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The continuing stock market rout and Covid-19 coronavirus outbreak aren’t making it easy to step in and buy these days. But if you’re in the mood, Bespoke Investment Group has compiled a portfolio of 21 stocks for the “COVID Economy.”
Plenty of other “virus stocks” have attracted investor interest, Bespoke’s analysts write. But the stocks on its list stand to benefit after the acute phase of the outbreak passes, Bespoke contends, due to the “potential long-term impact this experience will have on the behavior/psyche of the general public.”
Thematically, the 21 stocks fall into a few broad buckets.
In the personal and health-care space, Bespoke likes Clorox (CLX) for its bleach and wipes; Gilead Sciences (GILD) and Regeneron Pharmaceuticals (REGN) for their potential coronavirus treatments; and Johnson & Johnson (JNJ) and Procter & Gamble (PG) as “staples health” stocks.
Several of these stocks offer attractive dividends that are likely to be maintained. Clorox and Procter & Gamble each yield 2.5%, J&J yields 2.8%, Gilead pays 3.5%. (Regeneron, a biotech company, doesn’t pay a dividend).
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Assuming millions of people work from home or will be quarantined, Bespoke recommends stocks that should benefit from the “digital workforce” trend. Communications software company Slack Technologies (WORK) is one of them. Online medical care provider Teladoc Health (TDOC) also makes the cut. It isn’t a novel idea, however: the stock has surged more than 65% this year, implying massive growth in its business. Teleconferencing software maker Zoom Video Communications (ZM) would also benefit if more companies urge employees to stay home. Zoom is also a big winner already, up 60% this year.
If people stop hitting the gym and work out at home, the trend could benefit Peloton Interactive (TON). The company sells stationary bikes and treadmills with a subscription workout service. One caveat: Peloton went public in 2019 and its stock has tumbled 31% in the past three months due to concerns that its operating losses may continue to mount.
For online education (if schools stay closed), Bespoke recommends learning-platform company Chegg (CHGG).
Bespoke likes Twitter (TWTR) for online news and Facebook (FB) for staying in touch with friends remotely.
Stockpiling of more canned soups and packaged food would benefit Campbell Soup (CPB) and Hormel Foods (HRL), maker of SPAM and other processed meats, according to Bespoke. Campbell is doing relatively well this year, up 2.1%, with a 2.8% dividend yield. Hormel is down 6%, beating the broader market, and yields 2.2%.
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Pets need to eat and stay healthy too, trends that could benefit PetMed Express (PETS), which delivers nonprescription pet medications and supplies, and Chewy (CHWY), the pet supply delivery service.
Stay-at-home trends may also favor movie/TV streaming and videogame companies. Bespoke’s picks are Netflix (NFLX), Activision Blizzard (ATVI), Electronic Arts (EA), and Take-Two Interactive Software (TTWO). And of course no company gains more from online shopping trends than Amazon. com (AMZN), one of Bespoke’s picks.
One final caveat: None of these stocks are immune to macro trends, company risks, or a widespread economic disruption caused by the spreading coronavirus, which the World Health Organization classified as a pandemic on Wednesday. Think of these picks as ideas for when it’s safe to tiptoe back into the market again.
[Editor's Note] Something strange is happening in the financial system…
And according to the Wall Street Journal, it's causing some investors –- including the world's biggest banks – to move massive amounts of cash out of the banking system.
What exactly is going on and what does it mean for your money?
I recently met up with widely-followed hard asset expert Bill Shaw at his firm's east-coast headquarters.
Over the past two decades, Mr. Shaw's firm has grown from tiny startup into a publishing powerhouse – serving more than a million readers in more than 150 countries.
Since 1999, the firm owes its legendary status as a trusted source of financial research to its eerily-accurate track record of often-controversial financial predictions, including:
- The Dotcom Crash…
- The bankruptcy of General Motors…
- The real estate bubble…
- The fall of General Electric…
- And the bankruptcy of Freddie and Fannie.
Recently, Bill revealed a brand-new prediction that has caught many by surprise.
He explained, “I'm not the kind of guy who gives in to hype and big predictions… that's why I've waited nearly a decade — to make sure the timing is right for the biggest prediction of my career.“
He went on to explain that over the next few years, he sees massive bull market developing in a sector of the economy that, over the years, has been completely ignored by nearly every investor in America.
The hard-asset expert said:
“Events happening around the world are about to come together at just the right time to create a perfect storm, causing some of the world's biggest investors to dump cash and stocks – and pile into this long-hated asset.
In fact, it's already begun.”
After dedicating hours to painstaking examination, ensuring he considered every possible angle, Mr. Shaw has put together a free presentation to explain exactly what he sees coming… and the best way for Americans prepare.