While the human cost of Covid-19 continues to dominate the global headlines (and rightly so), the socio-economic impact is becoming increasingly apparent with every single day. In the UK, for example, the economy shrank by 2.2% during the first quarter of 2020, with this decline the starkest since 1979.
Across the globe, a number of stocks and shares have also incurred significant losses, while even stellar indexes such as the Dow Jones and the S&P 500 have endured huge volatility.
After peaking at an all-time high on February 12th, for example, the Dow Jones reported record-breaking point losses on March 9th, 12th and 16th, while the S&P 500 and Nasdaq Composite followed suit during the following week.
However, it’s fair to surmise that some stocks have enjoyed unexpected growth during Q2, while the Dow Jones has actually increased by 4.4% overall through the close June 17th. Similar indexes have followed suit, but which stocks have performed particularly well during this time?
The Rise of Unconventional Stocks?
Interestingly, the S&P 500 has risen by an impressive 8% during Q2, with sectors such as healthcare, consumer discretionary and information technology performing particularly well and providing an unconventional route to profitability in the short and medium-term.
The IT sector was particularly buoyant, thanks largely to the global surge in remote working and the significant increase in ecommerce spending (we’ll touch further on this later). In fact, the information technology sector grew at an average rate of 17.2% in the three months through June 17th, while the price change also peaked at +48% in relation to 2019’s figures.
From the perspective of individual S&P 500 stocks, those in the healthcare sector (such as Abiomed) have also experienced significant growth.
This firm, which is a manufacturer of medical implant devices, saw its share value peak at 54.6% in the second quarter of 2020, and while its value is down in relation to 2019, it has delivered unexpected returns throughout the peak of the Covid-19 pandemic.
With a larger number of people working from home during the pandemic, there has also been a surge in demand for the type of cybersecurity products and services sold by brands such as Fortinet.
This company, which is based in California, specializes in key cybersecurity products like intrusion prevention software and firewalls and saw its share value increase by an incredible 49.3% between March and June 17th.
How to Capitalize on Growth Stocks in the Wake of Covid-19
Other firms that have fared well (and are projected to continue this trend as 2020 progresses) include those that are well-placed to capitalize on the growing demand for e-commerce.
This includes Walmart and Amazon, which boast considerable expertise in the sale and delivery of goods online and saw their share values increase by 9% and 25% in 2020 respectively.
This highlights the dynamic nature of the stock market as the prevailing conditions change, while it also suggests that investors must maintain an open and informed mind that can react to these changes.
This is also borne out by investment expert Downing’s Rosemary Banyard, who has spoken at length about the opportunities created by Covid-19 in-terms of targeting undervalued stocks that have impressive growth potential.
One such stock is Tristel, which is listed on AIM and specialises in the cleaning and disinfecting of hospital equipment and surfaces. Clearly, this firm has seen a significant increase in demand throughout the pandemic, while it’s relatively low starting value and mid-cap status offers the potential for increased returns over time.
These are important points to keep in mind, but there’s no doubt that an open and informed outlook can deliver considerable returns even in the wake of a huge global pandemic.
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