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While many stocks are taking a big hit because of the coronavirus, the following 5 are some that are set up to benefit from the outbreak. Let’s have a look at them.
The coronavirus outbreak is still driving a deep wedge into the world’s financial markets and stocks. As the situation continues to worsen, some of the world’s biggest companies are shedding significant weight in stocks as a result of the market disruptions from the coronavirus. In addition to that, the world’s richest people are also feeling more than a pinch, with heavy chunks of their personal wealth being wiped out.
Last week, both the Dow and the S&P 500 plunged terribly. But started gaining again and the gains of Dow are more than impressive. However, even with all of the bad news, the coronavirus might bring some respite and maybe a little more, to some specific stocks. As panic about coronavirus continues to spread, here are a few stocks that could benefit, for example, these 5.
Netflix Inc (NASDAQ: NFLX) is one of the stocks expected to see some advantage from the uncertainty and general fear spreading because of the coronavirus. NFLX is rightly positioned for a boost this quarter, especially if the outbreak worsens. As people are increasingly being isolated, whether or not it’s government-ordered, they will look for ways to entertain themselves indoors.
While there are many other entertainment platforms available, Netflix is quite easily the most popular and will have a field day. The platform will see many new customers as people who did not bother with a Netflix account will likely join. Also, the number of people who will be willing to watch a movie at the cinemas would drastically reduce and they might move to Netflix. This year alone, NFLX is up 17.8% already.
People expect the outbreak to worsen and bring with it some scarcity. To reduce the chance that they will be stuck, there are already a lot of bulk purchases in stores like Costco. Several reports show that the wholesale giant is running out of related supplies, across many of its stores in the U.S. Items like toilet paper, hand wash products, hand sanitizers, wipes and other essential materials are getting scarce.
In a recent note to clients, Oppenheimer analyst Rupesh Parikh predicted “material comp benefits” for the company. While this is great, Parikh worries that the current panic-buying could negatively affect availability in the future.
Last Friday, Costco Wholesale Corporation (NASDAQ: COST) stock closed over 4% less. By Monday, it rose over 6%.
The Minnesota Mining and Manufacturing Company (3M) is experiencing increased demands for its face masks. Even though experts insist that only symptomatic people and health workers should wear them, everyone is buying face masks. Reportedly, the demand is so high that 3M is struggling.
Also, 3M Inc (NYSE: MMM) became one of the stocks to watch out for when the government announced a contract. U.S. Vice President Mike Pence recently said that the government has contracted 3M to produce 35 million masks per month. To make things better for the company, the government has also promised to pay for any leftovers 3M is unable to sell after the virus has been contained. This almost removes the possibility of a loss and will fuel MMM.
Zoom Video Communications (ZM)
It makes sense that if people cannot move around like they used to, especially for work, they will have to switch to video conferencing. Already, in many parts of the world, employers are trying to make staff work from home. Among other forms of communication like text messages and emails, video conferencing will become widely used, and Zoom Video Communications Inc (NASDAQ: ZM) is quite properly set up for that. If things get worse, ZM is one of the stocks that should spike.
Gilead Sciences (GILD)
In the race to treating the new coronavirus COVID-19 strain, Gilead Sciences Inc (NASDAQ: GILD) announced its solution first. Remdesivir, an Ebola drug, has also worked well in treating COVID-19 symptoms. Furthermore, Gilead has embarked on clinical trials in China and the U.S. If things work out as expected, stocks will jump. On Monday, GILD added 8.7% and its consistent efforts will likely give the company more fuel.