A couple of Coronavirus gainers?

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A couple of Coronavirus gainers?
Master Investor Magazine

Master Investor Magazine 60

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Mark Watson-Mitchell spies two stocks that may be thriving in today’s topsy-turvy world of coronavirus-induced lockdown. 

Wincanton (LON:WIN) – hopefully doing well, with its shares about to break higher

On Wednesday of last week, Britain’s largest third-party logistics company issued a pre-close trading update for the year ending today.

Amongst countless others, its customers include Morrisons, Co-Op, Sainsburys, Weetabix, Muller, Asda, Lucozade Ribena Suntory, British Sugar, Heinz, Nestle, Waitrose, Coca-Cola, Neals Yard, Britvic, and Booths.

Revenue growth for the year is expected to be some 4% better, while net debt is expected to be down to between £10m and £15m.

But what has been very encouraging is the fact that its levels of activity in recent weeks have been high in many of its sectors, particularly in Grocery, Consumer and General Haulage.

It has recently experienced record levels of demand for its services from many of its leading customers and current indications are that good levels of demand will be maintained in those sectors during the period being impacted by Covid-19.

The full results will be, hopefully, announced on 20 May, when we will get a more up to date comment on the virus impact.

For the chartists amongst you – it is interesting to note just how close the shares are to breaking above their 100-day moving average line, indicating that a further rise could ensue if they score above 268p.

They are currently trading at around the 263p level, after having fallen away to a recent low of 155p just two weeks ago.

Profile 07.05.19 @ 247p set an end-2020 target price of 350p.

CMC Markets (LON:CMCX) – absolutely booming business

This UK-based group provides online and mobile trading services to its clients. Its basic core business is providing online and retail financial services, enabling trading in various financial products of underlying assets, such as indices, commodities, forex markets, treasuries and shares.

Although it operates in several domains, such as Europe, Australia, New Zealand, Canada and Singapore, its main markets are in its contracts for difference and its spread betting in the UK and in Ireland.

Real gamblers just love markets like we are currently enduring, while others prefer to protect their positions by using the company’s services.

The heightened trading activity experienced at the end of February has continued into March, which has been in excess of double that seen in normal markets in both its CFD and stockbroking businesses.

Boss Peter Cruddas declared two weeks ago that “Due to our long-term investment in technology, we can effectively run this business from home and from our disaster recovery sites in Hertfordshire and Sydney, and that is what we have been doing this week. Ninety-nine per cent of our London office are working from home or from our disaster recovery site in Hertfordshire. We are operating split shift systems in Sydney across our main office and our Chatswood disaster recovery site. As a result of this, there is effectively no limit to the amount of time we can operate this way.”

We can now expect the group to deliver net operating income ahead of current market consensus for the year ending today.

Net operating income of £220m could well see it easily make over £73m in pre-tax profits.

After 181.5p less than a month ago, its shares have been down to 135p since, but are now at 177p.

They could easily continue to outpace the market, with 200p/225p being possible price targets.

Profile 17.10.19 @ 120p set an end-2020 target price of 180p*.

(*denotes that the target price has already been achieved.)

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