Viral Stocks - Stake United Kingdom

Viral Stocks

The winners and losers of the Covid crisis.

Quarantine, social-distancing, isolation and ‘unprecedented times’ may be how most remember 2020. But for the traders out there, the markets tell a slightly different story. One of opportunity, adaptability, impossibility and virality.

With portfolios plummeting early March, traders around the world feared a 2007 GFC repeat, with the S&P benchmark dropping by 26%.

But as Newton’s third law demonstrates, for every action there is an equal and opposite reaction, and in the blink of an eye the NASDAQ hit an all-time historic high just four months later in June. The most unbelievable rally the market had ever seen continued to defy the state of the world, driven largely by:

  • Bargain stocks going crazy.
  • Plummeting interest rates.
  • A highly anticipated Presidential election.
  • Vaccine success stories.
  • And of course, a boom in retail investing.

As the virus suppressed our daily activities the market unleashed. Mega stocks defied all logic, and new incumbents rode tidal waves. There’s certainly no denying that as we countdown the five biggest flagship stocks of the pandemic, where there is volatility there is always opportunity.

No 5. Peleton (+112%)

One hour of exercise a day wasn’t enough for some and as people turned studies into pseudo WFH office/gyms, the virtual exercise equipment media company rose by 112% from $29.74 to $112.05.

No 4. Netflix (+45%)

As some binged Netflix, others bought NFLX. There was no stopping this content powerhouse, who released loads of backed up content during the pandemic, seeing ever growing quarterly reporting ending the year up 45% to $476.62.

No 3. Amazon (+63%)

We all know the story of Bezos and Amazon, the most valuable share to make the top five, began the year at $1,898 before dropping to $1,689 when the pandemic broke out. Amazon’s widespread offering from web-services to AI technology complemented their core e-commerce distribution chain, seeing the stock absolutely tear away from competitors with a 63% pre-pandemic increase.

No 2. Slack (+90%)

It hasn’t all been smooth sailing for the business communications platform, starting the year at $23.02 and dropping further to $17.04 when the pandemic broke out. As people settled into work from home, Slack settled into the front seat, rising 76%. Most recently the company’s success has attracted a potential huge buyout from marketing automation megastar SalesForce.

No 1. Zoom (+491%)

Coming in at number one is the video communications company Zoom. Call it sheer luck or ingenious application by their customers, but as isolation set in around the world, businesses and families turned to alternative ways to stay together. From work meetings to family catch ups, concerts or comedy shows, Zoom reaped the benefits, rising from $61.02 in early March, rounding out to $362 today. Take me off mute, and share my screen… that’s a staggering 491% throughout the year. 

So whether it was a product poised for the right place and right time, or world-changers who had new levers to pull, the viral stocks of 2020 show no sign of stopping, accelerating into the new year with a gang of retail investors at their heels.

Reborn

The travel and resort industry has no doubt struggled across 2020, for obvious reasons. However, despite a volatile year even travel companies have seen positive growth in the recent months. At the announcement of each successful vaccine trial, investors have flocked to the market to take their stake in speculated comebacks.

Booking (-1.06%)

Booking owns and operates several travel aggregators including Booking.com, Kayak.com and Cheapflights, and when the pandemic initially broke out its value dropped by 38% to $1289.67. However, since then it has recovered by 150% up to a value of $2019.84.

Las Vegas Sands (-20%)

As consumer pockets became strapped, so did their appetite for risk. The value of this to American Casino and Resorts company nearly halved in March dropping by 43% to $40.39. But as venues opened back up, and people began thinking about life on ‘the other side’,  LVS has since hit the green on a 40% run. 

Disney (-17%)

Despite launching Disney Plus in late 2019, there was only so much one season of the highly anticipated Star Wars series ‘The Mandalorian’ could save. As resort traffic halted, Disney’s value dropped by 25%. Despite missing a big summer season, the NBA Disney Bubble kept the lights on for now. Disney jumping 7% in recent months. 

Royal Caribbean Cruises (-40%)

Infected cruise ships were one of the most concerning stories in the first month of the pandemic – so it was unsurprising that RCC saw a dire slump when the true scale of the virus became evident. However, it has since begun to recover and its value has risen by over 250% to $75.78 since the March doldrums – though RCC still hovers roughly 40% less than its market cap at the start of the year.

Delta Airlines (-30.5%)

Deemed to have had a greater economic impact to the airline industry than 9/11, Delta is one company barely holding on. Delta shareholders saw 40% of their value wiped clean as air travel was halted in March. And despite being only 30.45% down to date, the longer term implications of the necessity for business travel and cost of tourism may just prevent this stock from a full comeback (for now).

An investor who distributed $1000 equally between these five stocks at the beginning of the year would currently have a portfolio worth $784, down roughly 21%. Interestingly though, the same investment made at the trough of the drop would be up 59%, outstripping the S&P 500: maybe a testament to the optimism of the markets right now.

So while it may be cliche to refer to 2020 as ‘unprecedented times’ – there really is no more accurate term for this surreal year, both in the markets and out. The pandemic has reforged a lot of what we thought was here to stay and accelerated a lot of what we knew was coming. 

The question now for investors: will 2021 will be a reset to more conventional market dynamics or another year of transformation?