Remember life before lockdowns? Exactly a year ago today, on Monday, March 23, 2020, Boris Johnson said people must stay at home and various businesses would close. That was also the day when the FTSE 100 index crashed to its 2020 trough. On ‘Meltdown Monday’ (as I call it), the Footsie dived to an intraday low of 4,922.8 points. It then bounced to close at 4,993.9. Having ended 2019 at 7,587.1, the FTSE 100 had shed almost 2,600 points. That’s a collapse of more than a third (34.2%) in under three months.
The FTSE 100 bounces back
Famed banker Baron Rothschild once wisely remarked: “Buy when there’s blood in the streets, even if the blood is your own.” As it turned out, buying shares exactly a year ago today would have been an excellent decision. As I write, the FTSE 100 hovers around 6,706 points. That’s a gain of more than 1,700 points since Meltdown Monday’s closing low. If you’d bought the FTSE 100 at that day’s close, you would be up more than a third (34.3%) today.
Not all FTSE 100 shares have recovered
Of course, as a broad market index, the FTSE 100 tells us nothing about the performance of individual members. As you’d expect, some shares did spectacularly well, while others fell badly behind. Since Meltdown Monday, 93 of the 101 shares in the FTSE 100 index have gained in value. The average gain across all 93 risers is an impressive 60%. At the other end of the spectrum, eight stocks fell in value over one year. The average loss among these eight laggards is 6.2%, with losses ranging from 0.3% to 15%. Alas, unfortunately for me, my largest individual shareholding languishes at #100/101 in this list. Oops.
These were the best shares to buy a year ago
For the record, these five FTSE 100 shares have made the biggest gains since 23 March 2020:
Entain (Betting & gambling) +329.3%
Ashtead Group (Equipment rental) +195.5%
Antofagasta (Mining) +163.5%
Intermediate Capital Group (Asset management) +160.9%
Flutter Entertainment (Betting & gambling) +158.6%
As you can see, each of these five winners has absolutely thrashed the FTSE 100’s 34.3% gain since Meltdown Monday. Gains for these five champions range from almost 159% at Flutter to a whopping almost 330% at Entain. Interestingly, both of these index-beating stocks are active in the same market: betting and gambling. When the UK went into lockdown a year ago, high-street bookmakers were forced to close. As a result, sports betting and gambling migrated online, boosting returns for gaming companies.
Of the remaining three gainers, Ashtead is a leader in renting out industrial equipment, largely in the US, UK and Canada. Its share price almost halved during the Covid-19 crisis, but has roared back to hit an all-time high, nearing £43. Antofagasta (known as ‘Fags’ in the City) is a leading copper miner, with huge operations in Chile. With the price of copper almost doubling over the past year (up 86.8%), Fags is riding high. Lastly, alternative-asset manager ICG provides funds to growing companies. Its services are growing fast as firms scramble to shore up their balance sheets.
Would I buy any of these shares today? My honest answer is: I don’t know. As a veteran value investor, I prefer to hunt for unloved and overlooked shares with potential for future growth. Given that these five FTSE 100 stocks have all exploded over the past year, I suspect that none would make my watchlist today.
