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5 Stocks to Make the Most of Coronavirus Scare

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China's National Health Commission confirmed that coronavirus cases in China have risen to 9,692 and the death toll in the mainland has touched 213. The figures astonishingly are higher than the number of severe respiratory syndrome (SARS) cases registered in 2003.

The virus has spread beyond the Chinese boundary with reports of cases in Germany, Australia and United Arab Emirates. On Jan 30, the World Health Organization (WHO) declared a global health emergency. After the Emergency Committee meeting held in Geneva, Dr. Tedros Adhanom Ghebreyesus, WHO’s director-general said that there are 98 cases of coronavirus reported in 18 countries apart from China already.

This rising concern that coronavirus will impact the global economy is dampening investors’ sentiment and has increased volatility in equity and bond markets.

Gold – A Safe Haven in Coronavirus Crisis

The volatility in the stock market induced by the coronavirus pandemic is pushing investors toward safe haven assets like gold.

Gold futures are trading near the highest close in more than six years and this has helped the miner’s shares to gain traction. On Jan 30, gold futures soared as the spread of coronavirus propelled demand for safe haven investments. Gold for April delivery increase 0.8% or $13.20 to settle at $1,589.20 per ounce.

Coronavirus Outbreak Lowers Mortgage Rate

Fears of the impact of coronavirus on the global economy have dampened the stock market and volatility has set in. The yield of the 10-year Treasury note has fallen over the past week, and mortgage rates typically follow its direction.

On Jan 30, Freddie Mac reported that the 30-year fixed-rate mortgage averaged 3.51%, lower by nine basis points from the prior week and is a percentage point lower now than it was a year ago. This had boosted mortgage applications and if coronavirus continues to spread at the current pace, it can push mortgage rates even lower.

Per the Weekly Mortgage Application survey by the Mortgage Bankers Association, demand for mortgages had increased 7.2% for the week ending Jan 24. Additionally, refinance applications rose 8% for the week ending Jan 24 and surged 146% from the same week last year.

5 Stocks to Buy

Given the massive outbreak of coronavirus and the fact that scientists are yet to discover the source of the virus or a cure that could put an end to the outbreak, it is quite evident that the effects of the pandemic will surely dampen the stock market. This in turn will push investors toward the yellow metal, benefiting miners’ stocks in the long run. Additionally, the drop in mortgage rate will also continue lure homebuyers. Hence, under such circumstances, investors can make the most by investing in these five Zacks Rank #1 (Strong Buy) companies. You can see the complete list of today’s Zacks #1 Rank stocks here.

Osisko Gold Royalties Ltd OR is an intermediate precious metal royalty company. Its Canadian Malartic Mine is the largest gold mine in Canada. The company holds a North America-focused portfolio of over 130 royalties, streams and precious metal offtakes.

The company’s expected earnings growth rate for the current year is 26.7% compared with the Zacks Mining - Gold industry’s projected earnings growth of 17.4%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 5.6% upward over the past 60 days.

Royal Gold, Inc. RGLD acquires and manages precious metal streams, royalties and related interests. The company is engaged in mining projects for gold, silver, copper, nickel, zinc, lead, cobalt and molybdenum.

Royal Gold’s expected earnings growth rate for the current year is 83.5% compared with the Zacks Mining - Gold industry’s projected earnings growth. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 2.3% upward over the past 60 days.

KB Home KBH operates as a homebuilding company, which builds and sells various homes, for attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, and active adult homebuyers.

The company’s expected earnings growth rate for the current year is 29.1% compared with the Zacks Building Products - Home Builders industry’s projected earnings growth of 3.3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 6.4% upward over the past 60 days.

PulteGroup, Inc. PHM engages in the homebuilding business in the United States. The company acquires and develops land primarily for residential purposes. PulteGroup’s expected earnings growth rate for the current year is 13.5% compared with the Zacks Building Products - Home Builders industry’s projected earnings growth of 3.3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 1.5% upward over the past 60 days.

Meritage Homes Corporation (MTH - Free Report) designs and builds single-family homes in the United States. The company’s expected earnings growth rate for the current year is 5.3% compared with the Zacks Building Products - Home Builders industry’s projected earnings growth of 3.3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 0.2% upward over the past 60 days.

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