stocks

The 25 Best Stocks Since the COVID Bear Market Bottom

Top performers one year after the end of the COVID crash range from names that thrived during lockdowns to more speculative bets on a gradual return to pre-pandemic normal.

The fastest crash in U.S. market history bottomed out a year ago today. And as dizzying as the 2020 bear market descent was at the time, the ensuing bull market has been almost as unthinkable, with dozens of stocks more than tripling over the past 52 weeks.

Between its pre-crash closing peak on Feb. 19 and its closing bottom on March 23, the S&P 500 lost 34%. Never before had stocks fallen so far so fast – not even during the Great Financial Crisis or the Great Depression.

There was, of course, no way to know at the time. But on March 23, the bear market ended almost as quickly as it started.

The S&P 500 is up a little more than 76% since then. The Dow Jones Industrial Average has likewise tacked on roughly 76% and recently topped 33,000 for the first time. The tech-heavy Nasdaq Composite, meanwhile, is up a whopping 95%, even after stumbling in the early months of 2021.

And as for the small-cap benchmark Russell 2000? Forget about it. Stocks with smaller market values are supposed to outperform in the early days of an economic expansion, but the Russell 2000's gain of 124% over the past year is downright jaw dropping.

Major index performance since 3/23/2020

YCharts

The best-performing sectors of the past year are about what one would expect from a market that is – as we are so often reminded – forward looking.

For example, the energy and materials sectors lead the S&P 500 with gains of more than 100% year-over-year. Investors are betting on a surge in demand for oil, and commodities such as iron ore, respectively, as the global economy recovers. The pro-cyclical industrial and financial sectors aren't too far behind. Consumer discretionary, up about 87% since the March 2020 bottom, reflects expectations about earnings growth amid a general reopening of stores, restaurants, live sports and the like.

sector performance since 3/23/20

YCharts

When it comes to individual stocks, however, we see both forward- and backward-looking factors at play. The best stocks since the bear market bottom have been driven either by attributes that let them thrive during the pandemic, or by expectations for how profits will accelerate as we return to normal.

Take Wayfair (W), the top-performing stock in the Russell 1000 over the past year. It benefited from being both an e-commerce company and a home furnishings retailer. Few businesses have prospered as much from the consequences of the stuck-at-home era than e-commerce or home improvement.

At the other end of the list you'll find Six Flags (SIX), which is something of a speculative bet on the amusement park operator coming back from the brink. Other once-beaten-down recovery plays include mall-based or brick-and-mortar retailers such as Gap (GPS), Kohl's (KSS) and L Brands (LB).

Then there's MGM Resorts (MGM). The casino operator is a forward-looking reopening bet in the travel, hospitality and leisure industry. Peloton Interactive (PTON) and Moderna (MRNA), on the other hand, directly benefited from pandemic life while we were still in the thick of it.

best stocks from the 2020 bear market bottom

Kiplinger

Whether forward-looking recovery investments or more backward-looking beneficiaries of the pandemic economy, there is a high likelihood that the easy money has already been made with many of stocks on this list.

But it is instructive nonetheless.

The first lesson? Remember that market timing is a fool's errand. No one could know for certain that March 23, 2020 marked the COVID crash low.

Secondly, it's nigh impossible to pick winners from losers. That's why a diversified portfolio is the best way to go for the vast majority of investors.

Most Popular

25 Best Kirkland Products You Should Buy at Costco
Smart Buying

25 Best Kirkland Products You Should Buy at Costco

Many of warehouse club Costco's store-branded Kirkland Signature items get high marks for quality and value. Check out our picks.
July 21, 2021
Warning: You May Have to Pay Back Your Monthly Child Tax Credit Payments
Tax Breaks

Warning: You May Have to Pay Back Your Monthly Child Tax Credit Payments

Unlike stimulus checks, you might have to repay your monthly child tax credit payments if you get too much money from the IRS.
July 16, 2021
Will Monthly Child Tax Credit Payments Lower Your Tax Refund or Raise Your Tax Bill?
Tax Breaks

Will Monthly Child Tax Credit Payments Lower Your Tax Refund or Raise Your Tax Bill?

Everyone loves receiving large sums of money from Uncle Sam. But people who take advance child tax payments may take a hit on next year's tax refund.
July 31, 2021

Recommended

Stock Market Today (08/03/21): Stocks Shake Off Delta Doubts, S&P 500 Tags New High
Stock Market Today

Stock Market Today (08/03/21): Stocks Shake Off Delta Doubts, S&P 500 Tags New High

The S&P 500 set yet another new all-time high Tuesday as investors refused to hit the panic button over resurgent COVID caseloads.
August 3, 2021
Stock Market Today (08/02/21): Dow Stumbles After Sprinting Out of the Blocks
Stock Market Today

Stock Market Today (08/02/21): Dow Stumbles After Sprinting Out of the Blocks

Weak economic data sent the Dow and S&P 500 to small losses on Monday, though the Nasdaq managed a marginal gain.
August 2, 2021
Can Under Armour (UAA) Turn In Another Earnings Beat?
stocks

Can Under Armour (UAA) Turn In Another Earnings Beat?

Our preview of the upcoming week's earnings reports includes Under Armour (UAA) and Etsy (ETSY).
August 2, 2021
Stock Market Today (7/30/21): Stocks Retreat After Amazon Revenue Miss
Stock Market Today

Stock Market Today (7/30/21): Stocks Retreat After Amazon Revenue Miss

The major indexes all logged solid July gains, though, with the S&P 500 bringing its monthly win streak to six.
July 30, 2021