Between 20 February and 23 March 2020 the S&P/ASX 200 Index (ASX: XJO) plummeted over 36%. Many ASX 200 shares have since rebounded considerably, however, and the index is now trading at around 5,590 points. Notwithstanding this partial recovery, current levels still represent a 22% discount to the February high.
Some of the biggest ASX 200 share price declines
Certain industries and individual ASX 200 shares have seen significantly greater declines than the index overall. Many of these declines were directly attributable to the economic fallout resulting from coronavirus. For example, with no certainty around international and domestic travel, it wasn’t surprising to see travel stocks like Sydney Airport Holdings Pty Ltd (ASX: SYD) down more significantly than the ASX 200 average.
Following are 2 further stocks that have garnered much attention for their colossal decline during the recent bear market. We’ll look at why they were down so much and where they are now. It’s interesting to observe the extent of these market swings which, in hindsight, often indicate that investors were overly pessimistic at the time. Having said that, only time will eventually tell whether those bears were, indeed, right or wrong.
Afterpay Ltd (ASX: APT)
There’s no denying Afterpay’s market darling status in recent years. For those growth investors savvy enough to jump on board, it has delivered highly impressive returns. During the bear market, Afterpay’s shares fell from $40.50 to $8.90, representing an immense 78% decline!
As a highly valued, consumer facing company undergoing an international expansion, investors were concerned retail spending would fall off a cliff and fees wouldn’t be recoverable due to COVID-19 restrictions across Afterpay’s markets.
To date, however, investors’ fears surrounding the company are yet to materialise. Afterpay is helping both retailers and consumers weather the coronavirus restrictions via online sales and its share price hit an all-time high of $49 today. Currently trading at $48.14 at the time of writing, this represents a massive 441% above the 23 March low!
Webjet Limited (ASX: WEB)
With virtually no travel occurring either domestically or internationally, Webjet has seen its business fly away. Shares fell from $10.44 on 23 January to as low as $2.25 on 22 April. A 78% decline!
Webjet went to the capital markets early, and at a significant 55% discount, in order to shore up its balance sheet. The company raised a combined $346 million from a retail and institutional capital raising at $1.70 per share.
Since then, with COVID-19 restrictions slowly lifting, investors have been gradually bidding up the Webjet share price. Shares are currently trading at $4.12 each, an impressive 83% above last month’s low.
When the market is facing angst and uncertainty, the likes of which we have experienced recently, many ASX 200 shares decline far more significantly than is warranted by their long-term fundamentals. This can provide amazing investment opportunities if you have the means and the stomach to be bullish while others are retreating in fear.
Motley Fool contributor Lloyd Prout has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.