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These 5 Stocks Are Coronavirus Bargains

By Daniel B. Kline - Mar 31, 2020 at 6:35AM

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They're going to make it through, and (eventually) get back to normal.

The coronavirus has paralyzed numerous businesses, while slowing down others. Many chains have been forced to close, while others operate under heavy restrictions as people follow stay-at-home orders or social distancing guidelines.

There are a number of companies, however, that are trading well below their 52-week highs but should make their way back when normal life returns. It may take years, but these stocks belong in your long-term portfolio.

A worker in an Amazon warehouse.

Amazon has been strained by demand. Image source: Amazon.

Costco

Costco (COST 0.75%) has been one of the big winners of the current pandemic. It has seen its sales spike, and the crisis has almost certainly driven people to join -- and made existing members appreciate the chain more. That has not been enough to prop up the warehouse club's stock, however, which closed at $284.33 when markets closed on March 27, down from a 52-week high of $325.26.

Walmart

Chains that sell groceries have generally weathered the coronavirus storm well. Walmart (WMT 0.21%) has done that while also showing that its major investments in grocery delivery have paid off. That has somewhat insulated the retailer's stock, but it still close March 27 at $109.58, down from its 52-week high of $128.08.

Walt Disney

By most accounts, the pandemic has been dreadful for Walt Disney (DIS 3.98%). The company's theme parks have been closed all around the world, and its movie slate has been disrupted. Sure, forced isolation has probably driven subscribers to Disney+, but that won't make up for losses in other divisions.

The silver lining is that the company will recover. People will flock to Disney's theme parks and pay to see its films once life returns to normal. That makes its stock, which closed March 27 at $96.40 -- down from its 52-week high of $153.41 -- a major bargain if you're patient.

Target

Target (TGT 2.76%), like Walmart, has invested heavily in its supply chain. That has paid off -- the retailer has been able to offer delivery and curbside pickup nationwide. Those services will likely be in demand even after the coronavirus passes, and that will help the company recover from its March 27 close at $94.74 to get back to its 52-week high of $130.24.

Amazon

Amazon (AMZN 3.53%) has stumbled a little during the coronavirus pandemic as it's struggled to keep toilet paper and other essentials in stock. That has sent its share price to $1,900, down from its high of $2,185.95. It has recovered from those missteps, however, and has cemented its place in the lives of countless Americans, while also showing just how valuable its massive infrastructure is.

Be patient

Nobody knows when some semblance of normalcy will return. The coronavirus may pass by the summer, or it may linger into the warmer months. Nobody really knows, nor can we accurately predict the long-range damage the pandemic will do to the economy.

We can hope for a quick comeback, but we can't predict one. It may take years for these companies -- which are all still open for business in some fashion, if not thriving -- will make it all the way back. These five companies, however, have the foundational strength and long-term plans to eventually make it back.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel B. Kline owns shares of Walt Disney. The Motley Fool owns shares of and recommends Amazon and Walt Disney. The Motley Fool recommends Costco Wholesale and recommends the following options: long January 2021 $60 calls on Walt Disney, short April 2020 $135 calls on Walt Disney, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$128.58 (0.21%) $0.27
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$142.69 (3.53%) $4.86
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$112.43 (3.98%) $4.30
Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
COST
$539.82 (0.75%) $4.00
Target Corporation Stock Quote
Target Corporation
TGT
$169.67 (2.76%) $4.55

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

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