With cities under lockdown and businesses shut for months, the global economy has taken a sharp fall. In fact, fears of coronavirus resurgence also make complete reopening of the entire economy risky. The novel coronavirus has not only imposed restrictions on daily lifestyle but has forced people to adopt newer trends like work and study from home.
However, lately, several countries across the globe have seen a decline in new cases and eased lockdown criteria to boost economy. Similarly, different states in the United States are gradually easing lockdowns and restarting businesses. Let’s take a look at the firms that can make the most as the economy gears up to rebound.
Market Edges Up on Reopening Vibes
Since the coronavirus outbreak in the United States, stocks have been bearing the brunt of shut down businesses to maintain social distancing norms. But, recently, stocks have off their March lows with a number of new cases declining in several cities and investors getting hopeful that the economy will reopen by the end of May.
The S&P 500 has bounced up more than 30% from its lowest mark on Mar 23, since the coronavirus outbreak and is just 13.6% away from its record high. In fact, the virus outbreak started a remote working trend which helped the technology stocks beat the broader market decline from March 2020.
Tech-laden Nasdaq Composite is more than 35% off its virus lows and now up 1.6% for the current year. Gains from big names in technology like Facebook, Amazon, Google and Apple have helped the index move back into the green.
So far, the U.S. economy has lost a record 20.5 million jobs in the past one month and erased the record of 50-year low unemployment rate to now stand at 14.7%. With investors betting on a sooner reopening of the economy, stocks saw a steady uptick in the past few days. For the week ending May 8, the Dow and the S&P 500 were up 2.5% and 3.5%, while the Nasdaq jumped 6%.
Several companies are installing thermal cameras and framing policies to limit customers in store to help the virus from resurging and restart business.
Our Top Picks
Given the current scenario, it would be prudent to invest in growth stocks, as these company’s shares are anticipated to grow at a rate significantly higher than the average market rate. These stocks have a unique product line and often have a set of loyal customers or a significant amount of market share in their respective industry.
These companies do not pay out dividends, as they usually want to reinvest any earnings to accelerate growth in the short term. Hence, we have shortlisted five stocks that flaunt a Zacks Rank #1 (Strong Buy) and possess a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pluralsight, Inc. (PS - Free Report) provides technology skill development solutions. The company’s expected earnings growth rate for the current year is 33.3% against the Zacks Technology Services industry’s projected earnings decline of 0.6%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 16.7% upward over the past 60 days.
Quidel Corporation (QDEL - Free Report) develops, manufactures and markets diagnostic testing solutions. The company’s expected earnings growth rate for the current year is 20.2% against the Zacks Medical - Products industry’s projected earnings decline of 3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 16.7% upward over the past 60 days.
Vista Outdoor Inc. (VSTO - Free Report) designs, manufactures and markets consumer products for outdoor sports and recreation markets. The company’s expected earnings growth rate for the current year is 66.7% against the Zacks Leisure and Recreation Products industry’s projected earnings decline of 23.7%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 5.3% upward over the past 60 days.
SunOpta Inc. (STKL - Free Report) manufactures and sells plant and fruit based food and beverage products. For the current quarter, the expected earnings growth rate is 50% for the company compared with 10.7% for the Zacks Food - Miscellaneous industry. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 40% upward over the past 60 days.
Nautilus, Inc. (NLS - Free Report) designs, develops, sources, and markets cardio and strength fitness products. The expected earnings growth rate for the current quarter is 54.6% for the company compared with 17.3% for the Zacks Retail - Mail Order industry. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 90.5% upward over the past 60 days.
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