As the coronavirus outbreak escalates in the United States, stay-at-home orders are being put-into-effect, travel-related businesses are being shut down, and various other business operations are coming to a grinding halt. What’s more, stocks slipped into the bear territory last month and capped Wall Street’s worst quarter since crippling financial crisis of 2008.
Things aren’t looking up for April either. President Trump said that Americans should prepare for what is going to be “a very, very painful two weeks” as the outbreak continues to reach its peak. The death toll in the country has already topped that of China, where the outbreak originated.
But investors shouldn’t avoid stocks this month. In fact, one should look for potential avenues to invest as the rising coronavirus cases puts the spotlight on a number of sectors. Healthcare stocks, undoubtedly, could be April’s best buys. After all, drug makers will be in immense demand mostly due to their plans to develop vaccines for the virus. Undoubtedly, the sector in the past few months defied the broader market selloff and ended in the green. Notably, here are a couple of drug makers that are developing treatments for COVID-19, making them compelling investment choices.
First on the list is Moderna, Inc
. (MRNA - Free Report
) . The company has received funding from CEPI in January to produce mRNA vaccine to fight coronavirus. The company had shipped the first batch of mRNA vaccine for a Phase 1 clinical trial in the United States. And on Mar 16, the first patient in the Phase 1 trial had received a dose of the mRNA vaccine. Further, 45 more patients are expected to grow through the Phase 1 trial, which is set to conclude by Jun 1, 2021.
Nonetheless, Moderna’s shares have soared 51.4% in the first three months of this year and are further expected to gain 9.8% in the second quarter. The Zacks Consensus Estimate for its current-year earnings has risen 6.2% over the past 60 days. Moderna currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Like Moderna, Regeneron Pharmaceuticals, Inc.
(REGN - Free Report
) is working on developing monoclonal antibodies to treat COVID-10 patients. During clinical testing, the company uses genetically-engineered mice with humanized immune systems in its VelocImmune platform. The company’s spokesperson recently said,“ we’re aiming to have hundreds of thousands of prophylactic doses ready for human testing by end of August.”
Regeneron’s shares are up 29.8% so far this year. In fact, the company’s expected earnings growth rate for the current year is a promising 16.2%. The Zacks Consensus Estimate for its current-year earnings has risen almost 6% over the past 60 days. Regeneron currently flaunts a Zacks Rank #1 (read more: 4 Top Biotech Stocks to Buy in the Time of Coronavirus
By the way, due to the lockdown, companies that provide home entertainments or allow employees to work remotely are poised to benefit. And some of the prominent names are Zoom Video Communications, Inc
. (ZM - Free Report
) and Netflix, Inc
. (NFLX - Free Report
) . Both of them carry a Zacks Rank #2.
As coronavirus spreads at an alarming rate, Zoom has been seeing an exponential rise in demand for its services. Amid this crisis, the company made smart moves, such as removing its 40-minute calls from accounts that are free, eventually luring users to the platform. Zoom, thus, has secured the number one spot on Apple App Store and Android downloads.
Thanks to the lockdown, businesses and schools are now increasingly experimenting with Zoom’s video conferencing tools, which helped its daily user count more than quadruple in recent times, per JP Morgan analysts.
Shares of Zoom jumped nearly 50% last month. To top it, the company’s expected earnings growth rate for the current quarter and year is 233.3% and 20%, respectively. The Zacks Consensus Estimate for its current-year earnings has surged 55.6% over the past 60 days.
Streaming of movies and shows, by the by, has increased significantly. Netflix will certainly gain from this trend. In fact, it continues to add to its subscriber growth, mostly driven by content strength, focus on originals across various genres and languages, rapid international expansion and partnerships with telcos.
Netflix’s shares have gained 16% on a year-to-date basis. It’s expected earnings growth rate for the current quarter and year is 171.7% and 47%, respectively. The Zacks Consensus Estimate for its current-year earnings has climbed 0.5% over the past 60 days.
Meanwhile, the shutdown of gyms is proving beneficial for Peloton Interactive, Inc
. (PTON - Free Report
) . The company manufactures in-house exercise equipment like treadmills and stationary bikes, which are now likely to be in demand among fitness enthusiasts. While Peloton has a Zacks Rank #2, the Zacks Consensus Estimate for its current-year earnings has advanced 16% over the past 60 days.
Shares of Peloton rose 5% in March and the company reported more than two million members at the end of its second fiscal quarter on Dec 31, 2019. During the said quarter, its quarterly revenues climbed 77% to $466.3 million.
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