What a difference a week makes. The investor optimism we have seen as the global lockdown has eased evaporated in spectacular style this week following dire economic forecasts from both the OECD and the Federal Reserve, and fears that a second wave of coronavirus cases is emerging in the US.
We have been cautioning on the disparity between the stock markets and the economic reality for a few weeks here at The Armchair Trader and it seems that investors are now starting to wake up to the situation with this weeks correction.
In line with the wider market performance, our King of 34 Recovery Stock Competition picks have endured a tough week with all but five stocks seeing a share price fall. Our top 5 stocks after week 5 are ITM Power (+87.1%), Zoom (+56.3) Square (+29.1%), Rio Tinto (+24.9) and Huya (+17.4%) with Huya replacing Burberry on our top 5 leaderboard this week.
If you haven’t seen our competition before now, you can read about it here.
This week, we are focusing on five stocks that have seen big moves: ITM Power, Zoom, Burberry, Microsoft and Just Eat Takeaway.
Hydrogen energy equipment manufacturer ITM Power LON:ITM released a trading update this week, showing that the business has a growing and healthy order book and a reasonable £38.5m worth of cash in hand. However, the updates contained caution that COVID-19 has caused some modest delays in specific projects which are expected to be short-lived. The share price has fallen significantly from last weeks highs of 352p on the new but we remain optimistic that this company is well placed at the forefront of climate change technology.
A popular choice in our competition, cloud based meetings, messaging & conferencing provider Zoom [NASDAQ: ZM] continues to impress. Announcing first quarter results last week, the business saw sales grow by 169% as profits increased to a quarterly record, the annual revenue forecast nearly doubled and earnings expected to grow even more.
Fashion retailer Burberry LON:BRBY has seen its share price falter this week on news that UBS have changed their rating to SELL. The share price has quickly recovered some ground as the global lockdown has eased and the broker has moved to address the new levels. For the team here at The Armchair Trader, the fundamentals are still in place and the business is well placed for recovery as retailers open their doors to the general public.
With the Nasdaq hitting a record 10,000 for the first time earlier in the week on the back of positive investor sentiment, Microsoft [LON:MSFT] managed to be one of just 5 stocks on our list of 34 this week that posted share price gains. Despite being off its highs as a result of the midweek sell-off, the stock is showing itself to be a reliable performer as part of the big tech recovery.
Just Eat Takeaway [LON:JET] confirmed this week that it wants to merge with US peer GrubHub. The $7.3 billion, all-share deal would see GrubHub’s investors taking a 30% stake in the combined entity, which would be the largest food delivery service in the world outside of China. Subject to approval from shareholders in both companies and potential interest from competition regulators, the share price has fallen in line with the wider market in recent days. However, the business clearly has ambition and investors will watch the merger closely with interest.
Our King of the 34 performance table to 11 June 2020
| Company | % change |
| ITM Power | +87.1 |
| Zoom | +53.3 |
| Square | +29.1 |
| Rio Tinto | +24.9 |
| Huya | +17.4 |
| Burberry | +16.8 |
| CIBC | +12.8 |
| Chorus Aviation | +11.9 |
| Walt Disney | +11.5 |
| Flutter Entertainment | +11.4 |
| Homeserve | +9.4 |
| AVEVA | +7.2 |
| Mastercard | +6.3 |
| Harvia | +5.9 |
| Unilever | +5.0 |
| Reckett & Benckiser | +4.7 |
| Regeneron | +3.8 |
| Microsoft | +3.1 |
| Rentokil Initial | +1.2 |
| BP | +0.9 |
| Netflix | +0.2 |
| Dexcom | -0.4 |
| WM Morrison | -1.0 |
| Remedy Entertainment | -2.2 |
| Hikma Pharmacuetical | -3.5 |
| Equinix | -3.7 |
| Shopify | -3.9 |
| Pets at Home | -4.7 |
| Just Eat | -6.9 |
| Ibstock | -7.4 |
| Eli Lilly | -8.7 |
| Forterra | -10.3 |
| Pfizer | -13.5 |
| Newmont | -13.7 |
- Find out more about our King of the 34 stocks and see our latest updates
- How did our stock picks get on in May?
Data sourced from SharePad. The UK’s no.1 investment data & analysis software for Private Investors as voted for by FT/Investors Chronicle readers. Discover the advantage at www.sharescope.co.uk/sharepad.
