Three stocks to buy now that will come back stronger after Covid-19
Professional investor Ed Wielechowski of Odyssean Capital, chooses three compelling stocks that should thrive in a post-pandemic world.
It is 12 months since equity markets hit their Covid-19 lows. Few at the time would have predicted the scale of the subsequent market rally, or the speed with which the market’s focus has shifted from concern over companies surviving the pandemic to optimism about those positioned to benefit as economies emerge from lockdown.
We believe that this shift in sentiment has led many more cyclical, industrial, and consumer stocks to trade at generous multiples of fully recovered profits as a rebound becomes priced in. However, there remain compelling but less obvious opportunities that should benefit from a “normalisation” post-lockdown. We have been looking for companies where, on top of a near-term recovery, we may see the virus benefit their end markets and where management can improve their businesses. Here are three examples.
The changing healthcare market
Spire Healthcare (LSE: SPI) is a leading private-hospital operator in the UK. Private hospitals have had their capacity reserved during the pandemic, at cost, to support the NHS. Now activities are returning to normal and the healthcare landscape has fundamentally changed. Backlogs of both private and NHS procedures will take years to clear, with private-sector support needed to achieve this. Spire is well placed to benefit.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The pandemic has also shifted patients’ willingness to engage with healthcare services digitally. Spire rolled out online tools in the crisis to enable digital pre-assessment. Customers enjoy improved convenience while Spire benefits from efficiency gains. We believe further such self-help opportunities exist. Spire shares have had a good run, but continue to trade below a freehold property-backed book value. At around nine times earnings before interest, taxes, depreciation and amortisation (Ebitda) they still offer great medium-term value.
Digitising data services
Wilmington (LSE: WIL) is a provider of data, training, and events to a variety of markets. Despite benefiting from significant recurring revenues, the portion of the business reliant on in-person events and training has inevitably been hit by Covid-19. Wilmington should now see these services bounce back, but more excitingly it has used the pandemic to accelerate its shift to enhanced digital delivery of its services.
Digitising its content allowed Wilmington to keep offering services to its customers through the pandemic, gaining share from competitors. This digital-ready content can now more easily be packaged into new products, served to new customers and accelerate growth. The shares are still 20% below their pre-pandemic level, despite the firm’s improved prospects.
A hidden recovery
Clinigen (LSE: CLIN) provides hard-to-access medicines to healthcare professionals and clinical trials globally. Demand for its services dipped as hospital treatment and clinical trials slowed in lockdown. This demand is set to recover. Clinigen can also benefit from an increased focus on drug distribution as vaccines roll out; new product launches; and cost synergies from recent acquisitions.
Despite the recovery potential, the shares trade on a forward price/earnings (p/e) ratio of ten. While gearing is high, the company has strong underlying cashflow. As leverage falls the shares are likely to trade nearer the long-term average p/e of 15.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Ed joined Odyssean in December 2017 as a fund manager. Prior to joining Odyssean, Ed was a principal in the technology team at HgCapital. He joined HgCapital in 2006 and worked on numerous completed deals, including multiple bolt-on transactions made by portfolio companies. He has additional quoted market experience having led all aspects of the successful IPO of Manx Telecom plc in 2014 as well as having evaluated and executed public to private transactions.
Ed started his career as an analyst in the UK mergers and acquisitions department of JPMorganCazenove in 2004.
-
State pension could rise to £12,600 next year - dragging millions into paying tax
The triple lock could trigger a 5.5% increase to the state pension in April 2026, economists suggest. This means the full state pension will breach the tax-free personal allowance
By Ruth Emery Published
-
Stocks and shares ISAs beat cash ISAs – is it time to start investing?
The average stocks and shares ISA returned almost 12% over the past 12 months, versus 3.8% for the average cash ISA. As Rachel Reeves considers cutting the cash ISA limit, is it time you started investing?
By Ruth Emery Published
-
Renewable energy investing: who is paying for the green revolution?
Investors in renewables have not been rewarded, says Bruce Packard. Will they fund the government’s plans?
By Bruce Packard Published
-
The best ways to invest in Vietnam – Asia’s communist dynamo
Vietnam has long been one of our favourite markets. The prognosis remains auspicious, says Alex Rankine.
By Alex Rankine Published
-
India is a new global powerhouse — should you invest?
India’s growth rate has slowed recently, but there is still ample scope for investors to benefit from its development.
By David Prosser Published
-
Why Chinese stocks are so far out of favour
There’s little appetite for Chinese stocks despite low valuations.
By Cris Sholto Heaton Published
-
Three companies that dominate their markets with critical products
A professional investor tells us where he’d put his money. This week: Charlie Huggins, manager of Wealth Club’s Quality Shares Portfolio, picks three stocks.
By Charlie Huggins Published
-
Should you continue to hold Smithson Investment Trust?
Opinion Smithson Investment Trust, a small- and mid-cap fund, has struggled to live up to lofty expectations, says Rupert Hargreaves.
By Rupert Hargreaves Published
-
Primark owner Associated British Foods is an overlooked gem going cheap — should you buy shares?
Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
By Jamie Ward Published
-
Trump's tariffs and a shrinking market for alcohol deal double blow to Diageo
Donald Trump's tariffs are a further headache for drinks giant Diageo, which is already being buffeted by a decline in alcohol consumption.
By Dr Matthew Partridge Published