Trump Plans Steady Economic Reboot: 5 Coronavirus-Proof Bets

U.S. President Donald Trump released “Opening Up America Again” guidelines on Apr 16. The latest protocols suggest a phased opening of the U.S. economy that has been battered by coronavirus-induced lockdowns and restrictions on businesses and citizens. Trump earlier had suggested May 1 as a probable date to lift embargos from several states.

Moreover, reversing his earlier approach, Trump now put the onus on governors to decide a date of reopening their respective states. States are asked to follow a list comprising six criteria, upon adherence to which, governors can consider reopening their respective states in a three-phased manner.

Three-Phased Approach to Curb Coronavirus Resurgence

The first-phase suggests reopening of gyms, restaurants, movie theaters and places of worship with strict physical distancing and sanitation practices to follow. The guidelines indicate schools to remain shut and continuation of work from home.

States can proceed to phase two if there is no evidence of rebound in coronavirus cases over a 14-day period. Schools and youth activities can resume so are public venues by complying with moderate social distancing protocols.

However, employers should continue to encourage remote working system wherever possible. Moreover, under both phases, the elderly and individuals with serious health conditions should continue to stay at home.

After another 14 days, states can proceed to the third phase that suggests much-relaxed rules and limited physical distancing protocols at restaurants, bars, movie theaters, sporting venues and places of worship.

Trump’s Phased-Opening Raises Optimism

Notably, the United States now reels under the burden of maximum coronavirus cases in the world, per the Johns Hopkins University data. Total infected persons in the country now scale to 671,425.

Moreover, the imposition of lockdowns in a bid to curb the coronavirus spread is taxing the U.S. economy. New claims of joblessness in the past month hit 22 million, wiping out almost all the U.S. job gains in the past decade.

 

Further, consumer spending activity, which remains a key driving force for the economy, shrank drastically, per the latest March retail sales data. (Read More: Coronavirus Hits Spending Activity: March Retail Sales Crash)

Nevertheless, Trump’s phased-guidelines related to the reopening of the economy are expected to raise investor morale amid a grim economic data and an uncertain business environment.

Below we discuss five stocks that are expected to benefit the most from this staggered reopening of the U.S.-economy. These fundamentally strong stocks have outperformed the S&P 500 composite on a year-to-date basis.

Year-to-Date Performance

Our Picks

Zoom Video Communications ZM is undoubtedly one of the biggest gainers of the coronavirus-induced remote working trend. Demand for this Zacks Rank #1 (Strong Buy) company’s cloud-native unified communications platform is expected to remain solid owing to extended work-from-home suggestions in the first and second phases. As schools remain closed, online learning wave will also continue, much to the benefit of Zoom Video. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for fiscal 2021 earnings is pegged at 42 cents per share, suggesting 20% growth from the figure reported a year ago. Long-term earnings growth rate stands at 26.6%.

Regeneron Pharmaceuticals REGN will most likely introduce a coronavirus treatment. The company identified hundreds of virus-neutralizing, fully human antibodies from which it will select the top two antibodies to develop a cocktail treatment for addressing the COVID-19 cases or preventing the contraction of infection. This Zacks #1 Ranked stock plans to initiate large-scale manufacturing with antibody cocktail therapy by mid-April.

Meanwhile, Regeneron and partner Sanofi began phase II/III studies both in and outside the United States to evaluate IL-6 inhibitor Kevzara for treating patients hospitalized with severe infection due to COVID-19.

The consensus mark for fiscal 2020 is pegged at $3.55 per share, indicating 11.1% growth from the year-ago reported figure. Long-term earnings growth rate stands at 23.3%.

Masimo Corporation MASI recently announced the full market release of Masimo SafetyNet, an economically scalable cloud-based patient management solution, created to enable clinicians to provide care for patients in hospital settings and non-traditional settings remotely. This innovative solution is now available globally and is likely to aid clinicians and health workers in fighting the global COVID-19 pandemic.

The Zacks Consensus Estimate for this #1 Ranked company's 2020 earnings is pegged at $3.55 per share, suggesting 10.3% growth from the figure reported a year earlier. Long-term earnings growth rate stands at 19.1%.

Netflix’s NFLX solid content portfolio cushioned it successfully against the coronavirus-led stock market rout. Courtesy of its diversified content portfolio, which is attributable to its heavy investments in the production and distribution of localized, foreign-language content and an expanding international footprint, Netflix is well-poised to benefit from a phased reopening of the U.S. economy.

Further, launch of affordably rated mobile plans across India, Indonesia, Malaysia, Philippines and Thailand is expected to boost this Zacks Rank #2 (Buy) company’s subscriber base in APAC.

The consensus mark for 2020 earnings is pegged at $6 per share, implying 45.3% growth from the prior-year reported number. Long-term earnings growth rate is pegged at 30%.

Meanwhile, a steady revival of the economy bodes well for Amazon AMZN. Based on its massive supply chain, the company has been able to dispense necessary household items to its users during shutdowns. The company’s aggressive hiring reflects solid demand for its services.

Moreover, this Zacks Rank #3 company’s cloud computing platform, Amazon Web Services (AWS), is instrumental in supporting the work-from-home routine. This apart, the industry participant announced the AWS Diagnostic Development initiative wherein it is investing $20 million. The program aims at accelerating the development of a faster COVID-19 testing.

The Zacks Consensus Estimate for 2020 earnings stands at $28.07 per share, indicating 22% growth from the preceding year’s reported number. Long-term earnings growth rate is pegged at 23.2%.



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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
 
Masimo Corporation (MASI) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
 
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