While the coronavirus has walloped the stock market this week, many traders have jumped into a safe haven: small-cap healthcare companies that are fighting the disease. For instance, Novavax (NASDAQ:NVAX) has been on a tear all year. The tiny biotech started off 2020 with its stock priced at $3.99 a share; now, the stock sells for $16.
How are the large caps doing?
There are probably a dozen healthcare companies that are working on a vaccine or cure for the coronavirus. These include mega-cap names like Sanofi, Johnson & Johnson, and GlaxoSmithKline, as well as larger biotechs like Moderna, Gilead Sciences, and Regeneron. Yet the market has been rewarding these names only slightly, and in some cases, not at all.
|Stock||Price on January 2||Price on February 28||Percentage Return|
|Johnson & Johnson||$145.87||$134.48||(7.9%)|
The small-cap names have done much, much better than the mega caps. For investors looking for a safe haven in the coronavirus meltdown, smaller is probably better.