- There are many fundamentally sound businesses who have been through various market cycles and remain firm
- Ocado, Future, Games Workshop, Avon Rubber, and Petropavlovsk have yielded triple-digit returns for investors in the last three years
- Many businesses have started indicating that they can resume dividend pay-outs, which was not the case during the peak of the unprecedented crisis
Since the onslaught of the Covid-19 pandemic, UK stock markets witnessed bloodshed as they lost more than one-fifth in value. This was primarily triggered by panic-stricken investors who feared the impact of the deadly virus on the overall trading environment in the UK.
However, the UK’s economy has now slowly reopened, and most of the businesses have resumed trading activities with enhanced rules in place. Stocks too, have recovered most of the lost ground. Moreover, dividend seeking investors or people looking forward to income investment can now breathe easy as the businesses have started indicating that they can resume dividend pay-outs, which was not the case during the peak of the unprecedented crisis. Big businesses had slashed dividend during the peak of the Covid-19 crisis.
Although the UK had witnessed a sudden spike in the number of Covid-19 infected people, but a new lockdown is less likely to happen. The NHS and the British government are looking forward to stockpile PPE kits and critical medicines to fight against the coronavirus pandemic.
UK stock markets seem to have stabilised after facing a crash on 23 March 2020. London’s broader equity market index, FTSE 100 was hovering just under 6,000 mark. Just like the pandemic, the UK stock markets have witnessed a lot of crashes and recovery cycles. History tells us that pandemics are inevitable. A lot of wealth was destroyed during the peak of the unprecedented crisis, which left the investors high and dry. Therefore, investors should look forward to investing in businesses which can remain afloat and see through various market cycles.
In this article, we would be discussing 5 businesses, which have delivered resilient performance despite the carnage induced by the coronavirus pandemic.
(Source: Refinitiv, Thomson Reuters)
- Ocado Group Plc
General retailers seem to have been unaffected by the onslaught of the coronavirus. Instead, they have been witnessing higher sales volume as people have resorted to stockpiling the processed food items and groceries. Due to sharp increase in the speed of the shift to online shopping during the coronavirus pandemic, Ocado Group Plc (LON: OCDO) now stands tall with the competition in the industry, as the online grocer witnessed a huge rise in its market capitalisation.
Ocado Group’s 3 year Price % Change-794.1 %
YTD Total Return-107.9 %
The shares of Ocado group were trading at GBX 2,633 on 5 October 2020 (at GMT 12:40 PM +1), lower by 0.98% from the previous day close price.
- Future Plc
Global media platform, Future Plc (LON: FUTR) is likely to acquire US based premium digital entertainment publisher, CinemaBlend. This acquisition is aimed at bolstering the presence of the media business in the US market that could translate into 46 million new subscribers. The Company witnessed an increase in organic unique visitors in August of 25 per cent in UK and 40 per cent in the US. Despite the prevailing uncertainties due to Covid-19 pandemic, the Company is well-positioned to benefit from the shift to digital media and growing base of global subscribers.
Future’s 3 year Price % Change-545.90 %
YTD Total Return-34.70 %
Future’s shares were trading at GBX 1,998 on 5 October 2020 at GMT 12:56 PM +1, up by 2.36% from previous day closing price.
- Games Workshop Group Plc
People have resorted to several home entertainment options during the pandemic as they refrained themselves from going out. FTSE 250 listed miniature war gaming product manufacturing company, Games Workshop Group Plc (LON: GAW) declared a dividend of 30 pence per share In July 2020. The company recorded significant growth in operating profit, stood at £89.6 million in FY 2020 on constant currency in contrast to £81.2 million in the previous year.
Games Workshop Group’s 3 year Price % Change-407.60 %
YTD Total Return-71.8 %
Games Workshop Group shares were trading at GBX 10,450 on 5 October 2020 at GMT 01:18 PM +1, up by 1.16% from previous day closing price.
- Avon Rubber Plc
United Kingdom-based Technology Company, Avon Rubber Plc (LON: AVON) had an opening order book of £115.5 million; which is a good sign for the company. The Company has enhanced growth prospects for its Avon Protection with the completion of the Helmets & Armor acquisition. The Board of the company remains confident that the business is well placed to continue to deliver sustainable growth in the near-term. The Company has successfully divested its milkrite | InterPuls division recently for a total cash consideration of £180 million.
Avon Rubber 3 year Price % Change-365.40 %
YTD Total Return-111 %
Avon Rubber shares were trading at GBX 4,415 on 5 October 2020 at GMT 01:33 PM +1, up by 0.91% from previous day closing price.
- Petropavlovsk Plc
FTSE 250 listed Russian Gold miner, Petropavlovsk Plc (LON: POG) recorded a 42 per cent increase in total Gold production during the first half of 2020. In addition, the Gold miner witnessed a whopping increase of 39 per cent of total Gold sales during the period.
The Gold as a commodity had breached a level of $2,000 per ounce in recent months due to the prevailing macro-economic factors. The rising prices of Gold could benefit the company in the near term.
Petropavlovsk 3 year Price % Change-312.60 %
YTD Total Return-161.40 %
Petropavlovsk shares were trading at GBX 32.50 on 5 October 2020 at GMT 01:43 PM +1, down by 2.40% from previous day closing price.
There is a lot of uncertainty in the UK stock market with respect to the Brexit and a second wave of the coronavirus pandemic. Some people might fear putting their money in stocks as they would like to time the anticipated bottom. However, some investors might consider it as an opportunity to create positions at this point in time. Notably, an investor must consult his financial adviser or conduct a proper research before taking any positions in the stock market.