Canada markets closed

5 Stocks to Fight Volatility Stemming From the Coronavirus Spike

Sreoshi Bera

Hopes of steady economic recovery are dependenton America’s ability to fight the coronavirus pandemic. However, the resurgence of COVID-19 cases, lack of a uniform nationwide strategy and no availability of vaccine put human lives at risk and stall economic recovery.

Major indexes have been going through a rollercoaster ride, closing more than 2% lower on Jun 26. In fact, loses in the week ending Jun 26 led to second weekly drop in three weeks for the benchmarks.

Rising Infections Stalling Reopening Plans

On Jun 26, U.S. states saw a single-day record rise of 47,341 new coronavirus cases, with Florida, Texas, California and Arizona at the forefront. The states surpassed their highest single-day record of 40,212cases the day before. The United States has recorded more than 2.6 million cases so far and the drastic increase in cases has halted reopening plans in North Carolina, Louisiana and Kansas.

Governors of New York, New Jersey and Connecticut are continuing the reopening process but are imposing a 14-day quarantine for visitors from hard-hit states. Shares of companies that would benefit from an economic reopening tumbled on Jun 26. Major airlines companies like United Airlines, American Airlines and Delta Airlines closed more than 3% lower, while cruiseliner Norwegian Cruise line dropped 5%.

States of Texas and Florida are the first to reverse some reopening measures. Governor of Texas has ordered bars and establishments that has more than 51% customer for alcoholic beverages to shut down operations. And restaurants have to limit on-premise dining to less than 50% indoor capacity.

In Florida, on-premise consumption of alcohol at bars has been suspended after the state reported 8,942 new virus cases in a day on Jun 26, shattering its single-day record of 5,508 cases just two days ago. Officials are now taking stern measures on businesses that don't follow guidelines like wearing masks, social distancing and limiting occupancy.

In Arizona, the number of new cases jumped by 5.4% on Jun 26, which surpasses the seven-day average of 2.9%. Investors have been optimistic regarding development of COVID-19 vaccines that could allow economies to fully reopen and people to return to work and school. Hence, it’s time for investors to sail through the current volatility by investing in defensive and work-from-home stocks.

5 Stocks to Buy Now!

It is prudent to invest in defensive stocks in this highly volatile market scenario. These stocks provide stable returns regardless of market gyrations, leaving demand for these constant even during stressful times. Though defensive stocks do not give high returns when the economy is expanding compared to technology and cyclical sectors, these act as safe assets for investors.

Meanwhile, remote working stocks can also prove to be safe bets in the current scenario. These companies help businesses function in full capacity even with lockdowns in place. And given the new normal trend of work-from-home, and companies promoting employees to work remotely for safety, these stocks are poised to grow.

Hence, investing in stocks from five defensive stocks like utilities, healthcare and consumer staples and remote working can prove prudent in the current scenario. What’s more? These stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

B&G Foods, Inc. BGS manufactures, sells, and distributes a portfolio of shelf-stable and frozen food, and household products. The company’s expected earnings growth rate for the current year is 27.4% against the Zacks Food - Miscellaneous industry’s estimated earnings decline of 16.5%. The Zacks Consensus Estimate for its current-year earnings has climbed 28.7% over the past 60 days.

Vistra Energy Corp. VST engages in the electricity business, providing electricity and natural gas to residential, commercial and industrial customers. The company’s expected earnings growth rate for the current year is 64.7% against the Zacks Utility - Electric Power industry’s estimated earnings decline of 0.6%. The Zacks Consensus Estimate for its current-year earnings has moved up 14.8% over the past 60 days.

Quidel Corporation QDEL develops, manufactures, and markets diagnostic testing solutions for applications in infectious diseases, cardiology, thyroid, women's and general health, eye health, gastrointestinal diseases, and toxicology. The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Medical - Products industry’s estimated earnings growth of 3.2%. The Zacks Consensus Estimate for its current-year earnings has moved more than 100% up over the past 60 days.

Zoom Video Communications, Inc. ZM provides a video-first communications platform. The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Internet - Software industry’s estimated earnings growth of 3%. The Zacks Consensus Estimate for its current-year earnings has climbed more than 100% over the past 60 days.

Fortinet, Inc. FTNT provides broad, integrated, and automated cybersecurity solutions. The company’s expected earnings growth rate for the current year is 13.8% against the Zacks Security industry’s estimated earnings decline of 15%. The Zacks Consensus Estimate for its current-year earnings has moved up 8.1% over the past 60 days.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Quidel Corporation (QDEL) : Free Stock Analysis Report
 
BG Foods, Inc. (BGS) : Free Stock Analysis Report
 
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
 
Vistra Energy Corp. (VST) : Free Stock Analysis Report
 
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.