Ever since the U.S. economy began to re-open (and honestly before that), there was concern over the impending “second wave” of the novel coronavirus. And although the second wave of the virus was not expected to hit until the fall, the concerns have been escalating as case numbers rise in multiple states.
And despite the Trump administration’s vehement statements that the economy would not shut down, we learned on February 25 that Texas was now pausing, and in some cases rolling back, its reopening measures in an effort to stem the spread of the virus.
And this is happening as the Centers for Disease Control (CDC) is now saying that it’s possible that 20 million Americans may have the coronavirus based on a sample of blood tests that are showing who has the antibodies in their system.
For its part, the stock market reacted sharply to the move. It was a move that undoubtedly frustrated many weary investors. In fact, you might be among those that have had just about enough of the Covid-19 market. I understand, I’m there too.
But, institutional investors are forward-looking. And right now, they don’t like what they see. So stocks are having another broad selloff.
However, in the midst of any selloff, there is money to be made. And the good news for investors is that many of the same stocks that were good buys in March are still the stocks to buy right now. And while some of these stocks fit the classic definition of defensive stocks, you’ll find a few genuine growth stocks included on this list as well.
Quick Links
- Amazon
- Ollie’s Bargain Outlet Holdings
- Reynolds Consumer Products
- Dollar General
- Blue Apron
- Peloton
- Zoom
- Kimberly-Clark
- Teladoc Health
- DocuSign
#1 - Amazon (NASDAQ:AMZN)
The national lockdown caused by the pandemic is confirming the direction that the nation was heading into regarding our shopping habits. Consumers who had only shopped online out of convenience were now doing so out of necessity. And that has allowed Amazon (NASDAQ:AMZN) to continue to remind Americans of its dominance in e-commerce.
As an investor though, you have to like the fact that Amazon is a corporate enterprise that goes well beyond e-commerce. For many years, the company has been taking steps to become one of the leading players in cloud computing. And its Amazon Web Services (AWS) unit already accounts for a significant amount of the company’s revenues. So much so that Amazon is drawing the ire of regulators who would like to see the company broken up.
AMZN stock is up over 45% in 2020 despite tumbling over 20% at the onset of the pandemic. From that point, the stock is up nearly 65%. It’s just been an incredible run for a company that shows no signs of slowing down.
About Amazon.com
Amazon.com, Inc engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Echo, Ring, Blink, and eero; and develops and produces media content.
Read More - Current Price
- $224.92
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 42 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $243.00 (8.0% Upside)
#2 - Ollie’s Bargain Outlet Holdings (NASDAQ:OLLI)
With more than 40 million Americans having filed for unemployment claims, budgets are going to be tight for quite some time. That makes discount stores a popular attraction. Ollie’s Bargain Outlet Holdings (NASDAQ:OLLI) is a chain of discount stores that spans 25 states. The company features a business model that inspires a passionate fan base.
Ollie’s markets itself as an extreme value retailer that offers brand name merchandise at drastically reduced prices. It’s the store for “treasure hunters”. Its closest comparison in the retail sphere is TJX Companies (NYSE:TJX), the parent of T.J. Maxx. Ollie’s offers shoppers a no-frills in-store experience. But they make up for that with exceptional deals.
It’s no surprise that Ollie’s benefited from the desire of many Americans to stretch their stimulus checks as far as possible. In the company’s most recent quarter, it did post a downturn in comparable-store sales, but that number turned positive coinciding with the stimulus checks. Shares of OLLI stock are also growing. The stock has climbed over 58% in 2020.
About Ollie's Bargain Outlet
Ollie's Bargain Outlet Holdings, Inc operates as a retailer of brand name merchandise in the United States. The company offers housewares, bed and bath, food, floor coverings, health and beauty aids, books and stationery, toys, and electronics; and other products, including hardware, candy, clothing, sporting goods, pet and lawn, and garden products.
Read More - Current Price
- $117.91
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 10 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $117.85 (0.1% Downside)
#3 - Reynolds Consumer Products (NASDAQ:REYN)
Another company that looks well-positioned to take advantage of the trend affordably priced everyday household items is Reynolds Consumer Products (NASDAQ:REYN). Reynolds officially listed in January of this year. And while some newly listed companies may have wished they would have delayed, it seems the timing could not have been better for Reynolds.
One thing that sets Reynolds apart from other initial public offerings (IPO) candidates is that the company was already profitable. The company’s portfolio of brands includes Reynolds Wrap and Hefty bags. This also means the company already had shelf space in major grocery stores and warehouse clubs. It wasn’t trying to be a disrupter; it just was now allowing investors to buy shares of the company.
And it appears investors are doing just that. REYN stock is up over 20% in 2020. The company is in the early stages of building out an e-commerce presence. But with the company’s existing relationships with category leaders like Walmart (NYSE:WMT), that should not be an obstacle.
About Reynolds Consumer Products
Reynolds Consumer Products Inc produces and sells products in cooking, waste and storage, and tableware product categories in the United States and internationally. It operates through four segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products. The Reynolds Cooking & Baking segment produces aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags, and slow cooker liners under the Reynolds Wrap, Reynolds KITCHENS, and EZ Foil brands in the United States, as well as under the ALCAN brand in Canada and under the Diamond brand internationally.
Read More - Current Price
- $27.61
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $32.17 (16.5% Upside)
#4 - Dollar General (NYSE:DG)
If you haven’t been paying attention to Dollar General (NYSE:DG), you might want to take a closer look. Because Dollar General has been expanding and innovating, and investors have taken notice. Dollar General stores can now be found in 45 states. And despite its expansion, the discount store continues to increase same-store sales every year for the last 30 years.
The company is also taking on new initiatives to further broaden its appeal. First, the company has introduced DG Fresh, which allows the company to ship fresh and frozen produce directly to its stores. This is addressing an important issue that the lack of fresh ingredients perpetuates poor eating habits among a population that is most at risk.
Another initiative is its Fast Track, self-checkout. While not available in all stores, it does show that the company is looking for ways to give customers options they have at larger chain stores.
DG stock is up over 20% for the year and close to 40% since the market selloff in May.
About Dollar General
Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, midwestern, and eastern United States. It offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, disinfectants, and laundry products; packaged food comprising cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar, and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer, and wine.
Read More - Current Price
- $76.40
- Consensus Rating
- Hold
- Ratings Breakdown
- 9 Buy Ratings, 13 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $98.27 (28.6% Upside)
#5 - Blue Apron (NYSE:APRN)
It could be easy to look at a stock like Blue Apron (NYSE:APRN) and think that it’s time to walk away. The stock has had a fine run this year. And in fact, as the nation was locking down shares of Blue Apron surged over 600%.
The manufacturer of pre-packaged meal kits has had a couple of notable issues. In some cases, customers were finding its price too high to stimulate demand. In other cases, the company didn’t really have a moat and that has allowed the field to get crowded.
But the pandemic has created an opportunity. Prior to the lockdown measures, Blue Apron was strictly catering to its loyal, passionate existing base. Have they had a chance to grow their base? I’m optimistic. APRN stock is up over 60% since May 1, a time period that coincides with the nation reopening. This suggests to me that customers have found something they like.
The simple fact is that many Americans are not going to feel comfortable eating at restaurants until there is a vaccine or treatment for the virus. This gives Blue Apron a longer runway. Yes it has company in this space, but it bears watching.
About Blue Apron
Blue Apron Holdings, Inc operates a direct-to-consumer platform that delivers original recipes with fresh and seasonal ingredients. The company also operates Blue Apron Market, an e-commerce market that provides cooking tools, utensils, pantry items, and other products. In addition, it offers Blue Apron Wine, a direct-to-consumer wine delivery service that sells wines, which can be paired with its meals.
Read More - Current Price
- $12.99
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#6 - Peloton (NASDAQ:PTON)
Peloton (NASDAQ:PTON) is another company that continues to show strength despite gyms and fitness centers reopening. Like Blue Apron, Peloton was seen as a “fad stock” that would quickly recede once the nation reopened.
That hasn’t occurred. Shares of PTON have nearly doubled since the start of the year with the bulk of that coming in the last month.
But let’s be honest, it still could. Many well-intended resolutions are expensive clothes hangers. But habits are funny things. The business case for Peloton is actually not that much different from work-from-home stocks. There is a large contingent of fitness enthusiasts who enjoy the social, and accountability, aspects of a gym. They also see it as a more cost-effective option.
But if you’ve already committed to the cost of buying a Peloton bike, then at least one of those arguments carries less weight. Particularly since Peloton emphasizes that riders are part of a community. In that regard, Peloton has a first-mover advantage over its competitors. The question for now is can Peloton hold on to or extend that lead?
About Peloton Interactive
Peloton Interactive, Inc operates interactive fitness platform in North America and internationally. The company offers connected fitness products with touchscreen that streams live and on-demand classes under the Peloton Bike, Peloton Bike+, Peloton Tread, Peloton Tread+, Peloton Guide, and Peloton Row names.
Read More - Current Price
- $9.38
- Consensus Rating
- Hold
- Ratings Breakdown
- 3 Buy Ratings, 16 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $6.97 (25.7% Downside)
#7 - Zoom (NASDAQ:ZM)
Ever since the days of Star Trek, the idea that video chatting would be ubiquitous seemed like a foregone conclusion. But a funny thing has happened. We have a generation, and maybe more than one, that prefers text to video at least as it relates to human communication.
And even in the business world, the idea of video calls just didn’t seem to cut it. But when businesses and employees had no other choice, a company like Zoom (NASDAQ:ZM) had its moment. And it appears that it’s here to stay.
Kate Lister, president of the consulting firm Global Workplace Analytics, says it’s possible that 25 percent of employees will continue working from home multiple days a week after employees are given the all-clear to return to work. Companies like Twitter (NYSE:TWTR) have already said some employees can work from home indefinitely even after a vaccine.
This isn’t all about employee safety. Now that businesses have made the investment in work-from-anywhere technology, they are rethinking the necessity of their physical locations.
ZM stock has climbed over 280% for the year.
About Zoom Video Communications
Zoom Video Communications, Inc provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company offers Zoom Meetings that offers HD video, voice, chat, and content sharing through mobile devices, desktops, laptops, telephones, and conference room systems; Zoom Phone, an enterprise cloud phone system; and Zoom Chat enables users to share messages, images, audio files, and content in desktop, laptop, tablet, and mobile devices.
Read More - Current Price
- $85.60
- Consensus Rating
- Hold
- Ratings Breakdown
- 9 Buy Ratings, 14 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $87.10 (1.7% Upside)
#8 - Kimberly-Clark (NYSE:KMB)
At first glance, Kimberly-Clark (NYSE:KMB) may seem like an odd addition to this list. The company’s stock is barely registering a gain for the year. However, it is up over 25% since March. And that’s because the personal care products it produces have been in high demand.
The company does not appear to be getting a boost for its surgical and medical instruments as hospitals and clinics reopened for elective surgeries. That will be something to watch.
But with a stock like Kimberly-Clark, it’s important to remember your reason for owning the stock. In this case, it’s a dividend that has increased every year for the last 47 years. In an environment where many companies are cutting or suspending their dividends, Kimberly-Clark is continuing to provide that value for shareholders.
That may not be enough to get growth investors excited, but if more Americans choose to opt out of this soft recovery, KMB stock may be primed for some growth as well.
About Kimberly-Clark
Kimberly-Clark Corporation, together with its subsidiaries, manufactures and markets personal care and consumer tissue products in the United States. It operates through three segments: Personal Care, Consumer Tissue, and K-C Professional. The company's Personal Care segment offers disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, reusable underwear, and other related products under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Sweety, Kotex, U by Kotex, Intimus, Thinx, Poise, Depend, Plenitud, Softex, and other brand names.
Read More - Current Price
- $131.32
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 7 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $149.93 (14.2% Upside)
#9 - Teladoc Health (NYSE:TDOC)
By now,
By now, Teladoc Health (NYSE:TDOC) is no longer a secret. Not when the stock is up nearly 150% for the year. The basic premise is simple enough. Instead of mildly sick or non-critically injured patients going to a doctor’s office and carrying the risk of passing on their illness to others or being exposed to an illness, they can video chat with their doctor – or a different licensed physician – from the safety of their home.
In an interview with CNBC’s Jim Cramer, Jason Gorevic, Teladoc’s CEO described why virtual health care was becoming part of our society, “The demand has shifted forever on virtual care, and we’re on the verge of a new era for virtual care in the healthcare system.”
There are issues. First, only a fraction of states are currently expanding their telehealth services and Teladoc is not yet profitable. But neither of those issues should be affected all that much by the results of an election. That means the movement should continue to gain momentum from patients and physicians.
(NYSE:TDOC) is no longer a secret. Not when the stock is up nearly 150% for the year. The basic premise is simple enough. Instead of mildly sick or non-critically injured patients going to a doctor’s office and carrying the risk of passing on their illness to others or being exposed to an illness, they can video chat with their doctor – or a different licensed physician – from the safety of their home.
In an interview with CNBC’s Jim Cramer, Jason Gorevic, Teladoc’s CEO described why virtual health care was becoming part of our society, “The demand has shifted forever on virtual care, and we’re on the verge of a new era for virtual care in the healthcare system.”
There are issues. First, only a fraction of states are currently expanding their telehealth services and Teladoc is not yet profitable. But neither of those issues should be affected all that much by the results of an election. That means the movement should continue to gain momentum from patients and physicians.
About Teladoc Health
Teladoc Health, Inc provides virtual healthcare services worldwide. The company operates through Teladoc Health Integrated Care and BetterHelp segments. The Integrated Care segment offers virtual medical services, including general medical, expert medical, specialty medical, chronic condition management, and mental health, as well as enabling technologies and enterprise telehealth solutions for hospitals and health systems.
Read More - Current Price
- $9.44
- Consensus Rating
- Hold
- Ratings Breakdown
- 7 Buy Ratings, 14 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $12.24 (29.6% Upside)
#10 - DocuSign (NASDAQ:DOCU)
Like Zoom, DocuSign (NASDAQ:DOCU) is benefiting from the commitment of employers to have their employees work from anywhere. Yes, right now the idea of handling large quantities of paper documents seems a little unsafe. But the real catalyst for DocuSign is the reality that the only reason many transactions required a face-to-face meeting was to collect signatures.
Voila! Enter DocuSign. The technology was already seeded in the medical field as well as with realtors and mortgage companies. But now many other businesses will undoubtedly start using the technology as they realize it’s reliable and can be installed remotely so it fits the current, and future, environment.
DocuSign came into the coronavirus crisis in a position of strength. The company posted a strong revenue increase of 39% for its 2020 fiscal year that ended on January 31, 2020. DocuSign gets 95% of its revenue from subscriptions which is the kind of thing investors love.
The stock is up over 100% for the year and there is some concern that at some point the run will be over. But with many companies unlikely to go back to business as usual anytime soon, DocuSign should still have a nice long runway.
About DocuSign
DocuSign, Inc provides electronic signature solution in the United States and internationally. The company provides e-signature solution that enables sending and signing of agreements on various devices; Contract Lifecycle Management (CLM), which automates workflows across the entire agreement process; Document Generation streamlines the process of generating new, custom agreements; and Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce.
Read More - Current Price
- $94.41
- Consensus Rating
- Hold
- Ratings Breakdown
- 3 Buy Ratings, 7 Hold Ratings, 3 Sell Ratings.
- Consensus Price Target
- $92.45 (2.1% Downside)
I understand that for many of you, the novel coronavirus is a tired story. I get it. It is for me too. My goal in creating this special presentation is not to persuade you towards any particular belief. It’s to help you make money. Because every market provides an opportunity to do that.
The simple fact remains there is going to be volatility in the market for the next few months regardless of the progression of the virus. Tensions are building again with China, peaceful protests are being juxtaposed (and perhaps contradicted) by rioters. It’s shaping up to be a long, hot summer and fall.
But history proves when stocks are at their most volatile, they can also be at their most profitable. There were many investors who fled the market in March and wished they had not. So instead of fighting the market, make sure you’re profiting from it. And looking at these stocks is a good way to do just that.
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