Winning large cap stocks this year, and lockdown could benefit Pearson’s digital strategy push

“A 1.5% drop in the FTSE 100 to 5,741 means the blue chip index has barely moved on the week, having ended last Friday at 5,786,” says Russ Mould, investment director at AJ Bell.

“While some investors may be disappointed by the lack of a meaningful recovery, stability in the markets could be viewed as a good sign.

“The VIX ‘fear’ index has been relatively stable since mid-April, albeit still at elevated levels compared to early 2020 and late 2019. A moment of calm is welcome as investors try to get their heads round the potential hit to corporate earnings and a better picture of when the world could recover from the pandemic.

“The FTSE 100 is down 23.8% so far this year. Across the index, 41 stocks have managed to outperform the market, eight of whom have actually delivered positive returns this year. These include precious metals miner Polymetal up 42.7% and grocery expert Ocado up 26.5%.

“Investing in gold, food, water, medicine and household goods seem to have been the winning trades through this crisis."

FTSE 100 Stocks in positive territory year to date

Polymetal +42.7%
Ocado +26.5%
Hikma Pharmaceuticals +19.1%
Fresnillo +15.8%
Scottish Mortgage Investment Trust +7.2%
Pennon +6.9%
AstraZeneca +6.8%
Reckitt Benckiser +4.1%

Pearson

“One consequence of lockdown is that the nation is being forced to embrace digital channels. That’s beneficial to education publisher Pearson, even if it does cause some disruption to earnings.

“Pearson has been on a journey to shift its business to a digital one and the lockdown is effectively creating a tailwind for the strategy. It is forcing some people to stop relying on physical text books and load up information on their screens.

“By offering a lot of its online resources for free during the crisis, Pearson is effectively getting customers used to consuming its products through the digital channel and hopefully creating a new habit that will be sticky once the world returns to normal.”

These articles are for information purposes only and are not a personal recommendation or advice.