Social media is a time when the corporate personality is often what determines how much we give a company or sector.
That puts the Elon Musks of this world at centre-stage, but it means it’s all too easy to overlook some businesses that might seem boring on a superficial view, but are well worthy of our time – and our money.
These were the hidden stars of this year’s UK market, not headline-hoggers.
Up: The equipment supplier Ashtead is experiencing a phenomenal ascent. It has risen by 78% since January
The FTSE 100 has not had a vintage year, but the blue chip index harbours some stellar companies – concealed in plain sight – whose performances have far outstripped the 15 per cent rise in the blue chip index overall.
What were their unsung heroes in the FTSE’s 2021 year, and what will happen in the next one?
Its activities may not sound super exciting, but shares in equipment supplier Ashtead have enjoyed a remarkable ascent, rising by 78 per cent since January, with gains that will astound those who have barely heard of the £27billion company.
Perhaps it’s hard for tech aficionados to imagine how the mundane work of hiring out generators, scaffolding and suchlike can be so profitable.
And there are others that have rewarded investors with share price increases of 40 per cent or more, which are also something of an enigma even to many who regularly follow the markets.
Are you honest? Do you know which products Dechra produces, and have you kept track of the company’s shares price movement? I thought so. But this £5.5billion company has certainly made the most of the opportunities thrown up by the pandemic.
Interactive Investor has compiled a list that includes the most prominent stars of the FTSE. Ashtead ranks at the top.
Its chief executive Brendan Horgan recently described the business, which operates in the US as Sunbelt Rentals, as ‘purpose-built’ to fix problems arising from the pandemic such as supply chain bottlenecks, labour shortages and wage inflation.
This problem will continue through 2022 with an influx of non-plant-orientated households and businesses that prefer to rent to buy. Ashtead may also have the ability to acquire smaller, independent competitors.
Croda was another obscure name that has prospered since 2021. Its shares rose by 56 percent. Because it supplies the vital ingredient in the Pfizer/BioNTech vaccination, the chemicals company is regarded as a hero of the pandemic.
Interactive Investor has compiled a list of superstars in the FTSE. Ashtead ranks at the top.
Croda’s consumer care division has also been boosted by purchases of more expensive lipsticks as people emerged from lockdowns determined to party.
The company just announced that it has sold most of its performance and industrial chemicals assets to the commodities group Cargill.
Despite the share price leap in 2021, brokers UBS still rate the shares a ‘buy’.
During lockdowns many people acquired a pet, a key cause of the 51 per cent bounce in the shares of Dechra Pharmaceuticals, the Cheshire-based veterinary medicine group which joined the Footsie this month.
As Keith Bowman of Interactive Investor points out: ‘Dechra believes its business is unique as most of its products are used to treat medical conditions for which there is no other effective solution or have a clinical, or dosing advantage over rival products.’ As our love of animals is unlikely to fade, Dechra could be a good bet for the future.
Ferguson is the plumbing and heating supplier Wolseley. It is now the US’s centre of operations. Ferguson’s shares rose 52 percent after it sold its Wolseley UK business.
Meggitt, for many, will not be the same as Ferguson. But the attractions of this aerospace and defence company were so apparent to the US private equity group Parker-Hannifin, a lesser-known pandemic predator, that it launched a £6.2billion bid in August.
Meggitt shares rose by 58%, however the Competition and Markets Authority still has to decide if the transaction is in the nation’s best interests. The UK’s stock market could lose one treasure. Let’s hope not.
The clamour for data lies behind the 35 per cent rise in the shares of RELX, the information and analytics group – which used to be Reed Elsevier when publishing was its focus.
Relex is an acronym for the company. It has pricing power that should allow it prosper, regardless of higher inflation. Credit Suisse believes this, and they are tipping the stock.
Experian is another beneficiary of this data hunger. This credit reference company was founded in 1803 by London tailors who began exchanging details with customers who had difficulty paying their debts.
The company’s shares are up 32 per cent this year, spurred by the growth of the Experian Boost service, which helps consumers improve their credit score by adding information on how promptly they make council tax or Netflix payments. Electrocomponents can be almost anonymous.
The clue’s in the name: It’s a distributor of electrical and industrial components. But let’s not be flippant, because this global £5.7billion business, which joined the Footsie this month, has been dubbed ‘Amazon for engineers’.
The 42 per cent increase in its share price reflects a drive to be genuinely ‘customer-centric’, a common aspiration that’s rarely met. Other household names, such as Royal Mail, are among Footsie’s stars for this year.
Yet the 60 per cent rise in its shares will raise as many eyebrows as the feats of the hidden treasures. Much to the relief of long-suffering small investors, the company’s failing fortunes have been radically reversed by the pandemic shift to online shopping, which Bowman believes is here to stay.
He says: ‘Both a £200million share buyback programme and a £200 special dividend appear to underline management confidence in the outlook,’ an assessment that few could have dreamed possible when Royal Mail shares, now 521.40p, slumped to 120p in April 2020.
It was impossible to have predicted that we’d be this preoccupied next Christmas by the pandemic or that it would cause lasting changes in our daily lives.
But let’s give a shout-out to the hidden treasure companies that managed to make the most of these difficult conditions, even if their light was under a bushel.