More and more Americans are being laid off, working remotely, or just staying at home because of COVID-19, meaning the coronavirus is poised to create a major shift in the way companies do business. While some industries, such as travel and tourism, have taken a major hit and aren't expected to recover anytime soon, there are also plenty of businesses that are expected to flourish during this coronavirus bear market.
Here are five stocks across a variety of industries that will not only survive in this fear-fueled economy, but may thrive as the pandemic gets worse.
Companies around the world have turned to remote work in an effort to mitigate further COVID-19 infections. With all signs showing that the coronavirus is here to stay for quite some time, many businesses are going to have to embrace remote work as a long-term solution.
As such, platforms associated with remote work are expected to do well over the next few months. At the top of the list is Slack Technologies (WORK), one of the best-known software applications for remote teams. The company has already confirmed that it's added 7,000 new paying customers since the start of February, well over the 5,000 or so new customers the company added in the fourth quarter of 2019.
Slack already reported an aggressive 49% year-over-year growth rate in its recent fourth-quarter financial results. Although the company is still reporting a net loss of $89 million, this influx of new customers could lead to Slack's best quarter yet in terms of revenue.
Just as COVID-19 has pushed companies to embrace remote work, concerns about the virus have led healthcare organizations and patients to embrace telehealth services in lieu of in-person appointments. During the many press briefings regarding the virus, President Trump has consistently mentioned the importance of telehealth services. The federal government, specifically the Department of Health and Human Services (HHS), has recently pulled back rules that otherwise restricted Medicare beneficiaries from using these services.
Teladoc (TDOC -1.57%) is one of the leading telehealth companies in the market, with shares of the stock having shot up significantly over the past month. The company has said that it experienced a 50% surge in patient visits during early March, and this will likely be only the beginning. As the number of COVID-19 patients and those exhibiting symptoms grows, so too will the demand for telehealth appointments. The company had already reported a 27% year-over-year increase in revenue, and with this pandemic only further fueling the need for telehealth services, things have never looked better for the company.
3. Gilead Sciences
Companies working on a treatment for COVID-19 have quickly become hot stocks in the market. While many of these companies are early-stage biotech stocks, there are fair number of established healthcare giants working in this scene as well.
Gilead Sciences (GILD 0.39%) made news for being one of the first companies to get started with a COVID-19 treatment. Remdesivir is an intravenous drug that was previously developed to be used to treat Ebola. However, following an impressive recovery on the part of a COVID-19 patient given the drug on a compassionate-use basis, Remdesivir has since moved on quickly to late-stage clinical trials for the novel coronavirus, also known as SARS-CoV-2.
This includes two phase 3 trials in China's Hubei province and two more phase 3 trials in Asia, as well as a separate trial in the U.S. at the behest of the National Institute of Allergy and Infectious Diseases, all testing the drug's efficacy in reducing patient symptoms. While the exact market size for Remdesivir isn't certain, analysts from Morgan Stanley have predicted a $260 price tag per treatment plan (at least in China).
Even putting aside this COVID-19 treatment, Gilead is a pretty solid choice for investors. Its HIV business, which includes the oral prevention pill Truvada, has been growing at a 14% compound annual growth rate for the past decade. The company also has no shortage of potential blockbuster drug candidates. Filgotinib, a potential rheumatoid arthritis treatment, could generate up to $1.3 billion in annual revenue by 2024.
While not as exciting as some of the other stocks on this list, Clorox (CLX 1.58%) is seen as one of the few safe havens for more conservative investors during this bear market. As a leader in providing professional cleaning products, Clorox's appeal has historically been as a dividend stock, with the company offering a 2.5% dividend at the moment (slightly higher than the S&P 500 average).
Unsurprisingly, shares of Clorox have spiked following the escalation of COVID-19 cases around the world. Whether it's hand wipes, sanitizers, bleach, or any other cleaning product, retail stores across America have struggled to keep their shelves stocked as customers look to stock up on supplies while they can.
While Clorox has not traditionally been seen as a growth stock by any means, this COVID-19 pandemic could push its revenue figures to record highs. Prior to this, revenue had been relatively flat for Clorox, although diluted earnings per share had grown by 4% year over year.
While some stores, such as grocery stores and pharmacies, will still remain open no matter what, many retailers have decided (or been instructed) to either drastically reduce their hours or simply close their stores until COVID-19 dies down a little. With more people than ever sitting in their homes in an attempt to reduce needless exposure to the virus, online commerce is expected to become even more prevalent than it already is.
Amazon (AMZN 1.71%) has already seen a surge in business as many Americans try to stock up on supplies via online shopping. The company announced that it would be hiring an additional 100,000 workers to better handle the influx of online orders it has received.
Even before the pandemic began, Amazon predicted that revenue in the first quarter of 2020 would grow by between 16% and 22%, reaching between $69 billion and $73 billion. Now that COVID-19 is here, however, these estimates are likely to be surpassed in the coming weeks and months. While Amazon had looked like a good investment even before this pandemic, 2020 could end up being a record year for the company at this rate.