
But there are plenty of other ways to play this theme. For example, there are hotel operators such as Intercontinental Hotels Group, mobility companies such as Uber, and airlines such as easyJet and IAG (airlines can be risky investments though).
Payments companies
Another area of the market I’m bullish on right now is payments businesses.
The electronic payments industry is already huge, at around $2.5trn. However, in the years ahead, it’s set to get much bigger. According to GlobalData, the global digital payments market is set to grow by around 14% a year between now and 2030. This industry growth should create plenty of opportunities for investors.
One of my top plays in this industry is a UK small-cap Alpha International. It’s an FX risk management company that also has a payments business. And the payments side of the organisation is growing rapidly. Last year, revenues from this division climbed 41%.
Of course, small-cap stocks can be volatile. So I wouldn’t recommend going all in on Alpha International shares. Other payments stocks I think are worth considering include Mastercard and Visa (which tie in well with the travel theme), and PayPal, which looks very cheap right now.
Healthcare shares
Finally, I like healthcare. This sector hasn’t performed very well this year. With investors focusing on tech/artificial intelligence, this area of the market has been ignored.
I think this has created a great buying opportunity. In the short term, many healthcare companies should benefit from the normalisation of the industry post Covid. Meanwhile, in the long term, a lot of companies look set to benefit from the world’s ageing population.
One of my top picks in this sector is FTSE 100 company Smith & Nephew, which specialises in joint replacement technology. I see it as well-placed to capitalise as the number of related procedures escalate.
I also like AstraZeneca, which is focused on cancer drugs, Edwards Lifesciences, which specialises in artificial heart valve technology, and UK small-cap Ergomed, which provides specialised services to big pharma companies.
