Key points:
- Materials and labour shortages are impacting ASX shares across various industries
- Dermot Ryan of AMP Capital highlights how investors' portfolios could benefit from the conditions
- Inflation gives points for and against some of the big healthcare names
Shortages have plagued Australian companies across numerous sectors in the past year or so. Unfortunately, the recent and sudden surge in COVID-19 cases has put pressure back on supermarkets to stay stocked. Despite this, there could be an opportunity for investors to benefit from this situation with certain ASX shares.
Whether it be materials or labour shortages, many companies are struggling to keep their footing in the current climate. A prime example of this that many people have witnessed is the bare shelves at supermarkets such as Woolworths Group Ltd (ASX: WOW).
However, one expert has named a few options up investors' sleeves outside of the COVID-19 battered ASX shares.
ASX shares to fend off the sting in Omicron disruptions
One expert investor recently offered insights into how a portfolio could be positioned to benefit from the current environment. According to AMP Capital portfolio manager Dermot Ryan, there are ways to potentially combat the shortage blues.
In an article by Ryan, the portfolio manager names local well-stocked retailers and key commodities as shortage hedges. Providing an example in the commodity space, the investor lists battery minerals as one segment to keep tabs on. Minerals such as spodumene/lithium have been piggybacking the decarbonisation trend and skyrocketed in the process.
Some high-profile ASX shares operating in the lithium space include Pilbara Minerals Ltd (ASX: PLS), Allkem Ltd (ASX: AKE), and Sayona Mining Ltd (ASX: SYA). All of which have doubled or more in value over the past year.
In addition, the AMP Capital portfolio manager noted other battery minerals such as nickel, cobalt, and graphite as recent winners. One company that has proven to be a remarkable performer in this space has been Novonix Ltd (ASX: NVX). Over the last 12 months, this battery materials play has enriched the pockets of shareholders by a staggering 547%.
What to watch for as wages inflate?
Inflation is another important factor playing into how ASX shares are performing. Woolworths has already had a rough start to 2022, with its share price tumbling 9% since the new year kicked off. This follows the supermarket giant revealing higher costs for doing business in December.
AMP's Dermot Ryan warned of other companies that will likely suffer a similar fate due to inflated wages and business costs. The ASX shares making this list included Estia Health Ltd (ASX: EHE), Regis Healthcare Ltd (ASX: REG), and Ramsay Health Care Limited (ASX: RHC).
Although, on a positive note — the inflationary pressures could result in an increased value for the healthcare infrastructure owned by these companies.
