Covid crash anniversary: the stocks to own since February 2020

Two years to the day since the Covid pandemic wiped out global financial markets, and with another slump underway in reaction to Russia’s invasion of Ukraine, we look at the stocks that recovered best last time.

Exactly two years to the day after Covid-19 pandemic fears sent stock markets into freefall, there are some useful lessons for those investors now worried about today's Ukraine-led slump.

That's because a quarter of the shares currently listed in the FTSE 100 index are more than 20% higher than the session before 24 February 2020, when 3% was wiped from the value of the top flight due to a large spike in coronavirus cases in Italy.

The selling pressure lasted until 23 March 2020 when, despite lockdown measures in the UK and no vaccine in sight, there was a much-needed return of buying appetite.

The following months saw dividends sacrificed and the earnings outlook remain hugely uncertain, but with support from unprecedented levels of fiscal stimulus there was significant blue-chip momentum that lasted until the early part of this year.

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The pandemic-era stock that provides investors with the best example of why it often pays to sit tight during times of stock market turmoil is Royal Mail (LSE:RMG), whose shares were 119% higher than their pre-Covid level by last night's close.

The fortunes of the letters and parcels delivery business were transformed by the online shopping boom as the stock topped 600p last June. Shares have since fallen back to 371.3p, but it's still about 169% higher than the low point on 23 March 2020.

Source: SharePad

Other pandemic-era winners include gaming firm Entain (LSE:ENT) and discount retailer B&M European Value Retail SA (LSE:BME)

Recession fears meant mining stocks slumped at the start of the pandemic, but investors who held their nerve have been rewarded with a sharp rebound in commodity prices that ultimately resulted in this month's round of bumper dividend payments.

Glencore (LSE:GLEN) and Anglo American (LSE:AAL) shares, for example, are more than 200% higher than March 2020 as the rebuilding of China's economy boosted demand for aluminium and the low-carbon transition caused prices of transition metals such as nickel and cobalt to soar.

The pair are significantly stronger than where they were prior to the pandemic, with Glencore 90% higher than it was on Friday 21 February 2020, and the De Beers owner 66% higher in a performance closely matched by copper miner Antofagasta (LSE:ANTO).

Encouraged by ultra-low borrowing costs, speculative investors played the recovery by dramatically increasing their exposure to high growth stocks. Favourites included Tesla Inc (NASDAQ:TSLA), which became a one trillion-dollar company in 2021, and Amazon as the change in shopping habits strengthened its online dominance. 

Their performances provided a huge benefit for followers of Baillie Gifford's Scottish Mortgage Investment Trust (LSE:SMT), which is still 50% higher compared with February 2020 despite losing a big chunk of its gains in 2022's stock market rotation.

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Not all blue-chips have recovered to where they were prior to the pandemic, as 18 stocks are still at least 20% lower. The list of laggards is led by British Airways owner IAG (LSE:IAG), with the Omicron variant and other setbacks in the re-opening of global travel leaving its shares 62% down on their pre-pandemic level. Rolls-Royce Holdings (LSE:RR.) was 46% lower up until last night.

Housebuilders also feature heavily as the sector continues to be hit by uncertainty over the bill for cladding repairs and the outlook on interest rates. Taylor Wimpey (LSE:TW.), Berkeley Group (LSE:BKG) and Barratt Developments (LSE:BDEV) are all more than 30% lower than February 2020, despite a raft of City “buy” recommendations.

Outside the FTSE 100, the best performing stocks since the pandemic included Premier Foods (LSE:PFD) after a share price rise of 226%. Sales generated by a surge in home cooking meant the Mr Kipling and Bisto firm was able to pay down expensive debt and use savings from lower interest payments on funding investment in the business.

Source: SharePad

The focus on digital operations benefited magazine publisher Future as its shares surged 73%, while among AIM stocks podcast business Audioboom Group (LSE:BOOM) jumped 777%.

The best performance overall came from Quantum Blockchain Technologies (LSE:QBT), which is 1,010% higher than before the Covid crash after switching its focus to the development of technology for blockchain, cryptocurrency and quantum computing.

Source: SharePad