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Are these stocks under-the-radar pandemic bargains?

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Google Sheets is Google’s free spreadsheet program, and part of its Google Workspace office collaboration suite. Think of it like Microsoft Excel, which is part of Microsoft’s Office suite.
As you’d expect, the two are fairly similar. But for years, Google Sheets has had some powerful in-built financial functions – a capability that Microsoft is belatedly building into Microsoft Excel.

And some years back, I created a handy Google Sheets spreadsheet to calculate the percentage share price movement between two dates, for all the shares in the FTSE 100.
It’s not a complicated spreadsheet. Just four columns, in essence: ticker, company name, price on the first date, price on the second date, and the percentage change between the two.

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Under the radar

Periodically, I run it to see if I can spot any likely bargains.
It’s a good way of quickly scanning the market to see what’s been happening to shares that I don’t routinely keep an eye on, or which don’t get much media coverage.
I keep meaning to extend it to the FTSE 250 as well, but so far haven’t got around to it. And in any case, 350 shares is an awful lot of shares to scan.
Last night, out of interest, I ran the spreadsheet again. The two dates in question: 2020’s market high, on 17 January 2020; and the market’s October nadir, on 30 October 2020.
In other words, the low point that interested me wasn’t the market’s sickening crash in March, when the FTSE 100 fell to 4,993, but its post-summer drift down to 5,577 – a point from which it’s now 1,200 points higher, as I write these words.

The usual suspects

What did I find?
First, as you’d expect, some companies had been hammered by the pandemic, for very obvious reasons.

British Airway’s owner, International Consolidated Airlines Group, for instance: down 64%. Cruise line operator Carnival, down 77%. Shopping centre owner Hammerson, down 87%. NewRiver Retail, another shop owner, which for good measure owns pubs and leisure outlets as well – it was down 67%. Pub owner Marston’s, down 60%.
And so on, and so on. Few surprises there. They were cheap back in October, and for the most part such companies are still cheap now.
Their share prices are up a bit, to be sure, but the ‘vaccine bounce’ hasn’t really happened. Marston’s is now serving fewer pints than in October, and I can’t imagine that British Airways or Carnival is seeing much of an increase in demand, either.
Move along: not much to see here, in other words.

Bargains ahoy?

What is much more interesting are a second group of bombed-out businesses. Decent, quality companies laid low by what one might term ‘secondary effects’ of the pandemic.

Companies that might have been quite expensive pre-pandemic, when viewed in terms of their price-earnings ratios, but which were anything but expensive by October.
And which, crucially, might still be in bargain territory now, despite the broader market’s rise.
Aerospace component manufacturer Meggitt, for instance – still well down, despite its defence and power businesses. The share price of medical manufacturer Smith & Nephew is likewise still depressed: with hospitals concentrating on Covid-19, there are fewer joint replacement operations being carried out. The share price recovery at power generation rental firm Aggreko is more pronounced, but still in bargain territory.

Brighter days beckon

And so on, and so on. Rolls-Royce, oil giants BP and Royal Dutch Shell, and pretty much the entire fund management and banking sector: arguably decent businesses temporarily laid low.
Caution is required, of course. All these businesses will recover at different rates, as pandemic restrictions ease, and the economy improves. And some are subject to parallel sectoral shifts: a greener world will consume less oil and gas, for instance, although timescales are uncertain.

But for now, they’re all well worth a look. With vaccines approved and being administered, sentiment is shifting. The Footsie has risen 1,200 points in two and a half months, so the market clearly believes that we’ve turned a corner.  A bargain today might not be still a bargain tomorrow.
Finally, by all means, do open Google Sheets and play around – the Help menu has a wealth of useful information.

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The Motley Fool UK has recommended shares in Marston's and Meggitt. Malcolm owns shares in NewRiver Retail, Marston’s, Rolls-Royce, BP, and Royal Dutch Shell. 

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