More On: blue apron
Blue Apron earns $1.1M profit — but warns that it won’t last
Experts recommend these stocks to buy during Chinese virus outbreak
Investors don’t have to drown in the sea of red that is the coronavirus-battered stock market. The pandemic-fueled stock plunge has created some golden opportunities for people eager to invest — if they know where to look, according to experts. “It’s a good time to pick stocks because we’ve found that in this backdrop or …
Investors don’t have to drown in the sea of red that is the coronavirus-battered stock market.
The pandemic-fueled stock plunge has created some golden opportunities for people eager to invest — if they know where to look, according to experts.
“It’s a good time to pick stocks because we’ve found that in this backdrop or similar environments, this has been a very indiscriminate selloff, so now there’s a lot of opportunity for investors,” said Jill Carey Hall, senior US equity strategist at Bank of America.
It’s a good time, for example, to get a discount on blue-chip companies like Microsoft, whose Teams workplace collaboration platform is getting plenty of use as more people work from home, according to Anthony Denier, CEO of the trading platform Webull.
Denier pointed to Disney as another big name to buy during the downturn. The coronavirus has battered the entertainment giant by forcing it to close theme parks, but it’s still a strong business with a good management record, Denier said.
“If you wanna look at a long-term investment that has gotten beaten down, I think Disney’s a great place to start,” he said.
Discount stores where shoppers have stocked up during the coronavirus panic could prove resilient during a downturn as consumers shift their spending to cheaper goods, Bank of America’s Hall added.
She did not name specific companies. But Costco’s share price declined only 5.8 percent from Feb. 20 through Thursday, compared to a 27.8 percent drop in the S&P 500, while Dollar General’s fell 13.7 percent.
“If we are in an environment where we’re expecting an economic recession you tend to see the lower-end consumption stocks like low-end stores, as there is that trading-down element during an economic downturn,” Hall said.
Some buzzy companies have seen huge boosts to their stock prices as Americans hole up in their homes to stem the spread of the virus.
Shares in teleconferencing provider Zoom have jumped more than 17 percent since Feb. 20 as companies shift to remote work and schools move classes online. And meal-kit service Blue Apron saw its stock price more than double Wednesday to $16.25, a possible indication that consumers expect to cook more and eat out less during the crisis.
(The excitement has since waned — Blue Apron shares climbed as high as $28.84 Thursday only to close down about 11.7 percent at $14.35.)
But some lesser-known names might be better bets than companies such as Blue Apron that will only see short-term benefits from the shifts the pandemic has brought on, according to Lamar Villere, portfolio manager of the Villere Balanced Fund.
“I would expect to see huge churn after the quarantine period or the shutdown period ends when people are looking to get out of the house, get back to restaurants,” Villere said. “That could be more of a mirage than a real long-term thesis.”
Villere pointed to Steris, an “infection prevention” company that offers disinfectant, surgical equipment and other products, as a good buying opportunity. Its share price is down roughly 20 percent year-to-date but Villere said health care providers will likely spend more money with companies like it amid the virus crisis.
There’s also Pool Corporation, the dominant player in the swimming pool supplies market. While consumers likely won’t be rushing to install new pools during the coming economic downturn, those that already have them will continue to spend on maintenance and repair, which account for 85 percent of Pool’s revenue, according to Villere.
“Nobody ever wants their pool to turn green,” he said. “You’re gonna take care of your pool, and that’s the one thing you can enjoy right now.”
