The Top 10 Performing Share in the Australian ASX in 2020
The Covid-19 pandemic is still developing, and more waves are expected as the year enters its second half. This means that the economic impact of the pandemic will continue to reverberate and affect the markets.
March 2020 saw the global markets crash and fears were high of a global financial crash, which was fortunately averted by the timely intervention of Central Banks globally. As the mist of confusion cleared a little, a realization dawned that although the economic effects of the pandemic are devastating some of the traditional industries and sectors, there are also some sectors that have done exceptionally well. these sectors include
- Pharmaceutical
- Biotechnology
- Fintech
- Communication
- Ecommerce
- Retail
These sectors are currently leading the market rebound after the March 2020 crash. While other sectors such as the manufacturing sector have found it difficult to regain the lost value, these few sectors, in particular, have outperformed the market, beating even their own previous share value records.
From an economic perspective, this is Schumpeter said, there are economic cycles, and after every cycle, chaos brings down the old industries and creates new ones. We are therefore currently going through this transformative phase, and as a result, new sectors are emerging.
Best performing Australian stocks
When it comes to choosing the best-performing stocks, there is no single strategy. Strategies vary with investors and their short/long term aims. If we have to look at a broad-based method of assessing stock performance, then we must at least look at three factors.
- Market sentiments
- Macroeconomic indicators
- Financial fundamentals of the company
The study of all three of these factors requires a deep understanding of market conditions as well as technical proficiency. This is why financial analysis and investment advice should always be taken from a qualified professional who can understand these factors.
Based on these factors we have compiled a list of 10 best performing Australian stocks in 2020 so far, so without further ado, let`s have a look at them.
Pushpay (PPH)
Pushpay provides donor management services for the nonprofit organizations, faith organizations and schools etc. the concept of donor management services was an innovative concept that was just unable to gain traction among the masses before the pandemic broke out, but it turns out that the Covid-19 proved to be a silver lining for Pushpay holdings limited. Â
The graph shown above tracks the performance of PushPay holding over the last year and it can be clearly seen that the stock value of PushPay was hovering around $4 before the pandemic induced crash in March 2020.
However, the post-crash rebound saw Pushpay stock soar to its new highest value as the stock cleared $8 per share value in June. This rise in value was because of increased demand for donor management services due to the pandemic. It seems like Pushpay have finally managed to work out their niche, and if they continue to implement effective strategies, they can effectively milk the bullish run in the wake of the pandemic.
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Macquarie Telecomm Limited (MAQ)
Macquarie Telecomm Limited is an Australian Telecomm company that provides local and long-distance calling services, ATM and ISDN services as well as telecom management services. The Telecomm sector is one of those sectors that have benefitted from the pandemic because the lockdowns and increased usage of communication devices have resulted in an increase in demand for telecom services.
The graph clearly shows just how well Macquarie stocks have performed in the wake of the pandemic. Prior to the financial crash in March, the stock price was hovering around $25 mark, interestingly Macquarie stock was not as badly hit by the March crash like some of the other companies, and if this wasn`t good news or the company, then the post-crash spike in demand must really have been great news because Macquarie stock almost doubled in value over a period of 3 months to reach $46 mark and it is still bullish.
Codan Limited(CDA)
Codan Limited develops electronic solutions for the mining, security, defence and government organizations. The company has got a global customer base and develops state of the art solutions such as metal detectors, mining and communications equipment etc.
Being in the tech sector, Codan limited has an advantage of not being hit as hard as other sectors furthermore tech sector is one of those sectors that have benefited from an increase in demand from the pandemic. So the whole situation has been rather beneficial for Codan limited.
The stock performance chart shows that Codan limited faced a steep drop when the markets crashed in March, but its stock price has since then regained and returned to pre COVID levels, this shows that the investor trust in Codan limited is still the same as it was before the pandemic, which is always a good sign of things to come for the company, especially in this uncertain economic environment.
ResMed(RMD)
ResMed is a US-based company that develops cloud-based equipment for the treatment of certain diseases. Being in the health and pharmaceutical sector has shielded ResMed from the worst of the March financial crash. The company is expected to continue along its trajectory and it is just perfectly positioned to continue its growth trajectory, utilizing the pandemic as a growth opportunity to develop new products to expand the product portfolio.
The stock performance shows an encouraging picture, a short blip in March shows the effect of the crash, that saw a quick recovery. Since then ResMed shares have reached their highest point in the last twelve months.
CSL limited(CSL)
CSL is a biotechnology company that researches and develops vaccines, blood plasma products and other similar products. Needless to say that CSL is at this moment in a sector that is the target for inflowing investment for the development of a vaccine for the Coronavirus.
The stock price performance of CSL may not look at encouraging as the other companies that we have discussed so far, but in the case of CSL it is not about the past performance and trajectory; instead, it is about the future potential of the company.
Biotech sector is the hottest sector in the world for investment right now, billions of dollars are flowing into this industry and will continue to do so even after a working vaccine is developed and this is why the future prospects of CSL limited are bright, given that the company implements effective strategy to ride the wave.
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Kogan.com ltd(KGN)
Kogan.com is an Australian company based in the retail and services sector. It is Australia`s premier online shopping destination. Over the years, Kogan has developed multiple brands that create value for the company. So Kogan is effectively in the eCommerce sector, and if there is any sector that has benefited the most from the pandemic, then it is the eCommerce sector which has seen better growth than even the pharmaceutical and bio health sectors.
Lockdowns and social distancing caused n increase in demand for the usage of services like Amazon, and since Kogan is in the same sector, it also saw an unprecedented rise in demand right from the onset of the pandemic.
It can be seen from the graph that Kogan.com was already on an upward trajectory before the Covid-19 induced financial crash occurred, and interestingly Kogan.com managed to survive the crash quite well, and in the rebound, Kogan.com saw its share prices rise to almost $17 per share from a low of $4 per share.
Now that Kogan.com is on a set upwards trajectory, it is expected to continue on this path, and therefore, it is one of the lucrative growth shares that investors are looking to buy.Â
Ansell ltd(ANN)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
Ansell is a manufacturer of medical and industrial gloves. This puts Ansell right in the heart of things as the demand for gloves has been the highest ever since the pandemic broke out, in fact, many countries faced shortages caused by high demand leading to black marketing of gloves. Needless to explain this any further because it is apparent that Ansell as a company, has benefitted from the pandemic and its stock performance has been one of the strongest in the bio health and safety sector. During the early days of the pandemic, Australia too faced an acute shortage of PPE`s, vents and gloves but resources were soon redirected to make sure that these critical supplies were available to deal with the pandemic.
The stock performance of Ansell limited shows a very encouraging picture for the company. Prior to March 2020, crash it was trading in the $30 – $35 range, it did get hit by the crash but recovered almost instantly, and since then it`s share price has risen to $38 per share and is expected to rise further because the pandemic is still developing and more waves are expected to hit in the coming months.
Afterpay(APT)
After pay is an Australian company that started up in the wake of the 2008 financial crisis, Afterpay offers an easy payment solution for online shopping, Afterpay users can purchase items on deferred payments over a 4 week period without the accumulation of any interest. So it is payment in instalment, but without any interest, the point is to make availability of finance easy without adding extra burden on the borrower.
Afterpay is situated in the financial services and digital payments sector, and this is yet another sector that has benefited from the pandemic because the demand for these services has gone sky-high.
The stock performance of Afterpay has been very encouraging. The company was managing quite well before the pandemic, but it was not able to cross the $40 psychological barrier, but the post-crash recovery saw AfterPay stock rise to almost $70 per share, the stock value has therefore grown almost twice to what it was previously.
Northern Star(NST)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
Northern Star is an Australia based gold producer that has got Tier – 1 projects. The company has got a portfolio of gold mines, and one may assume that since mining is not one of the highest performing sectors, the shares of Northern Star may not have performed so well, but the reality is different.
The stock performance for Northern Star has been better than expected but with quite a lot of volatility. The reason why Northern Star stocks have performed so well is indirectly the pandemic, but more directly the performance of Northern Star has been linked with the global fears of the dollar crash. Countries like Russia, China, UK and European nations are stocking up on their gold reserves to bulk up their reserves in order to withstand any global financial crash. The pandemic fueled this fear, and as a result, many investors rushed to invest their wealth in gold, to protect it from erosion caused by the financial crisis. This is why Northern Star shares have performed so well and with the looming threat of an economic crisis on the horizon, expect the shares of Northern Star to perform better and better with time.
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Zip Co (Z1P)
Zip Co is a Sydney based fintech company founded in 2013. Zip offers digital wallets that allow users to make deferred payments for products that they purchase online, without incurring any interest (similar to Afterpay quoted above). In addition to this Zip also offers budgeting software known as Pocketbook, which was acquired by Zip to include in its product portfolio.
Zip is in the digital payments and fintech sector, and this has therefore allowed the company to be shielded from the worst of the financial crisis so far.
The stock performance of Zip shows a positive trend for investors. Although it took a hit from the crash in March the recovery has been encouraging.
Conclusion
As you can see that most of these stocks re on the upward trajectory and most of them if not all can be categorized as growth stocks, which means that they are expected to grow at a steady rate because there is underlying demand in the markets for these goods and services provided by these companies. However, investors must remember that the markets are currently going through a transformative phase, and the global economy is heading into a crisis, so the picture shown by these stocks may very well be short term.
Disclaimer
Australia Unwrapped provides only general, and not personalised financial advice, and in no way has taken your personal circumstances into account. Investments go up and down, any questions talk to a financial advisor. This blog is opinion only and in no way should investment decisions be based on this information.
Australia Unwrapped does not endorse or vouch for the accuracy or
the authenticity of postings, comments or the article.
Main Image Source : Pixabay
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