The coronavirus outbreak is surely weighing on the broader markets but companies that offer essential products and services have been performing pretty decently amid stringent social-distancing measures. After all, one may live without luxuries in these trying times but certainly cannot do without necessaryitems, such as medicines, food products and other day-to-day necessary goods.
Demand for Drugs and FMCG Products Rises Amid Lockdown
Since January, the three major U.S. indexes have lost more than 15% of their worth. The Dow Jones industrial Average has declined 26.6%, the broader S&P 500 has lost 21.8% and the tech-laden Nasdaq Composite has shed 18% of value since Jan 1.The pandemic outbreak roughly began in January.
The pandemic coupled with the lockdown fuelled strong demand for essential products among Americans. After President Donald Trump extended the initial 15-day lockdown period to 45 days (until Apr 30), homebound consumers took to ordering food, groceries and even medicines online to avoid as much physical contact with others as possible.
In fact, some only step outside to get these essential products in copious quantities from their nearby supermarkets.This significant demand is boosting companies that offer these essential products.
To be specific, fast-moving consumer goods such as processed food items, ready-to-eat meal kits, bottled water, baked products and beverages, frozen fruits and vegetables, over-the-counter drugs, such as aspirin and pain relievers, toilet paper, toothpaste, soap and hand sanitizers etc witnessed a considerable surge in demand.
3 Stocks to Buy
We therefore narrowed down our recommendation to three stocks from the aforementioned industries, all of which have outperformed the broader S&P 500 index over the past year. Each company holds a Zacks Rank#1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Forty Seven, Inc. FTSV have gained more than 100% in the past year, clearly outperforming the broader S&P 500 index’s 14.3% decline. The Zacks Consensus Estimate for Forty Seven’s current-year earnings has moved 0.7% north in the past 60 days. The company’s expected earnings growth rate for the current year is 26.5%. Forty Seven, whichbelongs to the Zacks Medical - Drugs industry, carries a Zacks Rank #1.
Shares of Grocery Outlet Holding Corp. GO have gained 20.7% in the past year. The Zacks Consensus Estimate for Grocery Outlet’s current-year earnings has moved 9.9% north in the past 60 days. The company’s expected earnings growth rate for the current year is 12.7%. Grocery Outlet, whichbelongs to the Zacks Consumer Products - Staples industry, sports a Zacks Rank #1.
Shares of Trillium Therapeutics Inc. TRIL have gained more than 100% in the past year. The Zacks Consensus Estimate for Trillium Therapeutics’ current-year earnings has moved 42.9% north in the past 60 days. The company’s expected earnings growth rate for the next year is 9.4%. Trillium Therapeutics, whichbelongs to the Zacks Medical - Drugs industry, carries a Zacks Rank #2.
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Grocery Outlet Holding Corp. (GO): Free Stock Analysis Report
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Forty Seven, Inc. (FTSV): Free Stock Analysis Report
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