In the third of our monthly reviews, we look at the performance of the financial markets and how our picks have performed over that time.
The global Covid-19 pandemic has seen March 2020 provide investors with the most difficult market conditions since the financial crisis of 2008 and arguably, even greater significance.
The global lockdown has seen economic output fall and many industries buckle under the pressure. It remains to be seen what the landscape looks like when the virus has been contained and things start to return to some semblance of normality. A recession is extremely likely but avoiding a depression will be the challenge, the longer the lockdown continues.
Here at The Armchair Trader, we have turned our attention to the identification of stocks and other markets that we feel will recover well once the economy starts to move again. If you haven’t already, make sure you sign up for our newsletter so you don’t miss our research.
The Armchair Trader’s March picks
Our coronavirus hedge, Anglo-French biotechnology group Novacyt which is supplying the testing kits needed to detect COVID19, received FDA approval to supply to the US. This has seen their share price jump from 162p when we wrote about them on 18th February to its current level of 212p.
We added building product supplier Forterra to our watchlist on 27th February. The stock has fallen from 339p to 195p at the time of writing (we exited the stock at 304p on 9 March when it hit our -10% stop loss). Now, the construction industry has had a particularly tough time of things over the course of the month, as it did in the aftermath of the Brexit vote, but the sector is generally quick to recover providing the economic conditions allow, and Forterra would be well placed to benefit. We will be continuing to keep our eyes on this one.
We wrote about FMCG manufacturer Reckitt Benckiser on 16th March as a response to consumers increasing their purchasing of hygiene products and we’ve seen the share price rise from 5300p to 6068p at the time of writing.
Industrial group DCC was seen bucking the trend over the month. We wrote about them on 24th March following a 35% surge in share price. This hasn’t stopped the FTSE 100 business from improving its share price from 4888p to its current price of 5212p.
Streaming service Netflix has seen its service become a popular distraction for households on lockdown during the current crisis and our Nordic and US correspondent Raine Lahtinen wrote about them on 27th March. We’ve seen the share price continue to rise from $357 to $380 at the time of writing.
Raine has been following the fortunes of Remedy Entertainment since the start of the year and we have seen the share price up 29% in the year to date on the back of signed publishing agreements with a major publisher, Epic Games, for the company’s next two unannounced video games. The stock is currently at €17.85 at the time of writing.
Canadian battery materials specialist Nano One has seen it’s share price fall from its highs of 1.69CAD during February and is sitting at 0.97CAD, which is currently below the 1.16CAD level seen when we first wrote about this stock back in November. We do however feel that this stock is in a strong position financially and as the economy picks up, we will see them go from strength to strength. The Canadian government has just announced a further CAD 250,000 in support for this small cap tech stock.
A safe haven in Gold
As the coronavirus crisis deepened, we saw the price of Gold falling. Normally seen as a safe haven, our Editor wrote an interesting article about how the yellow metal has a history of falling alongside assets such as stocks and bonds during a market crash, only to recover quickly as central banks such as the Federal Reserve implemented their monetary easing policies.
Here’s how our March picks performed
|Company/Instrument||Start price||Current price*||Percentage change|
*price as of 7th April 2020; ** The Armchair Trader has a -10% stop loss in place and exited at 304p on 9 March.
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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