Coronavirus Cases on the Rise Again: 5 Must-Buy Stocks

Governments across the world are gradually opening up economies and relaxing shelter-in-place measures but fears of coronavirus haven’t subsided. In fact, a USA Today analysis of Johns Hopkins data showed that 16 states have set records for new cases in a week. The fears of coronavirus flaring up further may not be unwarranted as there is still no sign of a vaccine to treat the deadly virus.

New cases of coronavirus are surging in almost all states across the United States. Although the government has indicated that another lockdown is quite unlikely as the economy needs to get back on its feet, it won’t come as a surprise if people once again start confining themselves to their homes. However, amid this uncertainty, a few businesses found an opportunity to cash in on during the pandemic, while most are still bleeding.

Coronavirus Cases Rising Again

Fresh COVID-19 cases are surging in almost all states. Of the 50 states, 41 are witnessing worse weeks than the previous one. And an analysis of COVID Tracking Project data shows that in 36 states, a higher rate of people is testing positive than in the week before.

While the data continue to show the reach of the virus is not letting up, the head of the World Health Organization said achieving herd immunity by allowing the virus to spread is "scientifically and ethically problematic."

Moreover, the quest for a vaccine ran into trouble once again on Monday after Johnson & Johnson JNJ halted its phase 3 clinical trial because of a participant's unexplained illness. Earlier, AstreZeneca too had halted its trial after one of the participants showed health complications.

Braving the Pandemic

There’s a sea change in the pre- and post-pandemic world. Work and learn from home have become the new culture, while social distancing has changed business completely. Moreover, social distancing measures have made people become more self-reliant and are keeping them indoors.

Although most sectors have taken a beating, a few have managed to cash in on the coronavirus crisis. Shelter-in-place stocks particularly have been taking advantage of the situation as more people are staying indoors and becoming more technology-dependent during the pandemic. The technology and consumer discretionary sectors have been the two major beneficiaries of this pandemic. The Technology Select Sector SPDR (XLK) has returned 44.9% in the past six months, while the Consumer Discretionary Select Sector SPDR’s (XLY) has returned 45.7% in the same time frame.

Dependence on technology during the lockdown period and stockpiling on fears of the virus spreading gave a big boost to these two sectors. With demand for essential goods surging during the lockdown, companies dealing in consumer staples and discretionary witnessed a massive push thus aiding their profits.

Our Choices

It won’t come as a surprise if people once again start stockpiling on fears of the virus spreading. Given this situation, it would be prudent to invest in shelter-in-place stocks.

Zoom Video Communications, Inc. ZM has been benefiting from the work-from-home and online learning wave. Zoom uses AI to schedule video meetings and for a host of other things such as organizing attendee details and transcripting details.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 96.8% over the past 60 days.  The company carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Spectrum Brands Holdings Inc. SPB offers a portfolio of leading brands in several product categories like residential locksets, plumbing, electric shaving and grooming products, personal care products, small household appliances, specialty pet supplies, and lawn, garden and home pest control products and repellents.

The company’s expected earnings growth rate for the current year is 25.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. Spectrum Brandshas a Zacks Rank #2 (Buy).

Lifetime Brands, Inc. LCUT is a leading designer, marketer and distributor of kitchenware, cutlery & cutting boards, bakeware & cookware, pantryware & spices, tabletop and bath accessories.

The company’s expected earnings growth rate for the current year is 53.3%. The company’s shares have gained 50.6% in the past three months. Lifetime Brands has a Zacks Rank #2.

KimberlyClark Corporation KMB is principally engaged in the manufacture and marketing of a wide range of consumer products around the world. The company sells its products to supermarkets; mass merchandisers; drugstores; warehouse clubs; variety and department stores; retail outlets; manufacturing, lodging, office building, food service, and health care establishments; and high volume public facilities.

The company’s expected earnings growth rate for the current year is 11.8%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past 60 days. KimberlyClark has a Zacks Rank #2.

Ollies Bargain Outlet Holdings, Inc. OLLI is a value retailer of brand name merchandise at drastically reduced prices. The company offers products principally under Ollie’s, Ollie’s Bargain Outlet, Good Stuff Cheap, Ollie’s Army, Real Brands Real Cheap!, Real Brands! Real Bargains!, Sarasota Breeze, Steelton Tools, American Way and Commonwealth Classics.

The company’s expected earnings growth rate for the current year is 54.6%. The Zacks Consensus Estimate for current-year earnings has improved 7.8% over the past 60 days.  Ollies Bargain Outlet has a Zacks Rank #2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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