36 FORTUNE FEBRUARY/MARCH 2021 THE BRIEF — GLOBAL OUTLOOK
together, the benefits of
e-commerce are actually
greater in China,” he says.
Besides shopping giant
Alibaba (BABA, $265), he’s
been buying lesser-known
Pinduoduo (PDD, $171),
a growing e-commerce
seller in China’s midsize
cities. (Pinduoduo, whose
share price nearly quin-
tupled last year, in August
replaced venerable Silicon
Valley data-management
company NetApp in the
Nasdaq 100.)
For a counterpart in
Latin America, Irwin
favors the region’s largest
e-commerce player, Argen-
tina-based MercadoLibre
(MELI, $1,984), which
has also built a fintech
business for paying and
lending that’s flourishing
in places like Brazil.
T. Rowe’s Tu, mean-
while, is betting on
Singapore’s Sea (SE, $233),
a major e-commerce force
in Southeast Asia that also
makes a viral video game
akin to Epic’s Fortnite,
as well as (what else?) a
digital payments business
that has taken off during
the pandemic. There’s a
reason the NYSE-listed
stock is now Tu’s top hold-
ing, right above Amazon.
“A company like Sea has
elements of Amazon in
its earlier years,” says Tu.
Investors would be smart
to own both.describes his focus as “the
picks-and-shovels way
to play this, as opposed
to trying to bet on which
miner will hit gold” by
buying pharmaceutical
companies. He owns Mas-
sachusetts-based Repligen
(RGEN, $217), whose equip-
ment is used to produce
and test biologic drugs,
as well as Minneapolis
firm Bio-Techne (TECH,
$357), which supplies
antibodies and reagents
to pharmaceutical labs.
“We sometimes call these
compounders,” Chung
says. “This isn’t going to
be the fastest-growing
company in the universe,
but we think it’s going
to continue to be a nice,
steady growth company
for a number of years.”
For other steady-growth
tech companies, look
no further than China,
the only major economy
that managed to expand
in 2020. The pandemic
sped up the shift to
e-commerce even more
acutely there, where a lack
of major chain retailers
combined with a dearth
of storage space in small
homes has long neces-
sitated more frequent
store runs—a particular
inconvenience given
heavy traffic congestion
and then, the virus, says
Fidelity’s Kalra. “So when
you put all those thingsand has continued the
streak since.
Other companies that
survived the pandemic
with minimal damage
will likely also get a
boost as normality re-
turns. Natasha Kuhlkin,
comanager of the PGIM
Jennison Focused Growth
Fund, is fond of Match
Group (MTCH, $148), which
owns more than 40 online
dating communities serv-
ing demographics that
range from Gen Z through
senior citizens. While
roughly 40% of hetero-
sexual couples now meet
online (up from 5% two
decades ago), according
to a 2019 Stanford study,
that share is still increas-
ing. Kuhlkin estimates
Match’s revenue grew
nearly 20% last year,
despite the damper that
masks and contagion
put on dating (thanks in
part to new in-app video
features). There should be
even more potential when
romance reverts to being
a less dangerous under-
taking: “We do expect
some reacceleration,” says
Kuhlkin.
Eventually, couples will
want somewhere to go on
dates again, which is one
reason why Dan Chung,
CEO and chief investment
officer of Alger, sees op-
portunity in restaurants,
particularly those that
have leaned into online or-
dering. Digital orders now
make up nearly 60% of
sales at Shake Shack (SHAK,
$108), where overall sales
were actually 4% higher in
the final quarter of 2020
than the year earlier—de-
spite the fact that many of
the burger joint’s locations
remain closed. Even if
online ordering shrinks
to half its current propor-
tion once people can dine
out again, “it’s going to be
30% of a company that’s
growing really rapidly,” says
Chung.
Underpinning restau-
rants’ and other shops’
ability to shift so quickly to
e-commerce are the digital
payments companies. But
e-commerce payments are
just one part of the busi-
ness at Square (SQ, $227).
Irwin of PGIM Jennison is
excited by the explosion in
use of Square’s Cash App,
which enabled people
to receive their stimulus
checks digitally as well as
trade stocks and Bitcoin
on their phones. “I don’t
think you’d see us own-
ing a traditional financial
institution—they just don’t
have the growth prospects
that really intrigue us,” she
says.
With the world’s gaze on
vaccines, no tech portfolio
would be complete without
technology-driven health
care companies. Alger’s
Chung is investing in a
handful of companies that
supply the tools and ma-
terials to develop mRNA-
based drugs, a therapeutic
technology rich with
research potential after the
success of vaccine mak-
ers like Moderna. ChungA LOT OF THESE COMPANIES HAVE BECOME THECONSUMER STAPLES OF TODAY. THEY’VE BECOMEAN INGRAINED PART OF OUR LIVES.