3 Stocks to Buy if Coronavirus Second Wave Hits
Will there be a second wave? Scientists around the world are evaluating that question out of concern for public health. Investors want to know what it means for their portfolios. Which stocks will do well if Coronavirus spikes again? Tickeron can give you some insight on that. By analyzing market trends from the first wave, you can predict behavior for the second.
Technology stocks have performed at historic levels this year, but the market is severely overbought. Third quarter earnings reports may bring some of those numbers back to earth. To compensate for that, look at performance during Q1 and Q2, the height of global Covid shutdowns. You should also evaluate twelve-month trends and sales projections for Q3.
Netflix will Continue to Climb
On January 1st, Netflix (NFLX) was trading at $323.57 a share. It bottomed out on March 16th, when it hit a 2020 low of $298.84. The virus was just beginning to impact the US economy. By mid-April, the US and all other affected countries were completely shut down. Netflix stock benefitted from the stay-at-home orders. It’s currently selling for over $500 per share.
Tickeron Screener has Netflix listed as a strong buy, with a projection of bullish behavior in both the one-week and one-month categories. The one-year historical analysis shows a market cap gain of 33.05%. Yahoo Finance predicts that sales growth for the third quarter will be 21.60%. That’s pretty good, but another Coronavirus wave could make that number climb even higher.
Technical analysis shows that Netflix is definitely a buy, but does fundamental analysis agree? Some might argue that Amazon Prime is gobbling up all the market share, but Netflix is producing original content at a faster rate. Viewers need fresh content. Movie theatres aren’t re-opening any time soon, if ever. Netflix is a definite buy if we see a second wave.
Amazon is the 300-Pound Gorilla in 2020
Sure, Tesla (TSLA) has made a lot of noise this year, but we’re not betting on them to thrive during a second wave. It’s possible that they are the most overbought stock of 2020. Amazon (AMZN), on the other hand, is a beast. After an annual low of $1849.09 on March 20th, Jeff Bezos’ brainchild has skyrocketed to over $3000 per share, an all-time high.
Needless to say, Tickeron has Amazon listed as a strong buy as 3 major fundamental metrics are signaling for a bullish momentum: Profit VS Risk rating, Price Growth rating, P/E Growth rating.
Yahoo Finance predicts Q3 sales growth at 22.20%. The one-year market cap growth is an astounding 58.42%. Those are King Kong sized numbers. They also make Amazon an unstoppable force, even if Covid-19 strikes again. That second wave may actually turn their growth rate into a tsunami.
You don’t have to be a financial analyst to see this one. Between Amazon Prime Video and their online shopping platform, the FAANG giant holds all the cards if the world goes into shut-down mode again. Even if that doesn’t happen, the way people shop and live their lives has changed forever after the first wave. Amazon is in the best position to take advantage of that.
Zoom has Outpaced Google Meet
It’s rare to see Google lose a fight, but they can throw in the towel on this one. Zoom (ZM) has outperformed them this year in every way. Surprisingly, the area that Google Meet fell short was user experience. They were simply unprepared for the sheer volume of users that descended upon them when the world went virtual. Zoom was ready for it.
In the past six months, Zoom’s stock has shown a gain of 267%. Q2 earnings actually exceeded expectations, which were fairly high. Tickeron has it listed as a buy, not a strong buy, but the 200% annual increase in market cap suggests it may be undervalued. Increased usage in the corporate and government sectors also indicate a spike will happen if a second wave hits.
Zoom’s movement in the past few weeks has been somewhat volatile, so if you’re trading, go long. Or buy some call options. The Aroon Indicator entered an uptrend on July 7th, so neither strategy will hurt you. Video conferencing is the preferred method of communication going forward and Zoom is the clear leader in the field. This stock will thrive in Q3.
Current price $269.52 is above $255.90 the highest resistance line found by A.I. Throughout the month of 06/07/20 - 07/08/20, the price experienced a +28% Uptrend. During the week of 06/30/20 - 07/08/20, the stock enjoyed a +4% Uptrend growth.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Aroon Indicator entered an Uptrend today. In 61 of 72 similar cases where ZM Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 85%.
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ZM in downward trend: price dove below 50-day moving average on March 28, 2024
ZM moved below its 50-day moving average on March 28, 2024 date and that indicates a change from an upward trend to a downward trend. In of 37 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
The 10-day moving average for ZM crossed bearishly below the 50-day moving average on April 01, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 13 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ZM declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for ZM entered a downward trend on April 26, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where ZM's RSI Oscillator exited the oversold zone, of 36 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on April 26, 2024. You may want to consider a long position or call options on ZM as a result. In of 86 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for ZM just turned positive on April 24, 2024. Looking at past instances where ZM's MACD turned positive, the stock continued to rise in of 40 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ZM advanced for three days, in of 284 cases, the price rose further within the following month. The odds of a continued upward trend are .
ZM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. ZM’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating slightly better than average sales and a considerably profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.483) is normal, around the industry mean (29.955). P/E Ratio (31.271) is within average values for comparable stocks, (155.220). Projected Growth (PEG Ratio) (4.989) is also within normal values, averaging (2.725). Dividend Yield (0.000) settles around the average of (0.081) among similar stocks. P/S Ratio (4.411) is also within normal values, averaging (55.388).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ZM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 89, placing this stock worse than average.
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Fundamental Analysis Ratings
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General Information
a developer of video-first communications platform and application
Industry PackagedSoftware