Do We Need to Be Cautious of These FTSE Stocks Amid the Pandemic?

Even though the global financial markets have shown some signs of recovery in the last 20 days or so, there is still a lot of volatility and quandary in the minds of the investors. This dilemma is being driven by the persistent threat of the Covid-19 pandemic, which is not showing signs of slowing down any time soon in all across the world, with the double whammy of the oil price conflict between the OPEC nations and Russia, which drove the WTI Crude Oil May prices to below US $0 per barrel for the first time in history, primarily because of an excess of supply, and contract holders not wanting to take delivery amid excess storage issues. And hence, despite the market recovery, there are certain companies and stocks that the investors should be a bit cautious given the overall economic environment.

Centrica Plc (LON:CNA) is an energy and utility services providing company based out of Windsor in the United Kingdom. The company is also involved in the exploration and production of oil and gas, and the recent oil price war, followed by the Oil Futures price crash in the US has led the company’s stock price down as well. The conflict for the price of oil doesn’t seem to end anytime soon, and hence, for the investors, caution need to be applied while taking investment decisions.

CNA Stock Price Performance

By the time of writing this report on 21st April 2020, at 09:00 A.M, the Centrica Plc stock was trading at a price of GBX 31.30 per stock on the London Stock Exchange market, a decline in the value of 2.55 per cent or GBX 0.82 per stock, compared to the previous trading day which was reported to be at GBX 32.12. The company’s market capitalisation was estimated to be GBP 1.869 billion, with regards to the current market price of the company's stock.

The company’s stock price has yielded a negative return of approximately 54.10 per cent in the last six months since 21^st October 2019. It has also yielded a negative return of around 65.60 per cent in the last three months since 21^st January 2020, while also yielding a negative return of 26.10 per cent in the last one month as well since 20^th March 2020. At the time of writing, the beta of the firm's stock was recorded at a value of 1.47.

Marks and Spencer Group Plc

Marks and Spencer Group Plc (LON:MKS) is a global fashion retail chain that operates out of the United Kingdom. The company, apart from the woes of the overall retail sector, had a really poor 2019 in terms of revenue performance as well, especially in the UK, due to low consumer spending on luxury fashion items. This was mainly driven by the uncertainty around Brexit. The company has never been able to fully recover from the last year’s disappointing performance and hence the stock of the company should be opted after thorough consideration.

Royal Mail Plc (LON:RMG) is a provider of postal and physical mail services in the United Kingdom. The company specialises in all kinds of couriers as well as logistics systems starting from letters and postcards to even larger objects through its vast network of services. It has around 50 depots spread across the length and breadth of the country, while also delivering through its parcel service in Ireland as well as certain other parts of Europe as well. Since the country was put into lockdown, mail and other logistical services had been completely stopped, as this could become one of the biggest reasons for an increased spread of the infections of Coronavirus. The halting of services meant that first, people moved onto other modes of communication from traditional mail services and secondly, the company has had to experience huge amounts of revenue drops during this period. This could also mean that if, throughout this period, people get habitual of other modes of deliveries, Royal Mail Plc could experience even more losses of revenue in the future and hence, it would be a good idea for investors to be vigilant for opting the stock on the London Stock Exchange.

RMG Stock Price Performance

By the time of writing this report on 21st April 2020, at 11:00 A.M, the Royal Mail Plc stock was trading at a price of GBX 141.74 per stock on the London Stock Exchange market, a decline in the value of 0.67 per cent or GBX 0.931 per stock, compared to the previous trading day which was reported to be at GBX 142.67. The company’s market capitalisation was estimated to be GBP 1.43 billion, with regards to the current market price of the company's stock.

The company’s stock price has yielded a negative return of approximately 32.90 per cent in the last six months since 21^st October 2019. It has yielded a negative return of around 32.00 per cent in the last three months since 21^st January 2020, while also yielding a negative return of 5.20 per cent in the last one month as well since 20^th March 2020. At the time of writing, the beta of the firm's stock was recorded at a value of 1.16.

Comparative Share price chart of CNA, MKS and RMG

(Source: Thomson Reuters) Daily Chart as on 21 – April - 2020, before the closing of the London Stock Exchange Market