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3 Beaten-Down Stocks Bouncing Back From a Coronavirus Sell-off

By Jason Hall - Updated Mar 13, 2020 at 4:25PM

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After an extended sell-off, investors are circling back to these names.

What happened?

After more than a week of bloodletting, shares of Ollie's Bargain Outlet Holdings (OLLI -0.38%)Vail Resorts (MTN 0.06%), and Live Nation Entertainment (LYV 0.63%) are finally getting a reprieve. As of 2:51 p.m. EDT on Friday, all three are on track to close one of the worst weeks for Wall Street in decades on a good note, with gains of 11.4%, 10.6%, and 12.2% respectively. 

So what

Needless to say, it's been a tough week for investors across the board, but particularly for anyone invested in companies that rely on people coming to an in-person experience. That's a definition that certainly includes discount retailer Ollie's, resort operator Vail Resorts, and entertainment promoter Live Nation. Going back a little further, the three have seen their stock prices fall 23%, 36%, and 47%, respectively, from their high-water marks in the past month. 

Man forcing falling line on a chart to go back up.

Image source: Getty Images.

And it's not just a case of investor perception, either, at least not for Vail and Live Nation. Earlier this week, Vail Resorts tossed its 2020 financial guidance over the cliff due to the uncertainty around bookings as coronavirus cases explode around the world, while Live Nation suspended all tours through the end of March and acknowledged that further postponements were a very real possibility. 

Now what

Today's bounce-back is likely at least to be a product of some investors seeing opportunity. Despite the very real likelihood that all three will face challenges in the months ahead -- Ollie's hasn't given any updates, but like most retailers will likely suffer a loss of business -- at some point, the world really will return to normal. 

And when that happens, it will be business as usual, which will certainly include vacations, concerts, and trips to Ollie's for surprising bargains on a bizarre range of things. 

That's not to say that today's big double-digit gains are the start of a sustained recovery. To the contrary, recession now seems very likely as massive segments of the economy including entertainment, air travel, and hospitality come to a screeching halt for an undetermined period of time.

But even with that potential reality affecting the short term, these three companies have the makings of incredible investments if you're willing to buy and hold through the short-term to enjoy the long-term profits when the world gets back to normal. 

Jason Hall has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Live Nation Entertainment and Ollies Bargain Outlet Holdings. The Motley Fool recommends Vail Resorts. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Live Nation Entertainment, Inc. Stock Quote
Live Nation Entertainment, Inc.
$98.51 (0.63%) $0.62
Vail Resorts, Inc. Stock Quote
Vail Resorts, Inc.
$244.17 (0.06%) $0.14
Ollie's Bargain Outlet Holdings, Inc. Stock Quote
Ollie's Bargain Outlet Holdings, Inc.
$65.42 (-0.38%) $0.25

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

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