For most stock investors, 2020 turned out to be a banner year, after all. Equities did more than than just bounce back from their steep dive at the onset of the pandemic in March. Most actually thrived amid all the economic carnage: The Russell 3000 and Standard & Poor’s 500 indexes, for example, reached new heights by December’s end after gaining 18 percent and 16 percent, respectively, during the year.
But while some sectors soared, others crashed. So much of business, and of life, was conducted from home offices and spare bedrooms while people sheltered from COVID-19. Good for some companies. Quite bad for many others. Here’s a look at how those dynamics played out among many notable Massachusetts stocks.
Biomedicine: By now, you’ve heard about hometown hero Moderna. Its stock rose 434 percent last year, vaulting it into a new stratosphere of $40 billion-plus corporations. It was, by far, the best performer of the 25 most valuable public companies in the state.
Suddenly, Moderna had what everyone wanted: a technology that could vaccinate against COVID-19. And the company repaid the faith of Wall Street, by developing an effective one in less than a year. Biotech stocks in general can be volatile, and sure enough a number of other local drug company stocks soared in 2020, as well. One mid-size biotech even did better than Moderna: Seres Therapeutics in Cambridge (up 610 percent), whose stock rocketed upward in August after impressive clinical-trial results were reported for a microbiome treatment of colon infections.
Work-from-home stocks: With the vast majority of white-collar folks suddenly homebound, many tech companies that help enable remote work saw a lift. Even when those vaccines from Moderna and others get injected into our arms, conventional wisdom says there will still be more remote workers than ever, compared to pre-pandemic times. Topping the local list was the Cambridge marketing software firm HubSpot (up 150 percent), where revenue boomed as clients plowed more of their marketing dollars into digital strategies. Voice-recognition firm Nuance Communications in Burlington (up 147 percent) was close behind, thanks in part to demand for its Dragon Medical telehealth software and the migration of more clients to cloud-based subscriptions. Other WFH beneficiaries included TechTarget (up 126 percent), Brightcove (up 112 percent), Pegasystems (up 67 percent), and Rapid7 (up 61 percent).
Stay-at-home stocks: Many of us weren’t stuck at home just during work hours. We were stuck at home for the rest of the day, too. This new reality helped lift some consumer-oriented companies able to capitalize on this trend. Witness the stellar year for online home-furnishings retailer Wayfair (up 150 percent), a company that finally proved to investors it can turn a steady profit. Raise a glass for Jim Koch at Boston Beer (up 163 percent) as COVID-weary folks slurped up spiked Truly seltzers during the pandemic. Break out your club card for BJ’s (up 64 percent) to stock up for the quarantine. And plug in a Roomba from iRobot (up 59 percent) to help clean all those extra messes around the house.
Apparel stores: When slacks give way to sweatpants for work meetings, clothing stores take a hit. Shares in TJX Cos. still rose in 2020 (up 12 percent), and the parent of Marshalls and T.J. Maxx remains one of the state’s most valuable companies. TJX struggled with COVID-related store closures and declining same-store sales. But investors chose to focus on the positives: Nothing brings out the bargain hunters like a recession, and the nesting trend bolstered revenue at TJX’s HomeGoods stores. Unfortunately for J.Jill (down 34 percent) and Destination XL (down 79 percent), our other publicly traded clothing chains didn’t have a home-furnishings arm to offset the apparel-shopping slowdown. J.Jill narrowly avoided bankruptcy by reaching a deal with lenders in September, while Destination XL’s final destination was the over-the-counter market after financial issues left it out of compliance with Nasdaq listing requirements.
Banks: The banking sector confronted a fear of bad loans blowing up in a downturn and concerns about the precarious yield curve that made it tough to make enough money from the loans the banks did approve. Hingham Institution for Savings (up by a paltry 3 percent) was the rare bank stock to rise in 2020. Much of the industry looked like a bloodbath. Stalwarts such as the parents of Rockland Trust (down 12 percent), Century Bank (down 14 percent), East Boston Savings Bank (down 26 percent), and Brookline Bank (down 27 percent) all took big hits. These stock declines have consequences. The CEO at Berkshire Bank (down 48 percent) made an abrupt exit in August after the bank reported bigger than expected credit losses due to the pandemic, and Silicon Valley Bank inked a deal this month to buy out Boston Private (down 30 percent) at a substantial discount, thanks to the Boston company’s withered stock price.
Commercial real estate: With few people headed to the office or staying in hotels, it’s no wonder that real estate investment trusts got hammered. By far, the most well-known is Boston Properties (down 31 percent), owner of both the Pru and 200 Clarendon (a.k.a. the Hancock). The firm also owns office buildings in New York, Washington, and San Francisco — cities where it is seeing more vacancies than in Boston. (Its L.A. holdings represent a bright spot.) Boston Properties ended the third quarter with a 91-percent occupancy rate, a rate that’s likely to worsen in 2021 amid upcoming lease renewals.
There were worse performers among the REITs, though. Consider Diversified Healthcare Trust (down 49 percent), whose life-sciences holdings were not enough to offset its exposure to the coronavirus-prone senior housing sector. Then there was a related REIT, Service Properties Trust (down 53 percent). Hotel owners had a particularly rough year. But Service Properties also saw an upside: It helped its Sonesta affiliate by using the pandemic chaos to sever ties with InterContinental Hotels and raise Sonesta flags at about 100 lodging properties. Sometimes, the best opportunities can be found in the toughest times.