Five stocks to buy in the continuing coronavirus chaos help to answer a critical question for investors wondering what to do since a stock market crash occurred after the World Health Organization (WHO) declared a global health emergency for the sixth time in history on Jan. 30.
Many stores have had their shelves emptied of paper goods, cleaning products, frozen foods and other staples necessary for people to stay home for a prolonged time to protect themselves against the deadly virus’ spread. A surge in teleworking has created an urgency for teleconferencing measures and home computers.
Certain publicly traded companies have shown an uptick in their stock prices, despite the overall stock market taking a beating, with the S&P 500 falling more than 30% since Feb. 19 in the wake of 459,652 cases and 20,820 deaths from the coronavirus worldwide as of March 25. Below are five stocks for investors to consider amid the growing caseload of coronavirus, also known as COVID-19.
Walmart (NYSE:WMT), one of the largest retailers in the world, has seen an increase in shoppers to earn the top spot on this list of five stocks to buy in the continuing coronavirus chaos. John Furner, president and CEO of Walmart, stated that the company is incentivizing its employees through increased and accelerated bonuses that will total nearly $550 million for hourly associates. Plus, Walmart plans to bring on board 150,000 new associates through a rapid 24-hour hiring process. The new hiring plan will employ those who have lost their jobs and ideally boost customer service.
As for customers, Walmart and Neighborhood Markets stores extended their hours on March 15, as needed, to better serve shoppers. While the S&P 500 has plunged, Walmart’s stock is up despite the chaos.
This is not the first time the consumer staples giant has seen a gain during historically low points in the market. During the global financial crisis of 2008, Walmart shares rose 1%, compared to a 38% drop in the S&P 500.
During the 2001 recession, shares of the company rose 10%, compared with an 8% fall in the S&P 500. Walmart is not only a defensive stock, but one with low volatility as well. This means that, should the S&P 500 experience a drop, Walmart’s fall likely will not be as large. Currently, Walmart’s stock has a beta of 0.69, meaning that an S&P fall of 1% should result in a Walmart fall of 0.69%, on average.
Investment guru and “Millionaire Maker” radio show host Hilary Kramer, who leads the Value Authority and GameChangers advisory services, has seen success with a put option trade to profit from Walmart’s pullback after its recent rise amid frantic shopping caused by the coronavirus crisis. Kramer made money by noticing the stock rose excessively and turned a 31% profit in a single day for her High Octane Trader advisory service when the share price fell 4% after its run-up. She recommended WMT $135 puts on March 18 for $12.80, then advised to sell the options on March 19 for $16.86 to snag a 31.72% profit.
Amazon (NASDAQ:AMZN) also is among the five stocks to buy in the continuing coronavirus crisis chaos and has withstood the market headwinds. Many investors understandably expect that online-based companies will continue to gain strength as brick-and-mortar stores are shutting down and few people are willing to leave the safety of their homes.
The online retailer ships products of all types and is seeing an upward climb in the market. Shares of the company traded up nearly 0.26% between March 19 and the market’s close on March 25. Amazon is off its 52-week high by about 10%, which is roughly half the nosedive the S&P 500 has seen.
Zoom Video Communications (NASDAQ:ZM), a video communication platform, has benefitted in recent weeks as more and more people work remotely to avoid possibly contracting COVID-19. At the market’s close on March 25, shares of the company were trading at about $135.18. In less than a year, the company’s stock has seen a return of more than 200%, compared to a 17% decline for the S&P 500. The company made its debut in early 2019 as a video-first communication platform and web-conferencing service for companies. It also provides capability for virtual business meetings, webinars, instant messaging and video calls.
This type of all-access platform is in high demand with the current pandemic. While the market remains tumultuous and certain stocks are taking massive hits, Zoom shares are still trading a dollar shy of their all-time closing high.
The Fast Money Alert advisory service, led by economist and market strategist Mark Skousen, PhD, and stock picker Jim Wood, recommended the purchase of Zoom shares and call options on March 17. They subsequently advised selling half the stock on March 23 at $161.28 for a 42.14% gain, while the other half stopped out on March 24 at $140 for a 23.39% gain. As for their recommendation of ZM May 15 $125 Calls, they advised selling half on March 23 at $45.40 for a 297.54% gain. The other half stopped out on March 24 at $26.60 for a 132.92% gain.
Clorox (NYSE:CLX) is finding strong demand during the continuing coronavirus chaos as people are increasing their purchases of its germ-killing cleaning products. As of late, it has been a minor miracle to find a bottle of hand sanitizer or a canister of disinfectant wipes. Meanwhile, while broad market indexes such as the Dow Jones Industrial Average and the S&P 500 are diving, Clorox’s stock has shot up more than 20%.
While the company is certainly seeing an increased demand for its products, its outlook for the future is bright as well. Though the virus pandemonium will come to an end, the impact it had on the public will likely linger. This could benefit Clorox as consumer behavior may become geared toward health and hygiene. In the past month, Clorox’s current quarterly estimates have risen from $1.39 a share to $1.45 a share. Current year estimates have risen from $6.19 a share to $6.27 a share. Not only is the company positioned in an industry segment which is currently sitting in the top third of the Soap and Cleaning Materials industry, its share price is up in a tumultuous market.
Moderna (MRNA) is a biotech company that is seeking a cure for the coronavirus. On Feb. 24, Moderna announced that it had released its first batch of mRNA-1273, its test vaccine against coronavirus to be used on humans. Samples were shipped to the National Institute of Allergy and Infectious Diseases (NAID) to be used in phase one U.S. coronavirus treatment. In light of this progress, the company’s share price has risen in recent weeks. By the end of trading on March 19, the company’s shares were trading at $25.82. surpassing their all-time high. Though investing in this company may be a gamble, investors in Moderna could have a winning trade if its coronavirus vaccine gains regulatory approval and becomes the coveted treatment that people around the world are hoping and praying can be found.
Even though COVID-19 has taken its toll on human life and stocks, too, the tumult seems to be calming with the implementation of new monetary and fiscal policies that are aimed at boosting liquidity in the financial markets and helping struggling businesses and workers that have been idled by stay-at-home orders from governors around the country. On March 13, President Trump declared a national emergency and since then, an increased number of businesses have been shutting down, including bars, gyms and other places where people may gather. Stores and retailers that have not shut down have adjusted their hours of business to meet the needs of consumers and employees alike.
When businesses close their doors and travel decreases each day, companies lose revenue, which leads investors to sell their shares. However, President Trump is ready to sign a $2 billion federal coronavirus relief package into law as soon as it gains approval in Congress and the bill reaches his desk.
Faith in equities should not cease, given the prior strength of the market and the economy. For those looking to profit from equities during the coronavirus relief effort, it may be wise to look at the stocks in sectors providing at-home technology, sanitation and paper good products, food supplies and online shopping to rise above the continuing coronavirus chaos.
Emily Mirabelli is an editorial assistant at Eagle Financial Publications. She graduated from the University of Florida with a B.S. in Journalism in 2019.