Nothing will ever be the same. This Coronavirus crisis is going to have a lasting impact on our lives, our families, society as a whole. But in the midst of the trauma, I believe there are some clear investment rationales for the aftermath. Here are 8 Covid investments you should consider from what we’re learning from the crisis.
Why should you Invest during the Coronavirus crisis?
It seems counter-intuitive right ?
Why should you be buying stocks while the whole world is confined and hard economic times loom ahead of us?
Well, remember Warren Buffet’s saying “Be greedy when others are fearful”.
Now is the time.
Asset prices are extremely depressed and amid the ruble left by Covid-19 some sectors emerge as key players for the years to come.
Here are the 8 Covid Investment rationales I think you should seriously consider, companies and sectors that will not only survive the crisis but emerge stronger and more relevant than ever.
This article assumes you have prior knowledge of stock investing, if that’s not the case, check out my Complete Guide to Start Trading.
1. Companies will accelerate their move to Cloud (Buy AMZN, MSFT)
When the Coronavirus crisis hit, companies that had made their move to Cloud (either Cloud natives or Cloud adopters) did incomparably better than the rest.
Business Continuity Plans for the players that had fully embraced digital (apps, services, workflows, ERP, CRM, …) made things immensely easier.
Among Cloud players, Amazon with their AWS and Microsoft with Azure are two behemoths that are trusting global growth in the sector.
AWS is growing at breakneck speed, over 30% a year and Azure is posting over 60% growth.
AMAZON (NASDAQ: AMZN)
MICROSOFT (NASDAQ: MSFT)
These are probably two of the most solid Covid Investments you should be considering.
2. Video conferencing software will become ubiquitous (Buy ZM)
The confinement of hundreds of millions of workers and families has brought to center stage a number of video conferencing solutions.
Among them, Zoom Video Communications is a fantastic service, enabling easy video-conferencing and sharing among teams or families.
Its interface is very user-friendly, it is being used daily by millions, businesses, schools, families, making it ever more relevant as an alternative to Skype.
Zoom Video Communications is listed on the Nasdaq, keep a close eye on it, that’s another solid Covid Investment candidate.
ZOOM VIDEO COMMUNICATIONS (NASDAQ: ZM)
3. Amazon becomes ever more relevant (Buy AMZN)
This one is quite straightforward. If people stay at home because they are not allowed to go out, e-commerce is their only way to get the products they need.
So once again Amazon prove sits relevance and the solidity of its model. Whatever the crisis, whether climate related, linked to a political event, or a healthcare warning, Amazon remains operational and delivers.
The company is here to stay and will keep thriving, there’s no real end in sight, it’s moat is just getting bigger.
4. Telemedecine will rise inexorably (Buy TDOC)
It was a bit early for generalized telemedecine during the crisis. But we can all see how relevant it could have been. With more telemedecine, more people could have been diagnosed in a much shorter period of time.
Big players in the telemedecine world will include Teladoc Health (NYSE:TDOC), a leading player you need to watch carefully.
Teladoc offers one to one consultations with an easy registration process:
Setup an account, you’re then connected to doctors, specialists or therapists that will be able to diagnose flu, infections, anxiety, stress, skin conditions, and provide advice on serious medical conditions. No matter what you’re facing, they’re available from wherever you are by phone, video, or app.
TELADOC (NYSE: TDOC)
5. The healthcare sector will permanently be in the limelight (Buy ABBV, LHCG, GILD)
Whether it is vaccines, medical supplies or equipment, drugs or OTC products, leading pharmaceuticals are going to benefit from two major trends:
- Ageing populations
- Growing focus on health care and protection
Among the best players in the industry, Abbvie is a longtime and reputed Dividend Aristocrat (NYSE:ABBV).
ABBVIE INC. (NYSE: ABBV)
Another interesting stock to follow is LHC Group, which provides health care services to patients through its home nursing agencies, hospices and long-term acute care hospitals (LTACHs). Its services monitor patients from a distance without keeping them in an expensive hospital bed, and demand for these kind of services will understandably keep growing in the long run, making it an interesting player to follow.
LHC GROUP (NASDAQ: LHCG)
Last but not least, hopes are running high for Gilead (GILD) to find a new Covid vaccine.
6. Inflation could be back, enter the Gold rush (Buy BAR, SGOL, IAU)
Factories and supply chains have been brutally interrupted. Starting them back will take time. Some products might go missing or be in short supply. I strongly believe prices are likely to rise.
And when inflation hits, currencies will face troubled times, and people will rush to commodities. Gold is usually the prime asset investors use when they want to hedge against inflation.
To make a bet on the rise of Gold prices, a simple way is to invest in a Gold ETF.
Among the best Gold ETFs, you will find:
- SPDR Gold Trust (NYSEARCA: GLD)
- GraniteShares Gold Trust (NYSE:BAR)
- Aberdeen Standard Physical Swiss Gold Shares: (NYSEARCA: SGOL)
- iShares Gold Trust: (NYSEARCA: IAU)
SPDR GOLD TRUST (NYSEARCA: GLD)
7. Cybersecurity will keep growing fast (Buy PANW)
Cybersecurity is growing fast and companies that develop solutions to protect all the data that resides online have been highly rewarded over the past few years.
The crisis has also shown how vulnerable a lot of companies remain. Malware, fishing, hacking and security breaches always thrive in periods of great turmoil. The Coronavirus crisis was no exception.
Among the companies best placed in the cybersecurity sector, Palo Alto Networks (NYSE:PANW) has been investing heavily in their Cloud Security solutions, making them very relevant in that investment thesis.
PALO ALTO NETWORKS (NYSE: PANW)
8. Key Biotechs will breakthrough in vaccine research (Buy BNTX, MRNA, REGN)
Around 30 biotechs are rushing to find a vaccine to Coronavirus. Understandably, the stakes are high, both from a public health perspective and from an economical perspective. The first biotech or pharma to announce a ready-to-market vaccine will clearly become a red hot player for some years to come.
For the time being we don’t know who will breakthrough so we can make an educated bet on two leading players.
BioNtech and Moderna are probably among the most advanced, with their mRNA vaccines (BNTX, MRNA). Very basically, mRNA molecules will teach your body to develop an immune system, and these vaccines can be developed and tested much quicker than traditional ones.
BIONTECH (NASDAQ: BNTX)
MODERNA (NASDAQ: MRNA)
Regeneron REGN has also been identified as a strong buy by many analyst. I suggest you also consider it seriously.
REGENERON (NASDAQ: REGN)
Video : 8 Covid Investments you Should Consider
The Coronavirus crisis has challenged our society in many aspects. Nothing will ever be quite the same.
As an investor, the crisis has also opened some interesting doors on sectors or key players that should thrive in the aftermath.
Whether through technology (videoconferencing, cloud), e-commerce, analytics (big data), education (e-learning), cybersecurity or biotech (vaccines), I have given you the names of some companies I believe could rocket.
I hope this has been useful, drop me a comment below if you think I’ve missed anything.
Safe trading to all.