The COVID-19 coronavirus pandemic continues to see soaring death tolls and stay-at-home orders in the U.S. and countries across the globe.
Not only has the virus claimed thousands of lives, but it has also sent stock markets plunging to new record lows not seen since the 2008 financial crisis.
How long will the pandemic and the stock market carnage last?
It’s unclear and one of the biggest uncertainties we are facing right now. However, there are still several stocks that have become very interesting at these lower levels and are likely to see positive developments as more people work from home due to the deadly virus.
We have compiled a list of three coronavirus stocks that we think can stand the test of time against the coronavirus.
What is Coronavirus?
Coronaviruses are a family of hundreds of viruses that cause illnesses ranging from the common cold to more severe diseases like the Middle East respiratory syndrome (MERS) and severe acute respiratory syndrome (SARS), according to the World Health Organization (WHO).
The novel coronavirus is one of seven members of this family that are known to be able to infect humans, and the third in the last three decades to leap from animals to humans.
Since emerging in the central Chinese city of Wuhan in December 2019, this new coronavirus has sparked a global health emergency.
As of this writing, the highly contagious virus had infected close to 408,000 people, the vast majority of them in China, killed more than 18,000 and spread to more than 160 countries.
Europe is now the epicenter of the coronavirus, with the highest number of confirmed cases in Italy, and death tolls rising exponentially in Italy and Spain than they did in mainland China at the same phase of the outbreak.
Impact of the virus on global markets
The coronavirus pandemic is hurting global stock markets as fears about its economic damage intensify, and investors continue to question whether coordinated stimulus-response from governments and central banks will be effective.
Wall Street recently skidded into its first bear market in more than 11 years, after WHO officials labeled the coronavirus a global pandemic and criticized alarming levels of inaction by governments in containing the virus.
While a lot of stock traders are certainly very worried right now as analysts continue to predict more falls to come, there are still a few stocks that should be on your radar.
Amazon
Amazon.com Inc (NASDAQ: AMZN) may be better positioned to outperform the overall market, as many shoppers are now relying heavily on online delivery services more than ever.
Demand for Amazon deliveries has rocketed since the coronavirus began spreading and many Americans have turned to the online retailer due to product shortages at physical stores.
Amazon’s services like Amazon Fresh and Prime Now promise speed and convenience without shoppers having to leave their homes.
The e-commerce behemoth is benefiting from a surge in demand it has even been forced to prioritize shipping to its $119-a-year Prime members to try to triage shortage of goods and its flood of orders amid the pandemic.
Walmart
Walmart Inc (NYSE: WMT) shares have held relatively steady compared with the broader market as investors continue to reel from the pandemic. The stock has lost only 3.8% year-to-date, in comparison to the S&P 500’s loss of 31%.
Walmart could potentially outperform the market in the short and medium-term, going by the moves seen during the financial crisis. This is supported by the short-term consumer spending predicted as shoppers stock up, and horde food and other supplies that are in demand.
Walmart has seen a jump in business, similar to what it sees during the holiday shopping season as millions of Americans stock up everyday goods all while many indirect rivals such as apparel chains and department stores notably Kohl’s (NYSE: KSS) and Macy’s (NYSE: M) are missing in action as they close temporarily.
The surge in demand has prompted the retail giant to raise the hourly wage it pays warehouse workers by $2, to between $15 and $19 an hour.
Walmart, which is the biggest private employer in the U.S., also plans to hire an additional 150,000 temporary workers in its stores and warehouse over the next 10 weeks to meet the growing demand for essentials
However, analysts have warned that the effects of a drawn-out pandemic could be less positive as overall consumer spending falls because of uncertainty over the future and loss in wages.
Zoom Video Communications
Shares of Zoom Video Communications Inc (NASDAQ: ZM) are up more than 130% since the beginning of this year as companies, educational and government institutions globally move operations online to limit in-person contact during the coronavirus crisis.
Zoom offers teleconferencing services such as video meetings, webinars, and chat across mobile and desktop devices. Analysts believe that the video conference software company is poised to reap the spoils of the pandemic as it continues to see a surge in demand, with many new subscribers.
Zoom operates its own data centers in 17 places around the world that allow for control and flexibility when it comes to routing both its video and audio traffic. As such, the San Jose, Calif.-based company is confident it could handle the increasing number of users hopping onboard the platform.
Stifel analysts led by Tom Roderick recently wrote in a note to clients that global coronavirus crisis will “undoubtedly drive awareness and adoption” of Zoom’s video conferencing platform, and the analysts “expect this environment to further enable the company to post industry-leading growth rates.”
Bottom Line
Stock traders have been trying to digest the potential impact of the coronavirus pandemic on the world economy, which has led to slumping stock prices in financial markets.
However, the aforementioned coronavirus stocks could offer potentially profitable trading opportunities to the savvy traders even as pandemic-fueled fear spreads.
Disclosure: No data, content or information provided by Warrior Trading, the Site or the other products and services of Warrior Trading, is intended, and shall not constitute or be construed as, advice or any recommendation to buy, sell or hold a particular security or pursue any particular investment strategy. These stocks are not stock picks and are not recommendations to buy or sell a stock. This is for informational purposes only.