The pandemic changed our lifestyles dramatically and that impact was 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 real estate investment trusts, 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.
When the pandemic hit home in March, investors had to move quickly to navigate the rapidly evolving stock market environment. Through my columns in The Globe and Mail and contributions from contributing editors to my weekly newsletter, Internet Wealth Builder, I began to look at stocks that I felt were positioned to do well in the face of new challenges arising from the devastating impact of the pandemic.
Not all performed as expected but this track record was quite respectable. Here are some of the pandemic-related picks that were introduced.
Gilead Sciences Inc. (GILD-Q). 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 U.S. President Trump when he contracted COVID. But the stock never took off. It was recommended at US$69.36 and closed Friday at US$60.76.
Canadian Solar Inc. (CSIQ-Q). 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$37.95 on Dec. 11 for a gain of 126 per cent.
Teledoc Health Inc. (TDOC-N). Virtual visits with a doctor were already gaining ground 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 last week at US$199.58, for a gain of 18 per cent.
J.B. Hunt Transport Services Inc. (JBHT-Q). 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 Dec. 11 at US$138.89 for a gain of 54 per cent.
Pfizer Inc. (PFE-N). 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$41.12 for a gain of 16 per cent.
DocuSign Inc. (DOCU-Q). 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 Dec. 11 at US$225.49, up about 93 per cent.
Metro Inc. (MRU-T). 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 $59.27.
Clorox Co. (CLX-N). 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$201.73.
Pinterest Inc. (PINS-N). In late June, we added social media platform Pinterest to our list. With people encouraged to remain at home, online communications flourished, and this company gained millions of new users. We advised buying the stock at US$23.21; it closed on Dec. 11 at US$71.13 for a profit of 206 per cent. In the same issue, we also recommended Facebook Inc. at US$238.79. It is now trading at US$273.55.
Johnson & Johnson (JNJ-N). 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$152.95.
Roku Inc. (ROKU-Q). 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 more than doubled to US$330.87.
We already had many other companies on our list that did well during this pandemic year. They include United Parcel Service Inc., FedEx Corp., Amazon.com Inc., Walmart Inc., Costco Wholesale Corp., Microsoft Corp., Shopify Inc., TFI International Inc., Brookfield Energy Partners LP and Chegg Inc.
Looking ahead to 2021, our focus will now shift to companies that we believe will perform well in the post-pandemic world.
Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.