We’re now in the second half of 2020. I’ll save the “where did the first half go?” exclamation, as I’m sure you’ve heard it already. But milestones such as this are really good points in time for investors to take stock and look back. This is especially important given the rocky road the FTSE 100 has trodden over the past six months. By looking at the 10 best-performing stocks over this period, it allows us to see what the key trends were. It also helps us to make more informed opinions on what areas (and individual stocks) could be strong performers in the next six months.
The 10 best-performing FTSE 100 stocks
So here are the first half’s top performers.
- Ocado Group (up 59%)
- Scottish Mortgage Investment Trust (52%)
- Fresnillo (50%)
- Polymetal International (30%)
- Reckitt Benckiser Group (26%)
- Rentokil Initial (15%)
- Flutter Entertainment (15%)
- Spirax-Sarco Engineering (13%)
- Avast (11%)
- AstraZeneca (11%)
Key theme: Covid-19
So let’s work our way down the list. The first theme that jumps out to me is the performance of Ocado (LSE: OCDO). I’ve reported on this, as have other writers at The Motley Fool over the past few months. The pandemic has meant consumers still need to buy groceries, but don’t want to have unnecessary human contact. So what better way to buy food than via an online platform and get it delivered to the door? Ocado has been in the right place at the right time to capitalise on this surge in demand and changing environment.Â
Given that the world is unlikely to go back to full normality over the next six months, it’s logical to think that Ocado will continue to see strong demand for the service it provides. Thus the share price should remain a strong FTSE 100 performer.
I think the impact of the pandemic can also be seen via Reckitt Benckiser and AstraZeneca. Both share prices have moved higher. Reckitt Benckiser makes health and hygiene products. AstraZeneca is one of the companies hotly tipped to manufacture a Covid-19 vaccine. As a result, both firms could continue to be top-performing FTSE 100 stocks.
Key theme: gold price
Spots three and four are taken by precious metals miners. The rally in share prices here can be seen in part thanks to the move higher in the gold price. Both firms mine for gold. Of note: the gold price is up almost 30% in the past six months, trading at around $1,800 per oz. This higher price ultimately means both firms are able to generate higher revenue when the sell the gold mined. Polymetal even mentioned in a trading update that revenue was up thanks to the move higher in the gold price. For the next six months, it seems the share prices will continue to track the gold price.
There are other interesting stories from other performers that are worth researching yourself. For example, Flutter Entertainment (the owner of Paddy Power) saw a strong bounce-back in demand as sporting events resumed.
As a long-term investor, I want to find stocks that have the potential to rally over the next few years. Some firms, like the miners, could struggle to generate this due to the already high gold price. But there are definite standout performers for the long term here. Ocado is one stock I’m positive on, and would look to buy now for the long term.Â