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These 5 Stocks Look Like Solid Buys Amid the Coronavirus-Fueled Sell-Off

By Anders Bylund - Mar 12, 2020 at 3:35PM

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The COVID-19 panic weighed heavy on the markets again on Thursday. These five tech stocks should come back swinging when the crisis has passed.

What happened

Many technology stocks took another deep dive on Thursday due to the ongoing novel coronavirus crisis. None of the diverse companies in the table below reported any significant news of their own today, pinning the stock moves directly on the market's COVID-19 concerns.

Company

Industry

Lowest Intraday Price Drop on 3/12/2020

CAPS Rating (Out of 5)

Alteryx (AYX 0.88%)

Data analytics software

(17.1%)

5

Redfin (RDFN 7.77%)

Online-offline real estate broker

(16%)

4

NCR (NCR -2.72%)

Kiosks, barcode scanners, ATMs

(15.6%)

3

Nutanix (NTNX 0.10%)

Cloud-based IT infrastructure

(14%)

4

Uber Technologies (UBER 1.91%)

Ride-hailing services

(12.9%)

2

Data sources: Google Finance and Motley Fool CAPS.

So what

The COVID-19 crisis took a dramatic turn on Thursday, following the Trump administration blocking travelers from Europe to the U.S. over a 30-day period, starting this Friday. The virus has now infected more than 130,000 people worldwide, claiming nearly 5,000 lives so far. These figures include 1,400 cases and 40 deaths in the U.S.

If the disease itself doesn't slow down the global economy, the efforts to contain it most certainly will. The business travel sector alone is expected to lose $820 billion in revenue as the coronavirus pandemic plays out. The slowdown will filter down to every corner of the global economy, hitting business services like NCR, Alteryx, and Nutanix just as surely as it will affect consumer-facing companies such as Redfin and Uber.

A man runs away from a hail of viruses, carrying a large piggyback on his back with coins falling out along the way.

Image source: Getty Images.

Now what

The coronavirus outbreak may destroy some companies that don't have the financial means to survive a few months of dramatically lower revenue. With the exception of NCR, all of the companies mentioned above have at least as much cash as long-term debt on their balance sheets. NCR makes up for that shortcoming with strong cash profits, generating $339 million in free cash flow from $6.9 billion in top-line revenue over the last four quarters. In short, they all look like they will make it through this virus-based drama and bounce back up on the other side.

These stocks have fallen dramatically during the COVID-19 crisis, with one-month drops ranging from 12% for Redfin to 42% for NCR. All of them deserve a second look from investors looking for deeply discounted value plays. If you want to buy low and sell high, this is a good place to get started.

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Stocks Mentioned

NCR Corporation Stock Quote
NCR Corporation
NCR
$30.27 (-2.72%) $0.84
Uber Technologies, Inc. Stock Quote
Uber Technologies, Inc.
UBER
$20.85 (1.91%) $0.39
Nutanix Stock Quote
Nutanix
NTNX
$14.64 (0.10%) $0.01
Redfin Corporation Stock Quote
Redfin Corporation
RDFN
$8.88 (7.77%) $0.64
Alteryx Stock Quote
Alteryx
AYX
$48.84 (0.88%) $0.42

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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