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5 Blue-Chip Stocks to Buy on Coronavirus Vaccine Hope
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Wall Street bulls, which regained momentum last week after two months of market turmoil, strengthened further on Nov 9. A series of better-than-expected economic data for September and October despite lack of a fresh fiscal stimulus and, more importantly, positive development on the coronavirus vaccine front significantly boosted investors' confidence in risky assets like equities.
The possibility of a COVID-19 vaccine in the near future means that the economy can reopen and gradually operate at the pre-pandemic rate. The news had a strong impact on the stock market. Out of the three major stock indexes, the Dow — more inclined toward cyclical stocks rather than the growth-oriented technology stocks — is likely to benefit the most.
Positive News on COVID-19 Immunization
On Nov 9, Pfizer Inc. (PFE - Free Report) and BioNTech SE (BNTX - Free Report) announced that their jointly developed potential vaccine BNT162b2 was more than 90% effective in preventing COVID-19 in trial participants with no previous evidence of the SARS-CoV-2 infection.
By the third week of this month, more clinical trial data will be available to determine whether this candidate has achieved the safety milestones. The companies are planning to submit for Emergency Use Authorization to the FDA if safety milestones are achieved. Notably, the coronavirus has taken more than 1.2 million lives globally so far.
Dow Jumps on Potential Vaccine News
On Nov 9, the Dow — popularly known as the blue-chip index — jumped nearly 3% or 834.57 points to close at 29,157.97. This was the best single-day performance of the index since Jun 5. Year to date, the Dow is up 2.2% and has reentered positive territory for the first time since Oct 16.
Notably, during the intraday session, the blue-chip index soared nearly 5.7% or more than 1,600 points to touch a fresh all-time high of 29,933.83, surpassing its previous all-time high of 29,568.57 recorded on Feb 12.
At its current level of 29,157.97, the Dow is well above its 50-day and 200-day moving averages of 27,901.36 and 26,169.04, respectively. In financial literature, the 50-day moving average line is generally recognized as the short-term trendsetter, while the 200-day moving average is considered a long-term trendsetter.
It is widely recognized in the technical analysis space that whenever the 50-day moving average line surges ahead of the 200-day moving average line, a long-term uptrend for the index becomes a strong possibility. At this stage, it will be prudent to invest in Dow stocks with a favorable Zacks Rank that are likely to provide solid returns in the near term.
Our Top Picks
We have narrowed down our search to five Dow stocks with strong short-term and long-term (3-5 years) growth potential. All these stocks witnessed robust earnings estimate revisions in the last 7 to 30 days, indicating solid business prospects. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past six months.
NIKE Inc. (NKE - Free Report) is engaged in the business of designing, developing and marketing of athletic footwear, apparel, equipment and accessories, and services for men, women and children worldwide. Despite the volatile macroeconomic and geopolitical environment, NIKE expects to continue investing in key capabilities to aid digital transformation and deliver robust growth in fiscal 2021 (ending May 2021) and beyond.
The Zacks Rank #1 company has an expected earnings growth rate of 76.9% for the current year. Its long-term growth rate is 16.7%. The Zacks Consensus Estimate for the current year has improved by 1.8% over the last 30 days.
Dow Inc. (DOW - Free Report) provides various materials science solutions for consumer care, infrastructure, and packaging markets in the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. It operates through the Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials and Coatings segments.
Although the company's current-year expected earnings growth rate is negative, it has estimated earnings growth of 82.3% for next year. The Zacks Consensus Estimate for the current and next year has improved 35.2% and 8.9%, respectively, in the last 30 days. This Zacks Rank #1 company has a long-term growth rate of 5%.
The Procter & Gamble Co. (PG - Free Report) provides branded consumer packaged goods in North and Latin America, Europe, the Asia Pacific, Greater China, India, the Middle East, and Africa. It operates in five segments: Beauty; Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care.
The Zacks Rank #2 company has an expected earnings growth rate of 8.4% for the current year (ending June 2021). Its long-term growth rate is 7.6%. The Zacks Consensus Estimate for the current year has improved 2.8% over the last 7 days.
3M Co. (MMM - Free Report) develops, manufactures, and markets various diversified technology products worldwide. It operates through four business segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer.
Although the company's current-year expected earnings growth rate is negative, it has estimated earnings growth of 9.2% for next year. The Zacks Consensus Estimate for the current and next year has improved 0.5% and 0.8%, respectively, in the last 7 days. The Zacks Rank #2 company has a long-term growth rate of 9.5%.
Microsoft Corp. (MSFT - Free Report) has a dominant position in the desktop PC market, with its operating systems being used worldwide. The company has doubled down on the cloud computing opportunity. Moreover, it is one of the three largest providers of gaming hardware.
The Zacks Rank #2 company has an expected earnings growth rate of 17% for the current year (ending June 2021). Its long-term growth rate is 12.5%. The Zacks Consensus Estimate for the current year has improved 0.9% over the last 7 days.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
5 Blue-Chip Stocks to Buy on Coronavirus Vaccine Hope
Wall Street bulls, which regained momentum last week after two months of market turmoil, strengthened further on Nov 9. A series of better-than-expected economic data for September and October despite lack of a fresh fiscal stimulus and, more importantly, positive development on the coronavirus vaccine front significantly boosted investors' confidence in risky assets like equities.
The possibility of a COVID-19 vaccine in the near future means that the economy can reopen and gradually operate at the pre-pandemic rate. The news had a strong impact on the stock market. Out of the three major stock indexes, the Dow — more inclined toward cyclical stocks rather than the growth-oriented technology stocks — is likely to benefit the most.
Positive News on COVID-19 Immunization
On Nov 9, Pfizer Inc. (PFE - Free Report) and BioNTech SE (BNTX - Free Report) announced that their jointly developed potential vaccine BNT162b2 was more than 90% effective in preventing COVID-19 in trial participants with no previous evidence of the SARS-CoV-2 infection.
By the third week of this month, more clinical trial data will be available to determine whether this candidate has achieved the safety milestones. The companies are planning to submit for Emergency Use Authorization to the FDA if safety milestones are achieved. Notably, the coronavirus has taken more than 1.2 million lives globally so far.
Dow Jumps on Potential Vaccine News
On Nov 9, the Dow — popularly known as the blue-chip index — jumped nearly 3% or 834.57 points to close at 29,157.97. This was the best single-day performance of the index since Jun 5. Year to date, the Dow is up 2.2% and has reentered positive territory for the first time since Oct 16.
Notably, during the intraday session, the blue-chip index soared nearly 5.7% or more than 1,600 points to touch a fresh all-time high of 29,933.83, surpassing its previous all-time high of 29,568.57 recorded on Feb 12.
At its current level of 29,157.97, the Dow is well above its 50-day and 200-day moving averages of 27,901.36 and 26,169.04, respectively. In financial literature, the 50-day moving average line is generally recognized as the short-term trendsetter, while the 200-day moving average is considered a long-term trendsetter.
It is widely recognized in the technical analysis space that whenever the 50-day moving average line surges ahead of the 200-day moving average line, a long-term uptrend for the index becomes a strong possibility. At this stage, it will be prudent to invest in Dow stocks with a favorable Zacks Rank that are likely to provide solid returns in the near term.
Our Top Picks
We have narrowed down our search to five Dow stocks with strong short-term and long-term (3-5 years) growth potential. All these stocks witnessed robust earnings estimate revisions in the last 7 to 30 days, indicating solid business prospects. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past six months.
NIKE Inc. (NKE - Free Report) is engaged in the business of designing, developing and marketing of athletic footwear, apparel, equipment and accessories, and services for men, women and children worldwide. Despite the volatile macroeconomic and geopolitical environment, NIKE expects to continue investing in key capabilities to aid digital transformation and deliver robust growth in fiscal 2021 (ending May 2021) and beyond.
The Zacks Rank #1 company has an expected earnings growth rate of 76.9% for the current year. Its long-term growth rate is 16.7%. The Zacks Consensus Estimate for the current year has improved by 1.8% over the last 30 days.
Dow Inc. (DOW - Free Report) provides various materials science solutions for consumer care, infrastructure, and packaging markets in the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. It operates through the Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials and Coatings segments.
Although the company's current-year expected earnings growth rate is negative, it has estimated earnings growth of 82.3% for next year. The Zacks Consensus Estimate for the current and next year has improved 35.2% and 8.9%, respectively, in the last 30 days. This Zacks Rank #1 company has a long-term growth rate of 5%.
The Procter & Gamble Co. (PG - Free Report) provides branded consumer packaged goods in North and Latin America, Europe, the Asia Pacific, Greater China, India, the Middle East, and Africa. It operates in five segments: Beauty; Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care.
The Zacks Rank #2 company has an expected earnings growth rate of 8.4% for the current year (ending June 2021). Its long-term growth rate is 7.6%. The Zacks Consensus Estimate for the current year has improved 2.8% over the last 7 days.
3M Co. (MMM - Free Report) develops, manufactures, and markets various diversified technology products worldwide. It operates through four business segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer.
Although the company's current-year expected earnings growth rate is negative, it has estimated earnings growth of 9.2% for next year. The Zacks Consensus Estimate for the current and next year has improved 0.5% and 0.8%, respectively, in the last 7 days. The Zacks Rank #2 company has a long-term growth rate of 9.5%.
Microsoft Corp. (MSFT - Free Report) has a dominant position in the desktop PC market, with its operating systems being used worldwide. The company has doubled down on the cloud computing opportunity. Moreover, it is one of the three largest providers of gaming hardware.
The Zacks Rank #2 company has an expected earnings growth rate of 17% for the current year (ending June 2021). Its long-term growth rate is 12.5%. The Zacks Consensus Estimate for the current year has improved 0.9% over the last 7 days.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>