After leading the market in the first months of the year, the growth capacity of the financial, real estate and materials sectors will be restricted in the short term. The selection of high-quality stocks that have not seen an increased price is an effective strategy for investors from now to the end of the year.

The rate of return will have a significant difference between sectors: Photo: Internet

Viet Capital Securities Company (VCSC) said in the year-end period, cash flow will channel to goods stocks that have not seen an increased price. Particularly, consumption, healthcare, utilities, energy and industrial sectors have performed less well than the VN-Index. Meanwhile, non-essential consumer sectors saw movements in line with the VN-Index.

Although the stocks of domestic consumer sectors are suffering an additional impact from the fourth Covid-19 outbreak, this is only a temporary problem. The outlook for structural growth remains positive and the Forward Price-to-Earnings (P/E) for stocks like VNM, SAB and VRE have gradually declined. VCSC has included these stocks in its “defensive stock basket” for the final months of 2021, along with several utilities firms and other stocks with healthy balance sheets and attractive dividend yields.

Also with the strategy of accumulating good stocks that have not increased sharply, Agriseco Securities Company offers five criteria for selection, including good reputation, good brands; minimum liquidity of 50,000 stocks per session; positive profit; profit of the first half of 2021 increased strongly, higher than the price increase and valuation was cheaper than the average market price.

From these criteria, Agriseco selected four stocks. Of which, DHC had a profit growth of more than 78% in the first half of this year, while its stock price only rose by about 64% and the PE is currently at 11.75. TLG stock reported a profit growth of up to 929%, but the stock price fell 1% and the PE is currently at 8.41. IJC stock also grew 193% in profit while the share price only rose about 4% and its PE is currently at 6.05. TDM also recorded a profit growth of 114%, while the stock price grew only 11.5% and PE is at 11.58.

According to the reviewing list of Rong Viet Securities Company, three sectors have almost completed and exceeded the profit plan for the whole year, which are steel (98%), insurance (101%) and fertilisers (197%). Ten of 19 sectors recorded better-than-expected earnings, exceeding 50% of Rong Viet's 2021 after-tax profit forecast after the first half of 2021.

“This does not mean that the earnings of the rest sectors are less than expected. On the contrary, some companies will see strong profit growth prospects in the second half of 2021," said Rong Viet experts.

Rong Viet said the rate of return will have a significant difference between sectors due to the unequal impact of social distancing on enterprises. Therefore, sectors with attractive valuations and are less affected during the social distancing period will provide better investment performance.

Specifically, firms engaging in exporting goods and services with good growth potential in the second half of the year (NKG, HSG, FPT) and companies providing support services for international transport (GMD, PVT) will deliver high performance. This is based on the expectation that consumption demand among Vietnam's key trading partners will increase again in the near future. These partner countries already have relatively high vaccination rates, and this allows them to open up their economies more widely.

In addition, other sectors such as the essential consumer sectors are also expected to perform well as demand for packaged foods skyrockets after the long-term lockdown.