Pandemic Stocks: Here are 4 that benefited permanently and 4 that crashed

Nick Sundich Nick Sundich, March 22, 2024

The name pandemic stocks is one you might not have heard for a while, with the pandemic well behind us. However, many of us remember that there were several stocks that had a short-term benefit, only to see it dry up almost as fast as the heavens opened in the first place.

But others saw a more longer-term benefit, lasting to this very day. Let’s recap 4 stocks that are still benefiting from the pandemic as well as 4 that saw their bubble burst.

 

4 Pandemic Stocks that are still benefiting from the pandemic

 

Shaver Shop (ASX:SSG)

What were people to do when hairdressers were shut down? DIY. And Shaver Shop was the only pure-play stock that was there to help. Demand has continued to rise even post-pandemic. In FY19, the company made $167.4m in sales and a $7.4m profit. By FY23, sales had reached $224.5m and its profit reached $16.8m.

 

Myer (ASX:MYR)

Myer bottomed out after the Corona Crash and has mostly trended upward ever since. It has become a leaner business, closing down certain unprofitable stores such as at Blacktown, Knox, Frankston and even Queen St in Brisbane. It is also becoming more online focused, with online sales now over 20% of its total sales. Its sales in 1HY24 were $1.8bn, 14% higher than pre-COVID.

 

JB Hi-Fi (ASX:JBH) 

Unlike Myer, JB Hi-Fi was hardly in a bad shape prior to the pandemic. The problem with many retailers that catered to people working from home were that purchases were one-offs and long-lasting, such as furniture. Electronics need constant replacing and many of JB Hi-Fi’s pandemic customers have kept coming back. Even though JB Hi-Fi has seen a hit to margins, investors have continued to buy the stock.

 

WiseTech (ASX:WTC)

OK, we’re done with retailers, but still with a company that has something to do with eCommerce. WiseTech’s main product is CargoWise One, a Cloud-based end-to-end logistics execution platform that freight forwarders and other logistics companies can use to manage their businesses. The product is sold in a subscription model and is customisable to meet customer needs. It also has the Xtrade messaging solution, that lets suppliers and customers share information as well as transport management solutions for truckload shippers.

The pandemic led to major supply chain issues, many of which persist to this day. This made the need for WiseTech all the more compelling. The company boasts 17,000 customers hailing from 150 countries. These include all of the Top 5 Global Freight Forwarders and 45 of the Top 50 Global Third-Party Logistics Providers (3PLs). It is on track to surpass $1bn in revenue for the first time in FY24.

 

4 Pandemic Stocks that fell of the face of the earth

 

Marley Spoon (ASX:MMM)

With people working from home, food delivery businesses like Marley Spoon saw demand take off overnight. Marley Spoon’s revenue in 2020 doubled to 254m euros and increased over 20% in the two years thereafter. The trouble is that it was not profitable, and only stayed alive as long as it has due to capital raises, given intense competition in the industry and intensely low margins. Sales fell 18% in 2023 and its net loss continued to get worse.

 

Zoono (ASX:ZNO)

After toilet paper, hand sanitisers were arguably the most hoarded good in the early months of 2020. Zoono was in the right place at the right time, with a sanitiser that allegedly could kill the virus. It did not just rise because investors believed it would see a commercial windfall, but it made major deals, including deals with United Airlines and Johns Lyng Group. Revenue was NZ$38.3m in FY20 but never reached those highs again, sitting at NZ$3.3m in FY23. To add insult to injury, the company is being taken to court by the Commerce Commission of New Zealand over its claims about the effectiveness of its products.

 

Ansell (ASX:ANN)

Ansell also gained due to the PPE boom, although it was no penny stock as Zoono was prior to the pandemic. It was an established business with $1.5bn in sales in the year prior to the pandemic. The company’s sales retreated back to $1.6bn in FY23 and margins were hit by negative forex condition and the company’s exit from Russia.

 

Douugh (ASX:DOU)

Douugh is a fintech stock that saw its shares spike 10-fold within less than a fortnight after listing in October 2020. Now it is just half a cent.

The fintech launched with intent of offering US consumers retail banking services, with innovative features such as budgeting tools. It purported to use AI to analyse customers and offer financial coaching, mentoring and guidance accordingly. While starting in the US, it intended to enter Australia eventually and leverage Volt’s banking license through financial experiences partner Railsr. Volt’s collapse put that dream to shreds, and it made very little money from the US. It is an illiquid $5m penny stock with little to no prospects of escaping the doldrums.

 

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