[Editor’s note: “10 Stocks to Buy as They Ride a Coronavirus Tailwind” is regularly updated to include the most relevant information available.]
In the past few weeks, we’ve witnessed an uptick in positive developments. And just recently, the U.S. Department of Commerce dropped a huge economic “love” bomb. Retail sales jumped 17.7% in May from a month earlier, strongly suggesting that the American consumer was back. Naturally, this tempts investors to abandon stocks levered to the novel coronavirus and to jump on the risk-on train.
Yet I wouldn’t get too comfortable with this narrative shift. Although the retail sales increase exceeded analysts’ consensus expectation for an 8% lift, the reality is that these figures reflect percentage gains from extremely low comparisons. For instance, I doubt that you’d be thrilled if your $100 investment dropped to $10, only to see it rise to $20 for a 100% gain. So, in the broader sense, coronavirus stocks to buy remain relevant.
Moreover, Federal Reserve Board Chair Jerome Powell is still sounding the alarm bells regarding long-term economic damage. In a Senate hearing on Tuesday, Powell stated that higher unemployment and a spike of small business failures represent lingering challenges. Therefore, it’s not the time to pull the plug on coronavirus-related stocks to buy.
Also, investors should consider that the protests heighten the chances of a second wave of coronavirus infections. As well, many people are rushing to entertainment centers like Las Vegas casinos, raising fears among health officials. According to data from the Centers of Disease Control and Prevention, daily new infections are stabilizing at a high threshold.
Also, consider that the Great Depression forever changed American life and the generations affected by it. For better or for worse, certain behaviors, such as the hoarding of essentials may become permanently etched into our memory. Though many states are reopening from mandatory shutdowns, this painful period of sacrifice will not be forgotten.
Here are the ten coronavirus stocks to buy for our new normal.
Coronavirus Stocks to Buy: Teladoc Health (TDOC)
Back in the good ole days when my biggest concern was the outrage I felt that the Houston Astros – remember those guys? – could keep their ill-gotten World Series title, I liked Teladoc Health (NYSE:TDOC). However, I didn’t quite like the price tag on TDOC stock. Well, with the smelly stuff hitting the proverbial fan, Teladoc is one of the few coronavirus stocks that will enjoy perhaps universal bullish consensus.
You want to talk about social distancing? With Teladoc’s smartphone app, you can have all the social distancing you want. Obviously, this is a net positive for the patient. However, in the age of the disease known as Covid-19, the safety of medical professionals is also paramount.
According to the Wall Street Journal, during the peak of the crisis, our healthcare infrastructures suffered myriad problems, including recently financial pressures. Thus, it is absolutely vital that doctors and medical professionals be protected during this crisis. And Teladoc will help not only in this outbreak but also for other contagious diseases in the future. Under our new paradigm, TDOC stock is an easy buy among coronavirus stocks.
On a recent note, shares have started to pick back up after fading from their April highs. With increased Covid-19 hospitalizations spiking in some states, this suggests that we’re far from over regarding the pandemic. Logically, this would support the thesis for TDOC.
Coronavirus Stocks: Gilead Sciences (GILD)
Even before Moderna (NASDAQ:MRNA) announced its encouraging results for its early stage vaccination trial for Covid-19, Gilead Sciences (NASDAQ:GILD), was already looking shaky in the markets. Once the unquestioned big pharma frontrunner in coronavirus research and development, GILD stock went out of favor amid rising competition.
However, contrarians may want to give shares another look now that it’s on a discount relative to this year’s highs. First, Gilead’s drug remdesivir — which received support from White House health advisor Dr. Anthony Fauci — is a treatment for Covid-19. In other words, you don’t have to wait a year or so for a vaccine to arrive.
Second, remdesivir, which is essentially a retreaded drug, may be a morally superior choice to hydroxychloroquine. The latter is currently used by patients of long-term chronic diseases. Thus, a rush of demand for hydroxychloroquine may deny critical access for these patients.
Also, keep in mind that Gilead has completed late-stage clinical trials for remdesivir with some positive results. In contrast, competitors like Moderna and more recently Novavax (NASDAQ:NVAX) have only completed or are currently in early stage trials.
Coronavirus Stocks: Inovio Pharmaceuticals (INO)
A smaller-capitalized competitor to Gilead, Inovio Pharmaceuticals (NASDAQ:INO) has nevertheless made one of the biggest splashes among coronavirus stocks to buy. Long mired in mediocrity in terms of market performance, INO stock exploded higher when Inovio announced a possible vaccine. From just the genetic profile of the coronavirus, the company utilized their proprietary technology to produce this potential solution.
Of course, a major criticism against buying INO stock is that competition abounds in both the coronavirus vaccine and treatment space. However, it’s fair to point out that we’re still far removed from any one company delivering a vaccine for the masses. Thus, it’s still anyone’s game.
More importantly, Inovio’s capability of fast-tracking a vaccine without physically receiving a sample of the virus is impressive. Further, because the world is now focused on infectious disease mitigation, Inovio has received a booster shot of relevance.
Finally, it’s conspicuous that INO stock has moved consistently higher despite the media attention toward Moderna’s and recently Novavax’s vaccine. This suggests that Inovio has substance that you shouldn’t ignore.
Synonymous with cleaning products, most people know about Clorox (NYSE:CLX) perhaps by muscle memory or instinct. One thing is for sure though: prior to the pandemic, I’ve never fielded a question from someone interested in buying CLX stock. Well, this is one more item to include in our new normal. Among coronavirus stocks to buy, Clorox is easily the sexiest.
Once panic hit our communities, this brand flew off the shelves. It got to a point where if someone had a choice between a “Bennie” and a Clorox hand sanitizer, they would have probably picked the latter. That was one way to justify buying CLX stock.
But a more recent factor is that this outbreak may forever change our consumer psyche. Even after the coronavirus fades away, we will likely stock up for the next big virus, just in case. This gives CLX stock a longer upside pathway.
Best of all, shares have demonstrated resilience amid the changing headlines. Initially, state reopening measures helped cause a slight dip in CLX. However, as new coronavirus infections increase in many states, shares have found fresh momentum.
Not surprisingly, industrial giants that specialize in personal protective equipment, like 3M (NYSE:MMM) and Honeywell (NYSE:HON), have experienced renewed consideration and sentiment. I don’t think this demand will necessarily fade away due in part to the possibility of a second wave of coronavirus. But if you’re looking for another blue-chip giant among your stocks to buy with long-term potential, consider Verizon (NYSE:VZ).
Whether we have another outbreak this fall or winter season, one thing is certain: we’ll remain dependent on wireless services. Granted, the economic fallout is already ugly and will continue to pressure society. Nevertheless, it’s reasonable to assume that most American households will find some way to keep their wireless service. With the rise of digitalization, a lack of connectivity is truly detrimental. Thus, VZ stock has potential now and years down the line.
Also, don’t forget that no virus can permanently cripple our desire to innovate. As one of the few companies that can competently roll out 5G networks, Verizon was already on investors’ radars before this crisis. Therefore, VZ stock is a case of a solid name that’s temporarily caught in a rough circumstance.
Home Depot (HD)
Perhaps no other retailer has received as much interest during this crisis as Costco (NASDAQ:COST). When Covid-19 started making headway at home, people bum rushed their local Costco stores to stock up on the essentials. But I think Home Depot (NYSE:HD) will start to get some love. Though HD stock – like so many others –saw red in March, the underlying company is a vital cog in our communities.
If you think about it, Home Depot is like the U.S. Postal Service. Through hurricanes, earthquakes and other Acts of God, Home Depot is open to serve the core needs of the public. Once people go through their 800 gallons of mayonnaise, they’ll realize that home repairs and emergencies don’t wait for pandemics.
True, HD stock dipped substantially lower following its first-quarter earnings report. This might be an overreaction from Wall Street. While coronavirus-related costs dragged earnings, sales were higher than expected. That’s the most important component to focus on since almost every company will take a profitability hit this year.
If that wasn’t enough to pique your interest, consider that the National Oceanic and Atmospheric Administration predicts an above-normal hurricane season this year. Cynically, this makes Home Depot’s essential products golden commodities.
As cases of Covid-19 began spreading across the U.S., many companies urged their employees to work from home. Thus, the concept of telecommuting is no longer an alien luxury. In many states, it remains a mandatory order. In this environment, you have many obvious names to pick from. But investors may want to take a look at Dynatrace (NYSE:DT) and DT stock.
A new name, Dynatrace had its initial public offering in summer 2019 and it’s made a huge impact. What makes them stand out is not just that they offer enterprise-level, all-in-one cloud-based solutions but that they have resilient infrastructure that enables apps supported on their platform to perform on demand, all the time. As everyone works from home, this resilience is a critical factor.
Plus, this outbreak gives Dynatrace the opportunity to showcase its advantages over the competition. Don’t get me wrong, there’s risk involved with a new name like DT stock. Still, this is also one of the more compelling names among coronavirus stocks to buy.
As further confirmation, DT is witnessing recent upside momentum as rising Covid-19 hospitalizations suggest that remote work will become increasingly integrated into the corporate culture.
Zoom Video Communications (ZM)
Admittedly, most of the coronavirus stocks to buy that are featured on this list have seen wicked volatility. When Wall Street panics, few are left unscathed. I hate to use this hackneyed phrase but it is what it is. However, Zoom Video Communications (NASDAQ:ZM) has decisively bucked this trend. On a year-to-date basis, ZM stock has jumped 138%.
To be fair, skeptics may point out that Zoom will lose its luster after the coronavirus fades. But as I noted earlier, that fading may be further out than any of us would like. Potentially, this could result in another round of lockdowns. Also, some companies may downsize their physical profile as they adjust to the new normal in the workplace.
In other words, that’s a lot of people suddenly forced to telecommute. And that might be a transition that’s permanent. Plus, Zoom enjoyed and continues to gain benefits from a hostage audience. Honestly, this is a huge deal for ZM stock because Zoom is now part of the popular culture lexicon.
Generally speaking, soda companies like Coca-Cola (NYSE:KO) tend to be recession-resistant. Though I’m not recommending people drink sugary beverages all the time, admittedly, these products can provide a quick pick-me-up. That’s exactly what we need at this time.
However, since I’ve given much love to Coca-Cola already for stocks to buy, I think it’s fair to balance things out with a discussion on rival PepsiCo (NASDAQ:PEP). From what I understand, most consumers prefer the taste of Pepsi over Coke because of the former’s sweetness and smoothness. To me, cola is cola, but that’s a positive for PEP stock.
Again, sodas provide a cheap pick-me-up, which is an important coping mechanism during this period of extreme stress. Plus, a caffeinated cola is a much cheaper and more convenient option than going to a coffeehouse and plunking down $5 or more for a latte.
Finally, you should consider PEP stock for its exposure to the snacks business. With so many disruptions to our food supply chains, this exposure could help drive shares higher.
On the surface, retail names don’t draw favorable light as possible stocks to buy. Even when you dive into the details, the segment simply doesn’t inspire confidence. With demand precipitously down for non-essential products, it’s hard to have a positive outlook, even for Nike (NYSE:NKE).
Nevertheless, InvestorPlace’s Matt McCall has been bullish on NKE stock for a while. Moreover, the pandemic hasn’t diminished his enthusiasm. A major reason why he’s optimistic is Nike’s incredible brand loyalty. Through controversies that would take down a lesser organization, Nike has come out on top.
NKE stock is also a play on the future. Yes, many Americans are still hesitant to venture out despite many restrictions being lifted across the nation. I readily concede that this fear may stick uncomfortably longer than we anticipate.
But at some point, the consumer engine will likely return. When it does, NKE stock may represent a discounted opportunity today. Just be careful about this one since we’re navigating uncharted territory.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.