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The pandemic changed our lifestyles dramatically, and that impact has been reflected in the stock market. Some companies that had been thriving saw their business models shattered. Others experienced an unexpected surge in business.
The hospitality industry, office property REITs, the travel sector, and brick-and-mortar retailers were among those that saw revenues and profits plunge. At the same time, e-commerce companies, transportation firms, supermarket chains, and leading-edge telecommunications companies saw a surge in business.
I publish a weekly newsletter, the Internet Wealth Builder. When the pandemic hit, we had to move quickly to help readers navigate the rapidly evolving stock market environment. Last March, when the devastating impact of the pandemic became apparent, my contributing editors and I began to look at stocks that we felt were positioned to do well in the face of these new challenges. Not all performed as expected, but our track record was quite respectable. Here are some of the pandemic-related picks we introduced. Prices are as of Feb. 5.
Gilead Sciences Inc. (NSD: GILD). In the early days of the pandemic, we started to search for companies that were leaders in the development of a vaccine or treatment for Covid. Gilead qualified on the treatment side, with its anti-viral drug remdesivir. Early trials indicated some success in speeding recovery, and remdesivir was used to treat President Trump when he contracted Covid. But the stock never took off. It was recommended at US$69.36 and closed on Feb. 5 at US$65.83.
Canadian Solar Inc. (NSD: CSIQ). Green energy companies turned out to be one of the main beneficiaries of the pandemic year as oil and gas stocks tumbled. We added Canadian Solar to our list in mid-March when it was trading at US$16.80. The stock closed at US$58.17 on Feb. 5 for a gain of 246%.
Teladoc Health Inc. (NSD: TDOC). Virtual visits with a doctor were already gaining wider acceptance, but the pandemic changed what had been a convenience into a necessity. We introduced this stock in late March at US$169.50. It closed on Feb. 5 at US$276.84, for a gain of 63%.
J.B. Hunt Transport Services Inc. (NSD: JBHT). On a harrowing drive in late March from Florida back to Toronto, I was struck by the fact the highways were almost deserted except for transport trucks moving essential supplies. On my return, I recommended this big U.S. trucking company at US$89.76. It closed Feb. 5 at US$142.07 for a gain of 58%.
Pfizer Inc. (NYSE: PFE). We continued to look for pharmaceutical companies that we felt would be in the forefront of vaccine development. In April, I recommended Pfizer, which turned out to be the first company to bring a vaccine to market. The price at the time was US$35.38. It is now US$34.89 for a small loss of 1.4%.
DocuSign Inc. (NSD: DOCU). Working from home meant important documents had to be signed legally but remotely. We introduced DocuSign in May, which provides the software for such transactions. The price at the time was US$116.56. The stock closed on Feb. 5 at US$246.01, up 111%.
Metro Inc. (TSX: MRU). Most retail businesses had to close down or reduce capacity, but grocery stores thrived. In June, we advised buying Metro Inc. at $57.42. The stock hit a high of $66.25 in September but has since pulled back to $55.06, slightly below the price at the time of the recommendation.
The Clorox Company (NYSE: CLX). The demand for cleansers and sanitizers kept companies like Clorox working overtime. I recommended the stock in June at US$197.57. It flirted with US$240 in July but has since pulled back to US$191.65.
Pinterest Inc. (NYSE: PINS). In late June, we added social media platform Pinterest to our list. With people encouraged to remain at home, on-line communications flourished, and this company gained millions of new users. We advised buying the stock at US$23.21; it closed on Feb. 5 at US$77.84 for a profit of 235%. In the same issue, we also recommended Facebook Inc. (NSD: FB) at US$238.79. It is now trading at US$266.49, a gain of 11.6%.
Johnson & Johnson (NYSE: JNJ). The hunt for leading vaccine developers brought us to JNJ in June. Its product is behind the vaccine frontrunners by a few months, but some experts believe it could eventually dominate as it requires just one shot. The stock was recommended at US$143.83 and is now at US$169.99, up 18%.
Roku Inc. (NSD: ROKU). Staying at home meant higher demand for television and streaming services. That boosted revenue for Roku, which provides platforms for most streaming companies. We recommended the stock in August at US$146.85; it has now nearly tripled in price, to US$432.68.
We already had many other companies on our list that did well during this pandemic year. They include UPS, FedEx, Amazon, Walmart, Costco, Microsoft, Shopify, TFI International, Brookfield Energy Partners, and Chegg Inc.
Looking ahead, our focus in 2021 will shift to companies that we believe will perform well in the post-pandemic world.
Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.
Follow Gordon Pape on Twitter at https://twitter.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.
Notes and Disclaimer
© 2021 by The Fund Library. All rights reserved. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.
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