(1:10) - Post Election: Stimulus Package and Covid-19 Vaccine (8:00) - Will We Be Entering Into A Dark Winter? (12:30) - What Industries Were Impacted By The Vaccine Announcement? (22:40) - The Difficulties of Distributing A Vaccine: When Can We Expect It? (30:30) - Episode Roundup: MAC, HLT, MAR, CARR, AAWW, MCK, USFD, THO Podcast@Zacks.com
Welcome to Episode #248 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is joined by Zacks Chief Equity Strategist, John Blank, to discuss what is going on with the economic recovery to date, the possibility of another stimulus package to help airlines and the hospitality industries and the impact of Pfizer’s announcement that its vaccine is 90% effective and they’ll roll it out next year.
There’s a lot going on.
Is the Work-From-Home Trade Over?
Stocks popped on Pfizer’s vaccine news. It was the first glimmer of hope that the pandemic may be winding down next year.
Suddenly, the “work-from-home” stocks weren’t the place to be but those that had been ignored for the past 7 months, such as industrials and banks, were hot.
It’s too soon to say that the work-from-home trade is actually over. But the stock market is forward looking, and a lot of those stocks have stretched valuations, so it’s not surprising that there may be some profit taking and a rotation into other industries.
What about those industries most impacted by the pandemic and the ongoing restrictions?
Many had been left for dead but is there an opportunity?
Malls, Hotels, Food Distribution and RVs
Two areas that investors have shunned have been shopping malls and hotels.
But if you dig deeper, you’ll see that the food distributors have also taken a hit and while the RV makers benefitted from the pandemic over the summer as consumers wanted the “safety” of their own space in which to travel, investors are worried that the trend will end with the vaccine.
Macerich ( owns 47 regional shopping malls near big urban centers in the United States. As of Oct 7, all of its properties had finally reopened. Rent collections have been improving since the spring. In the third quarter rent collections were at 80%, up from 61% in the second quarter. Macerich has resumed paying a dividend. Shares popped on the vaccine news, but are still cheap with a forward P/E of jut 3.8x. MAC Quick Quote MAC - Free Report)
Hilton ( is also seeing improvement from its second quarter, especially in occupancy. But there’s still a long way to go to get back to pre-pandemic levels. There’s also uncertainty as another wave of the virus is hitting the US and Europe. It’s dividend and share repurchases remain suspended. HLT Quick Quote HLT - Free Report)
Marriott ( saw big improvement in the third quarter in China, which has the virus mostly under control, as occupancy in Greater China was 61%. North America, however, still struggled at 37%, but that was double Q2 occupancy. Shares were up over 20% on the vaccine news, but are still down 22% year-to-date. MAR Quick Quote MAR - Free Report)
US Foods ( is one of the largest food distributors in the United States servicing over 300,000 restaurants and food service operators. They are at ground zero of the impacts from the pandemic but in the third quarter case volume and net sales improved throughout the quarter. At the end of the third quarter, it had $1 billion in cash on hand. USFD Quick Quote USFD - Free Report)
Thor Industries ( makes RVs and the popular Airstream. Thor was considered a pandemic play. The shares peaked in August and have lost 24% in the last 3 months. But demand from both Baby Boomers and Millennials is expected to remain well past the end of the pandemic. RV buyers tend to upgrade to the new model every three to five years. Thor shares are cheap, with a forward P/E of just 12. THO Quick Quote THO - Free Report)
What else should you know about investing in a post-vaccine economy?
Tune into this week’s podcast to find out.
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