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Questor: yes, the coronavirus has infected our portfolio – but it has also created bargains
Questor share tips: some of the falls inflicted on our stocks seem excessive and this gives rise to some buying opportunities
It's time to assess the damage that the coronavirus has inflicted on Questor’s stock selections.
On average our tips have lost 8.9pc since the new year. The FTSE 100 has fallen by 10.9pc over the same period. Of 235 stocks currently rated buy or hold, the vast majority – about 75pc – have lost money.
This should not surprise us: no portfolio of several hundred stocks can expect to be unaffected by broader market forces.
Let’s look at some of the biggest fallers, with a view to spotting any that have declined excessively and have now become potential bargains to snap up while the market remains depressed. We’ll also examine some of the small group of risers.
Equals, the foreign exchange firm once known as FairFX, has lost 53.7pc this year as holidaymakers stay at home. This seems disproportionate to the likely duration of the virus crisis and we say buy.
Shares in Carnival, the cruise line, have fallen by 36pc. Again, Questor expects the business to recover once the virus outbreak has run its course. Buy.
Dart Group’s shares have shed 30.5pc this year because the firm owns the Jet2 airline. Our argument about all these stocks, as we set out in an audio update to our WhatsApp group, is that this company and others will deliver flows of cash to their shareholders for many years to come and the immediate but temporary loss of business caused by the virus must be assessed in relation to those long-term returns. Once we look at the position in that light, a one-third loss of value looks extreme. Buy.
Shares in easyJet have also suffered a sharp descent, losing 24.9pc of their value. The arguments set out above apply here too and we say buy.
The 24.8pc fall in the WH Smith share price this year is no doubt explained by its heavy presence in airports. Although tourists are naturally put off travelling while the virus dominates every news bulletin, we suspect nothing will prevent them taking their foreign holidays again when the crisis abates. Buy.
Whitbread is, following the sale of its Costa coffee chain, a hotels company and its shares have lost 22.2pc since the new year. Questor wonders if investors have overlooked the fact that even holidaymakers who shun foreign travel still stay in hotels, while business travel will surely recover as the virus recedes. Buy.
InterContinental Hotels has lost 17.9pc and by the same token we rate it a buy.
Shares in Legal & General have fallen by 12.5pc this year, probably because of the effect of the falling stock market on the income of its large fund management arm. Questor expects the market as a whole to recover in time and sees the fall as excessive. Buy.
Moving away from specific stocks, we reiterate our point that selling shares now sows the seeds of a future dilemma about when to buy again. Our advice is to hold on tight.
This year’s risers
Far and away the biggest riser among our selections this year has been Hong Kong-listed AK Medical, whose shares have gained 84.7pc. However, it seems unlikely that the virus is the cause: AK makes joint implants. Hold.
Among other risers are several technology, biotech and telecoms stocks, such as Team17 (up 40.3pc), IMImobile (15.7pc), Bioventix (15.1pc), CrowdStrike (14.1pc), Zscaler (10.7pc) and Twilio (6.5pc), perhaps because their growth is seen as less dependent on the broader economy.
US figures as of 6.45pm GMT yesterday
Update: NMC Health
On Feb 23, Questor advised readers to sell NMC Health on the basis that recent developments over governance made it no place for private savers. We were only just in time: four days later the company suspended its shares and it is now battling to stave off a $2bn (£1.6bn) demand from its lenders. Its future must now be in doubt and readers should continue to avoid the shares if and when trading resumes.
Read the latest Questor column on telegraph.co.uk every Sunday, Tuesday, Wednesday, Thursday and Friday from 6am.