MARKET REPORT: Analysts seeing double as recovery draws near

6 mins read


What do Purplebricks, Carnival, Halfords and Petra Diamonds all have in common?

Regular stock-watchers will know these are all companies whose shares have been sunk during the Covid crisis.

But they are also among a select group of ‘left-behind’ stocks Peel Hunt analysts have pinpointed as potential ‘doublers’ – beleaguered firms that could see their value double if vaccines begin to roll out next spring and restrictions begin to drop away next summer.

Analysts have pinpointed Purplebricks, Carnival, Halfords and Petra Diamonds as potential 'doublers' – firms that could see their value double if vaccines begin to roll out next spring

Analysts have pinpointed Purplebricks, Carnival, Halfords and Petra Diamonds as potential ‘doublers’ – firms that could see their value double if vaccines begin to roll out next spring

Peel Hunt’s methodology can broadly be summed up as looking at the most weather-beaten companies across the FTSE and AIM all-share indexes valued at between £50million and £5billion that would be most likely to benefit from the brave new vaccinated world.

Travel and leisure stocks have been some of the most consistently targeted during the big sell-offs.

Of these, Peel Hunt has earmarked cruise giant Carnival (down 0.2 per cent, or 2.5, to 1337p), package holiday stalwart On the Beach (down 2.7 per cent, or 11p, to 397p) budget airline Easyjet (up 0.8 per cent, or 7p, to 836.6p), pub group Marston’s (down 4.2 per cent, or 2.85p, to 65.9p) and Cineworld (up 0.4 per cent, or 0.2p, to 55.2p) to rebound.

Stock Watch – Remote Monitored Systems

A firm owned by Remote Monitored Systems (RMS) will begin producing anti-viral face masks in January.

Pharm2Farm’s masks are designed to kill coronavirus on impact.

RMS’s core focus is operating drones that check railway lines and big factories for damage, but it bought Pharm2Farm in August.

Despite providing investors with an up-to-date timetable for production, shares in AIM-listed RMS slumped 25.5 per cent, or 0.65p, to 1.9p.   

Foxtons (flat at 41p) and Purplebricks (down 2.8 per cent, or 2p, to 69p), they reckon, will be among the estate agents benefiting the most.

Purplebricks, they said, will be boosted by structural changes to the industry this year – such as house viewing increasingly moving online.

Diamond sales have a chance of recovering, making Petra (down 4.2 per cent, or 0.07p, to 1.66p) a candidate for booming growth, while Halfords (up 1.9 per cent, or 5p, to 271p) is also set to benefit from a much longer-term increase in the number of people who are now cycling to work.

There are many more companies on Peel Hunt’s list – but the inclusion of many FTSE 250-listed groups failed to rouse the mid-cap index yesterday.

The FTSE 250 closed down 0.9 per cent, or 173.05 points, to 19396.34, while the FTSE 100 fell 0.4 per cent, or 28.16 points, to 6362.93. 

While vaccine news has buoyed the market lately, jab developer Astrazeneca was in the red last night (down 0.7 per cent, or 52p, to 7748p) as the results from trials of the vaccine it is developing with Oxford University faced growing scrutiny.

Beyond equity markets, the big commodity in the spotlight this week has been bitcoin.

The digital cryptocurrency – which is essentially a type of money that is completely digital – rallied to an all-time high of $19,510 on Wednesday.

But it quickly fell prey to profit-takers eager to walk away with their gains intact and slumped by as much as 13 per cent to around $16,300 last night.

Back on the Footsie, Russian gold miner Polymetal was a hit with investors after it scooped up a 22.5 per cent stake in a Cypriot copper and gold miner, Chesterfield Resources, for £2.1million.

It is Polymetal’s first foray into copper mining – which is set to boom over the coming years as green pushes in the UK and elsewhere demand copper for new technologies such as electric car batteries and charging stations.

Polymetal rose 2.7 per cent, or 41.5p, to 1604.5p. AIM-tiddler Chesterfield jumped 30.2pc, or 3.25p, to 14p.

Guarantor lender Amigo Loans was also on the up – rising 1.5 per cent, or 0.14p, to 9.32p, despite warning about its very survival.

Investors in the troubled group may well have been pleased by comments from new chief executive – and turnaround specialist – Gary Jennison that the company is getting quicker at sifting through complaints claims.

It has been slammed for how it dealt with complaints in the past.

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