7 Stocks to Buy During the COVID-19 Sell-Off
Archived Article From Apr 11
In the past month the stock market has been fluctuating wildly due to economic slowdown policies onset by the COVID-19. In such pressing times, it is of paramount importance for us not to rashly act on emotion but rather on quantitative evidence and in doing so we would not only be able to shield ourselves from loss but rather take advantage and profit from it amidst of the chaos. This begs the question as to which stocks should an investor purchase now? After careful analysis, these are our recommendations:
1. The Clorox Company (NYSE:CLX)
Due to the probabilities that COVID-19 would continue for the foreseeable future, the demand for disinfectant products namely reputable products such as Clorox has been high. This in addition to a dividend yield of 2.3% and a probable spike in sales in 2020 and 2021 would lead to an increase in revenue in addition to its already consistent sales.
2. Apple Inc (NASDAQ:AAPL)
AAPL has fell 21% since 12 Feb to $267.99 at Thursday’s close. This nosedive is due to Apple’s profitability being affected by several fronts including the closure of all corporate offices, stores and manufacturing operations globally. However, with massive strides in containment measures being taken place, it is highly plausible that the Apple will resume operations by the the second half of the year, just in time for the release of the highly anticipated 5G iPhone.
3. Bank Of America (NYSE:BAC)
Starting from the 21st of Feb, BAC has fell about 28.81% as of closing on 9th of April, a measly 91.3% of its book value. This coupled together with a dividend of $0.18 per share and consistent stock buybacks make Bank of America a great investment in the long term despite lowered federal interest rates.
4. Amazon.com (NADAQ:AMZN)
AMZN is currently trading at $2042.76 and with a high P/E ratio, skeptics may see it as overvalued. However, with global social distancing measures limiting people from travelling to conventional brick and mortar stores and the absence of essential products, it is expected for customers to flock to e-retailers such as Amazon to full fill their needs. Furthermore, with Amazon’s growing cloud business along with Buy recommendations from Deutsche Bank and Aegis Capital among other banks, it is highly recommended to purchase AMZN at a discounted price during the sell-off.
5. American Water Works (NYSE:AWK)
America’s biggest publicly traded water utility, AWK will continue to have consistent growth despite COVID-19 due to its position as a basic service making it recession proof. This together with the fact that water consumption is not set to change anytime soon, its cash flow is highly predictable for the foreseeable future. Furthermore, due to American Water Works being highly regulated against price hikes, investors can rest assured against volatile wholesale pricing.
6. Netflix (NASDAQ:NFLX)
Among other technology stocks, NFLX stocks price has gone up by 14.57% from the start of the year opposed to the S&P 500 which has gone down by about 13.65% in the same amount of time. This reflects Wall Street’s collective positive outlook on the home entertainment industry during COVID-19 as well as their belief that containment efforts would support Netlfix’s business. This is addition to an additional 28 million subscribers signed on in 2019 despite competition from Disney and Amazon and a 3% increase in operating profit margin makes NFLX an increasingly promising investment despite their current weak cash position that may prove disadvantageous during a recession.
7. U.S. Bancorp (NYSE:USB)
Among other big banks, U.S. Bancorp is the most efficient and consistently tops out on Return on Investments (ROI). USB is also currently at 127.5% of its book value. This in addition to a dividend yield of 4.42% and a low P/E ratio of 9.15. U.S. Bancorp’s conservative lending makes it less risky compared to other big banks especially due to the lowered federal interest rates and expected higher loan default due to an increase in unemployment offset by COVID-19.
