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The COVID stocks expecting the good times to roll on
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- So-called COVID stocks – companies that have fought the virus; are up 68 per cent in 12 months
- Stocks such as Whispir (ASX:WSP) and Harris Technology (ASX:HT8) quickly became multi-baggers
- Companies watching catalysts such as the Christmas shopping and decisions on permanence of remote working
ASX stocks that have directly benefited from COVID-19 think the run won’t come to an end soon – at least not this year.
Stockhead’s watch-list of stocks that are directly involved with the virus fight currently shows an average return of 21 per cent in 6 months and 68 per cent in a year.
This includes bacteria-killing substance makers (or sellers), telehealth companies, biotechs fighting the virus and ecommerce plays enabling the so-called “new norm”.
| Code | Company | Price | %SixMth | %Yr | MktCap |
|---|---|---|---|---|---|
| ZNO | Zoono Group Ltd | 1.51 | -15 | 941 | $240.5M |
| HT8 | Harris Technology Gl | 0.145 | 215 | 753 | $34.4M |
| WSP | Whispir Limited | 3.8 | 138 | 128 | $435.8M |
| AEI | Aeris Environmental | 0.555 | 0 | 106 | $133.4M |
| MSB | Mesoblast Limited | 3.25 | 60 | 85 | $2.0B |
| GSS | Genetic Signatures | 1.85 | 3 | 65 | $275.3M |
| UCM | Uscom Limited | 0.18 | -23 | 50 | $27.1M |
| GTG | Genetic Technologies | 0.008 | 33 | 33 | $70.2M |
| LSH | Lifespot Health Ltd | 0.065 | 48 | 33 | $7.8M |
| BIT | Biotron Limited | 0.091 | -3 | 20 | $64.7M |
| HCT | Holista CollTech Ltd | 0.089 | -54 | 16 | $31.7M |
| IHL | Incannex Healthcare | 0.09 | 55 | 8 | $85.2M |
| PAA | Pharmaust Limited | 0.135 | 42 | 8 | $52.7M |
| ESE | Esense-Lab Ltd | 0.018 | 125 | 0 | $9.2M |
| BKL | Blackmores Limited | 64.58 | -21 | -25 | $1.3B |
| DEM | De.Mem Ltd | 0.245 | 44 | -26 | $42.3M |
| MX1 | Micro-X Limited | 0.235 | 50 | -27 | $83.9M |
| FOD | The Food Revolution | 0.047 | -34 | -37 | $32.6M |
| ADR | Adherium Ltd | 0.024 | -23 | -52 | $17.3M |
| 1ST | 1St Group Ltd | 0.032 | -27 | -54 | $14.0M |
| NET | Netlinkz Limited | 0.082 | 71 | -54 | $168.4M |
| JAT | Jatcorp Limited | 0.0225 | -58 | -60 | $21.8M |
| WNB | Wellness and Beauty | 0.007 | -46 | -65 | $9.4M |
| MPH | Mediland Pharm | 0.1 | -33 | -67 | $31.3M |
| ONE | Oneview Healthcare | 0.052 | -17 | -80 | $9.1M |
The secret sauce – get things done more effectively
One of the big “COVID stock” winners is communication automation software maker Whispir (ASX:WSP). The stock is up 128 per cent in 12 month and 420 per cent since mid-March.
Whispir’s big run started with winning a Victorian government contract in March. Yesterday it released its latest quarterly report and revealed it has continued to grow.
Whispir (ASX:WSP) share price chart
Speaking with Stockhead, CEO Jeromy Wells noted clients are continuing to join and expects more to come.
“There’s opportunities to deliver technology to improve decision making, transparency and build a stronger sense of community and engagement,” Wells said.
“We’re really well placed to support organisations by giving them off-the-shelf capability to leverage insights so they can be more efficient.”
Wells noted some prospective clients may have thought at the onset of COVID-19, the so-called “COVID-norm” would just be for a few weeks and things would be all back to business as usual quickly.
But Wells noted it has now caused many to re-think the ways they do business and make them more efficient – beyond just having a remote workforce.
“If you’re a medium business and got managers on the phone for 45-90 minutes a day doing something that can be easily automated and get a better outcome for the employee of whoever they’re communicating to, it’s a massive productivity enhancement but the return is substantial and the quality of engagement is better,” he said.
“The work from home theme creates complex issues for organisations and we’re well placed to support them. And then it’s like, how you get businesses back on the highway?
“You’ve got to re-activate employees, set new expectations of customers, new ways of interacting with them. And there’s a whole overhead of new activity yet to start and we’re well placed to support them.”
Christmas set to be a cracker for ecommerce
The ecommerce sector has been another group of “COVID stocks” that have been particularly big winners.
The biggest winner is Harris Technology (ASX:HT8) which began 2020 under 1 cent and is now 14 cents. The catalyst for takeoff was April’s launch of its own hygiene product range.
Other winners include digital play Kogan (ASX:KGN) which has more than tripled this year and Temple & Webster (ASX:TPW) which is up over 500 per cent this year.
HT8, KGN and TPW share price chart
While no stocks have yet released their September quarterly cash flow reports, a Deloitte report yesterday said the upcoming Christmas shopping season would be big.
Deloitte labelled it “the largest eCommerce event in Australian history” and projected $4 billion in spending – 25 per cent up on last year.
John O’Mahony, a partner at Deloitte, said COVID-19 would be a permanent windfall for ecommerce companies.
“COVID-19 has changed the way Australians shop with an estimated 45 per cent of purchases set to be completed online in the future,” he said.
Estimates prior to COVID-19 put online sales little as 10 per cent of retail sales – even as late as February this year.
