Due to Covid-19, the UK stock market collapsed in early 2020. By 23 March 2020, the FTSE 100 index had fallen below 5,000 points. But as 2020 unfolded, investor optimism improved and share prices rallied. The past 12 months have been positive for UK stocks. The Footsie now stands at 7,121.88, up around 945 points in a year. That’s a return of 15.3% since 13 July 2020. Adding in dividends improves this to roughly 18.5%.
The FTSE 100’s comeback
Though the FTSE 100 has risen, not all of its members’ shares have made double-digit gains. Some Footsie stocks have lost value over one year. Of 101 stocks in the FTSE 100 (one is dual-listed), 89 have climbed over 12 months, ranging from 1.9% to 250.2%. Across these winners, the average gain is 37.7% — higher than the wider index. At the other end of the scale lie 11 losers — stocks that failed to ride the 2020/21 rally. Declines at these losers range from 1% to 24.3%. The average loss among these 11 is 9%.
The Footsie’ five biggest winners
Now to find out which FTSE 100 shares have emerged the biggest winners over the past 12 months. These are the Footsie’s top five gainers:
|Royal Mail||Postal services||+250.2%|
|Entain||Gambling and betting||+124.0%|
|Ashtead Group||Equipment hire||+114.3%|
As you can see, gains among these five FTSE 100 winners range from over 250% to almost 88%. These are exceptional returns, especially when set against the 15.3% gain in the wider index. Of the five, the big winner is a ‘boring’ 505-year-old household name, Royal Mail. With online shopping and deliveries soaring during Covid-19 lockdowns, Royal Mail’s profits and share price have both skyrocketed. But after such a hefty share surge, I see this stock as no better than a hold today if I owned it.
Next up is Entain, a leading provider of online (and offline) gambling and sports-betting through brands including bwin, Coral, Ladbrokes, PartyPoker, and Sportingbet. Although gambling is almost a recession-proof industry, this FTSE 100 stock has more than quintupled since its March 2020 low. That’s too rich for my blood, so I’ll pass.
Third of these FTSE 100 winners is Ashtead, an industrial equipment rental company. Ashtead’s shares have had a terrific multi-year run, gaining 114.3% over both one and two years, 139.4% over three years and 422.9% over five years. But after such a powerful run, I’d prefer to give this go-go growth stock a miss.
In fourth place is Evraz, a global steelmaker and miner operating in Russia, Ukraine and North America. Roman Abramovich, owner of Premier League team Chelsea FC, is its biggest shareholder. Like Ashtead, Evraz has been a terrific FTSE 100 stock to own over five years, gaining 344.5%. But as a bargain-hunting value investor, it’s not for me.
I’d buy ITV
As a veteran value investor, I’m always on the lookout for unloved and undervalued FTSE 100 stocks. I like £5bn broadcaster ITV (LSE:ITV), owner of the UK’s oldest and largest commercial terrestrial TV network. This FTSE 100 share is down 34% over the past five years, which is why I regard it as a potential takeover target. Also, ITV’s advertising revenues will have been boosted by its Euro 2020 coverage and the return of popular show Love Island. That said, ITV is at the mercy of future Covid-19 infections and lockdowns. I’ll wait for its next quarterly figures before hitting the ‘Buy’ button. If the figures are as bad as 2020’s, all bets are off!
Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended ITV. 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.