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U.S. Economy Likely to Reopen in May: 5 Top Growth Picks

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A silver lining seems to be emerging finally for the market ravaged by the coronavirus crisis. The United States, which has been under partial or complete lockdown in some states, might finally lift the same in May if the current projection regarding the coronavirus spread proves right. White House health advisor Dr. Anthony Fauci and U.S. Treasury Secretary Steven Mnuchin hinted at the development.

Coronavirus Impact Might be Less Than Expectation

The United States is currently leading globally in terms of both of the number of people infected with COVID 19 and death toll. However, on Apr 12, Fauci expressed cautious optimism regarding the fact that the outbreak of the deadly virus seems to be slowing down. Fauci is of the opinion that the imposition of social distancing measures has helped the United States in containing the spread of the virus to certain extent.

Although the death toll continues to go up, the curves related to hospitalization, intensive-care check-ins and intubations are gradually flattening. All these metrics are indicating that new cases are slowly decreasing. This is most prominent in New York, the country's hotspot of coronavirus pandemic.

On Mar 31, the White House estimated that the COVID 19 death toll may be somewhere between 100,000 to 240,000. However, within less than two weeks, several new studies have estimated that the actual death toll may be much less (within 50,000 to 60,000) than earlier estimated.

Market Exhibiting Positive Movement

Wall Street entered into bear market territory during Mar 9-10, ending its historic 11-year long bull run. However, it is to be noted that this bear market was not a result of any economic, financial or geopolitical factors but instead a health hazard — the coronavirus pandemic.

The bear market reached its lowest level on Mar 23 so far. Since then, the Dow and the S&P 500 have rallied 25% and 22.3%, respectively. Meanwhile, the Nasdaq Composite has surged 18.2% since Mar 23.

For the week ended Apr 9, the S&P 500 reported its best weekly performance since 1974. This was the best week for Nasdaq Composite since 2009. Meanwhile, the Dow posted its seventh best weekly gain in history. Notably, the S&P 500 and the Dow recorded more than 10% weekly gains in two of the last three weeks.

Unprecedented fiscal and monetary stimulus injected by the Trump administration and the Fed, and several major Eurozone and Asian economies have instilled investor confidence. All these positives will support the recovery process.

Our Top Picks

At this stage, it will be prudent to invest in stocks with strong growth potential with a favorable Zacks Rank. However, we have filtered our selection process by choosing only those stocks that have rallied more than 15% in the past month despite coronavirus carnage. Each of our picks sports a Zacks Rank #1 (Strong Buy) and Growth Score  of A. 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 month.

 

Koninklijke Philips N.V. (PHG - Free Report) is a global health technology company operating through Diagnosis & Treatment, Connected Care and Personal Health segments. It has ramped up production of patient vital signs monitors and portable ventilators and medical consumables for non-invasive and invasive ventilation to treat coronavirus-infected patients.

The company has an expected earnings growth rate of 3.5% for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 1.3% over the past 30 days. The stock price has surged 20.2% in the past month.

Dropbox Inc. (DBX - Free Report) provides a collaboration platform worldwide. Its platform allows individuals, teams, and organizations to collaborate and sign up for free through its website or app and upgrade to a paid subscription plan for premium features.

The company has an expected earnings growth rate of 40% for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 22.8% over the past 60 days. The stock price has advanced 15.2% in the past month.

Cardinal Health Inc. (CAH - Free Report) operates as an integrated healthcare services and products company in the United States and internationally. It provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices.

The company has an expected earnings growth rate of 1.9% for the current year (ending June 2020). The Zacks Consensus Estimate for the current-year earnings has improved 0.9% over the past 30 days. The stock price has jumped 19% in the past month.

Enphase Energy Inc. (ENPH - Free Report) designs, develops, manufactures, and sells home energy solutions for the solar photovoltaic industry in the United States and internationally. The company has an expected earnings growth rate of 26.3% for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 18.8% over the past 60 days. The stock price has appreciated 15.3% in the past month.

Chemed Corp. (CHE - Free Report) provides hospice and palliative care services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers in the United States. It operates through two segments, VITAS and Roto-Rooter.

The company has an expected earnings growth rate of 17.1% for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 4.3% over the past 60 days. The stock price has climbed 23.9% in the past month.

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