Our 2020 Picks: How did we get on in August?

Like many, the Armchair Trader team were off on our holidays in August. In our absence, it seems the financial markets took a bit of a breather. 

Having experienced such an extraordinary year with COVID-19 affecting the way we live our lives and the effects it has had on the global economy and the rollercoaster ride we’ve experienced within the financial markets, August has afforded investors some time to take stock of events.

Last month wasn’t without its moments. Trump continued to threaten a trade war escalation with China and the markets are still very sensitive to any developments there. The Dollar has been weakening against the major currencies following the Federal Reserve’s position shift on interest rates, moving from a 2% target to a 2% average, providing plenty of ammunition for monetary stimulus as and where the US economy needs it.

COVID-19 headlines are still understandably dictating whether the bulls or the bears are in charge. News of outbreaks and vaccine developments proving a constant theme. The swings are narrowing but with Europe moving towards the winter months and children heading back to school, we are entering a critical period.

The Armchair Trader’s August picks

One of our favourite stocks at the beginning of the year, ITM Power LON:ITM has come off a little in August, and investors are going to be wondering whether they are going to see further upside from this alternative energy play. However, the business is well positioned to benefit from further innovation in the sector with the European Union for example recently unveiled an energy systems integration strategy to help develop renewable hydrogen, using mainly wind power and solar energy. We added ITM Power to our picks on 20th August.

We called Hammerson LON:HMSO as our Short of the Week on 24th August. It’s a business that has massive exposure to retail shopping, an industry struggling to deal with the change of consumer habits and the effects of the cornavirus.  Having continued to fall in August, the stock has rallied in September but the team here at The Armchair Trader feel this could be a temporary respite as the industry outlook for many retailers appears to be very bleak indeed.

We added near patient molecular diagnostics company, Genedrive LON:GDR, to our picks on 25th August Some of the initial enthusiasm has gone out of the shares recently, but the core value behind Genedrive’s technology is still there. We are still a long way off mass vaccination and the ability to carry out rapid on-site testing is going to be a vital development – validation testing is happening in the US, so we anticipate first ‘live’ use of the enabled Biomek device for COVID in the US in September.

Here’s how our picks are performing

*Prices as of close of play on 30th August 2020

Removed from The Armchair Trader’s current watchlist for next month: Verkakkaupa.com Reason: For our larger company picks, we include a 10% stop loss designed to minimise losses. We can’t win them all.
Royal Mail, Hammerson Reason: short term trade, 10% stop loss in place

• Small Cap Stocks: Genedrive, Tern, Conroy Gold
• Three Quick Facts: ITM Power, TMT Investments, Admiral
• Three Quick Facts: IAG, ITM Power, Capita

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.

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