3 Stocks at Fire-Sale Prices After the Coronavirus Crash -- Are They Worth Buying?

The stock market has certainly taken investors on a roller-coaster ride in March, and there have been more bad days than good. Even after the recent rebound fueled by the stimulus package, the Dow Jones Industrial Average is still down about 25% from its recent high.

On a positive note, times like these can be excellent opportunities to find long-term winners that have been beaten down. And there is no shortage of beaten-down stocks right now.

Image Source: Getty Images.

Three stocks trading at fire-sale valuations after the recent market downturn are giant automaker General Motors (GM 1.20%), casino operator MGM Resorts (MGM -1.24%), and mall REIT Simon Property Group (SPG -0.06%). Here's just how cheap each has become and which (if any) could be a good stock for long-term investors to buy now.

Data source: YCharts and company earnings reports. Figures as of March 26, 2020, at 10 a.m. EDT. P/FFO was used instead of P/E for Simon Property Group, as it's a better metric of REIT earnings.

No cars are being produced right now, but will the auto industry rebound?

I won't sugarcoat it. People aren't really buying new cars right now. Not only does social distancing make it rather impractical to spend time with a salesperson at a dealership, but recession fears and COVID-19 uncertainty have given investors reason to pump the brakes when it comes to making large purchases. Plus, GM's North American factories are closed down, so it isn't producing anything new -- in fact, GM plans to use its factories to help manufacture ventilators to help with the COVID-19 efforts.

Now, GM certainly has enough liquidity to get through the pandemic. The company recently announced that it was drawing down about $16 billion from its credit lines, and it also anticipates having at least $15 million in additional cash on hand at the end of March.

The big question is how long the pandemic -- and the recession it's causing -- will last. If the economy rebounds relatively quickly, GM should be in fantastic shape going forward. But the company could certainly run into financial problems if the recession lasts for a long time, and that's why shares are down 40% this year.

Casinos are shuttered, but how long will the pain last?

All of MGM Resorts' casino properties in the United States have suspended operations, including its numerous mega resorts on the Las Vegas Strip. Plus, casino stocks (and MGM in particular) have lots of debt on their balance sheets, so this cash flow disruption can get expensive, and fast.

However, the company is taking prudent steps to weather the storm. It cancelled a $1.25 billion buyback initiative, and the company had $2.4 billion of cash and investments on its balance sheet as of March 11.

To be perfectly clear, MGM Resorts' first- and second-quarter numbers are going to look horrible. They just are. The biggest question is how quickly their properties can reopen and how quickly tourism will get back on track. MGM's CEO, Jim Murren, recently said that he doesn't expect the COVID-19 pandemic to have a long-term impact on the company's business, but how long the outbreak and its economic effects last will play a big role in just how financially healthy the company comes out on the other side.

A mall operator that isn't operating malls

Simon Property Group is the largest retail-focused real estate investment trust, or REIT, in the market. Simon owns and operates a massive portfolio of malls, including high-end properties under the Mills brand name and the largest chain of outlet malls under the Premium Outlets brand.

As you might suspect, Simon's U.S. properties are currently closed. They are scheduled to reopen on March 29, but there's a high probability that the closures will last for at least a few weeks beyond that date. Plus, there's concern that many of Simon's tenants will be unable or unwilling to pay rent during the forced closures, like we recently heard from Cheesecake Factory (CAKE -1.19%).

However, Simon should make it through the pandemic just fine. The company recently announced a new $6 billion credit facility and now has a total of $9.5 billion in borrowing capacity.

Like with the other two companies, the question is how long the closures will last and what will happen after they reopen. Will mall traffic in Simon's properties be at or near its previous levels once they reopen, or will people still be hesitant to go out in public?

Are they worth buying now?

These are three companies that are among the industry leaders in their respective fields -- in Simon's case, the leader. All three have excellent management teams, and all three have sufficient financial resources to absorb the expected impact of the COVID-19 pandemic.

The key word to pay attention to is expected. The questions that remain unanswered are just how long the coronavirus pandemic will effectively shut down the American economy and how quickly consumer demand for new cars, travel, and shopping will rebound when these businesses are able to safely reopen.

I'm of the opinion that there will be a ton of built-up demand once we get the all-clear. After all, this isn't a typical recession; it's a temporary and deliberate pause to a strong economy.

If the COVID-19 outbreak peaks in April and companies can get back to business as usual by summer (which is quite probable), all three of these could look like insanely good bargains at the current prices. Just be aware that there's a tremendous amount of uncertainty at this point, and under a worst-case scenario, you could potentially lose your entire investment.