These five UK shares made triple-digit gains in 2020

2020 was a great year for UK shares in the alternative energy, online retail, gaming, and trading markets. Five, in particular, made eye-watering gains – but what will happen in 2021 and beyond?

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The markets were turbulent in 2020. Indexes and individual stocks slumped in March. Many have not recovered their losses to this day. However, some stocks performed strongly in 2020. In particular, five UK shares had an outstanding year, posting triple-digit gains and then some, in 2020.

The price of shares in ITM Power, a designer and manufacturer of products that generate hydrogen gas, rose by 607% in 2020. ITM Power no doubt benefited from the overall push for cleaner fuels, like hydrogen, in 2020. Governments worldwide have set new climate targets, and there is much talk of a “green recovery”, which means directing some of economic stimulus money towards renewable and alternative fuels.

Company Name Ticker Sector Market
Cap
2020
Start Price
2020
End Price
Gain in
2020
ITM Power ITM Alternative
Energy
£3.65bn 73p 516p 607%
AO World AO General
Retailers
£1.93bn 97p 411p 325%
Berkeley Energia BKY Mining £178.44m 12p 33p 183%
CMC Markets CMCX Financial
Services
£1.20bn 147p 391p 165%
Frontier Developments FDEV Leisure
Goods
£1.28bn 1228p 3080p 151%

Berkeley Energia is developing a uranium mine in Spain. The price of its shares moved 187% higher in 2020. The International Atomic Energy Agency thinks nuclear power generating capacity could double by 2050 if its best-case scenario plays out. However, Berkeley would need to get its mine approved to benefit from any increase in demand for uranium.

UK shares

Aside from promoting a greater urgency around decarbonising the world’s energy mix, the coronavirus pandemic forced people to spend more time at home. AO World is an online retailer of electrical appliances, and shareholders were treated to a 325% gain in 2020. A 53% increase in revenue for the six months to 30 September 2020, and a pre-tax profit of £18.3m compared to a loss in the same period the year before, lifted AO World’s share price.

People having more leisure time on their hands was also good for Frontier Developments, a maker and publisher of video games. Record revenues were expected as more people bought the company’s expanding line of titles in 2020. According to the latest trading update, revenue for the 2021 financial year (June 2020 to May 2021) is expected to be between £90m and $95m. That would be the best year on record. Frontier’s share price finished 2020 151% higher than it started.

Finally, there is CMC Markets, which offers an online trading platform. A combination of more free time and seeing market volatility as an opportunity to profit meant new customers flocked to CMC in 2020. In fact, client numbers increased by 42% year-on-year in the half-year that ended 30 September 2020. The influx of new and actively trading customers drove profit before tax 369% higher. As a result, CMC’s share price soared by 165% in 2020. 

Post-Covid-19 world

For these five UK shares, 2020 was a good year. Undoubtedly the way Covid-19 changed the world helped their share prices. Whether 2021 and beyond will be kind to shareholders in these companies depends, in part, on what a post-Covid-19 world will look like. How much of what changed in 2020 will persist into 2021 and beyond, after the pandemic has ended, remains to be seen.

The online retailing and video game markets look set to remain buoyant. I am not so sure about the boom in online trading. Markets do not always soar or have the volatility they did in 2020. I can see a lot of accounts closing. Alternative energy will likely continue to see support. However, which sources will be prioritised for success is still not clear.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK has recommended Frontier Developments. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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