The FTSE 100-listed discount airline has picked up an impressive 73.04 per cent since the start of 2013, more than 20 percentage points ahead of the next best performer in the index.
Ten best-performing stocks of 2013
| Name | 2013 (%) |
|---|---|
| Easyjet | 73.04 |
| Persimmon | 47.63 |
| International Consolidated Airlines | 42.8 |
| Meggitt PLC | 37.66 |
| Travis Perkins | 35.4 |
| ITV | 35.08 |
| BT Group | 33.79 |
| Lloyds | 31.8 |
| Schroders | 31.35 |
| Hargreaves Lansdown | 31.32 |
Source: FE Analytics
Thirteen funds in the IMA universe currently hold Easyjet in their top-10, including FE Alpha Manager Tom Dobell’s M&G Recovery fund.
Thomas Moore also holds the stock in his four crown-rated Standard Life UK Equity Income Unconstrained fund, as does FE Alpha Manager Philip Rodrigs in his Investec UK Alpha portfolio and Tim Steer in the four crown-rated Artemis UK Growth.
Airline and airline-related stocks generally benefited from a strong first half of the year, with British-Spanish multinational airline holding company International Consolidated Airlines Group and aerospace equipment firm Meggitt both ranking in the top-10.
The Share Centre’s Graham Spooner says Easyjet’s rapid rise has come as a surprise to him.
"Easyjet have become the go-to people [for flights] and they’re doing really well. It’s one we’ve certainly missed," he said.
Spooner says that when the company entered the FTSE 100, he felt it would probably run out of steam, but as people appear not to have changed their holiday habits – even in a recession – the business has continued to perform strongly.
"It’s taken us by surprise," he added. "The figures coming out have been excellent. People still want to go on holiday even with the downturn. The last time we booked a holiday, the first thing we did was go to Easyjet. There’s not a lot of competition, particularly if you want to go to Europe."
However, Spooner warns that there are many headwinds that can hit airlines – such as increased regulation, strikes and natural disasters – which can suddenly alter the share price, keeping him cautious on the industry as a whole.
"We’re always a little cautious about things like airlines because there are always things that can cause a setback in the future," he said.
He adds that because it is currently the height of the holiday season, it is unlikely that Easyjet will be able to maintain its fast pace, because the majority of its bookings for this year will have already been taken.
Another standout sector this year has been housebuilders, with Persimmon and Travis Perkins picking up strong gains. The property market has been one of the key pluses for the UK economy this year and is being tipped by many experts to prop up GDP growth in the medium-term.
After a strong rally in the latter part of 2012, several financial stocks continued their upward swing, with major UK bank Lloyds, asset manager Schroders and financial services firm Hargreaves Lansdown rounding out the top-10.
Many industry commentators anticipated a difficult period for Hargreaves post-RDR, but so far the business has held up very well – something that FE Alpha Manager Harry Nimmo forecast back in January.
Sanjeev Shah has stuck to what was previously a contrarian bet on the financial sector and holds Lloyds in the top-10 of his Fidelity Special Situations fund.
After being one of the worst-performing funds in the IMA UK All Companies sector in 2011, it has been one of the best in 2012 and so far in 2013, turning its disappointing three-year numbers into marginal outperformance and putting the fund in the top-quartile over one, five and 10 years.
However, the manager also has a major stake in Royal Bank of Scotland, which has been one of the worst performers this year.
Ten worst-performing stocks of 2013
| Name | 2013 (%) |
|---|---|
| Fresnillo | -51.01 |
| Antofagasta | -36.24 |
| Anglo American | -31.84 |
| Eurasian Natural Resources Corporation | -28.17 |
| Petrofac Limited | -26.19 |
| Rio Tinto | -22.22 |
| BHP Billiton | -19.97 |
| Tullow Oil | -19.57 |
| RBS Group | -15.72 |
| Vedanta Resources PLC | -11.84 |
Source: FE Analytics
Unsurprisingly, mining stocks dominate the bottom of the FTSE 100 as commodity prices continue to take hit after hit.
Mexican-based precious metals miner Fresnillo has felt the worst of the pain in the out-of-favour sector. The stock has lost an eye-watering 51.01 per cent since the start of the year.
The stock experienced meteoric gains in 2009 and 2010, picking up nearly 250 per cent in 2009 alone.
"Silver has really got beaten up and this is predominantly a silver mine," Spooner said. "The silver price has been very weak."
"It’s a Mexican stock and one that tends to be very specialist. Unless you think you know about the silver market, it’s one you should steer clear of."
Only the BlackRock Gold & General fund holds the battered stock in its top-10 – accounting for 6 per cent of the overall portfolio.
Other major mining and oil and gas firms such as Tullow Oil and BHP Billiton have suffered badly this year – hitting managers such as Aberdeen, which backs Australian-based mining firm BHP Billiton in a range of funds, including Aberdeen Asia Pacific & Japan and Aberdeen UK Equity Income.
BHP Billiton is also held in emerging markets leader First State’s Global Resources portfolio and sits in the top-10 of 96 funds in the IMA universe.
Spooner says there are not many signs that show the mining sector is on its way to recovery, but points out the market can move quickly in the commodities space.
"They didn’t have the best of years last year and have gone from average performance to below average, but with commodities that can quickly change."
