As the world scrambles to navigate the “new normal” as a result of the coronavirus outbreak, financial markets, in particular, have been dealt a hefty blow.
With a favourable return in 2019, this year has knocked the S&P 500 down more than 25 percent. Despite this, some stocks that have managed small gains in the face of the coronavirus crisis. This proves that the market being down does not mean that all stocks are suffering.
Let’s take a look at five of our favourite best-performing stocks in the S&P for now.
1. Regeneron Pharmaceuticals
Sitting strong with a current 30 percent gain, Regeneron Pharmaceuticals, who work within the biotech industry, have the best stock in 2020 so far. This success is most likely due to the fact that the company is one of the frontrunners with the potential to develop a coronavirus vaccine.
Coming in off very strong fourth-quarter numbers, Regeneron was helped along by a dip in performance from their main competitor Novartis due to a side effect of potential vision loss from one of their treatments.
The primary reason for the improvement in their stock, however, is the potential coronavirus treatment. This should be taken with some reserve as we are unaware of how long coronavirus hype will keep the company’s stock at record highs.
2. Clorox (CLX)
It will likely come as no surprise that a company that sells hand sanitizers, disinfectant wipes, and various other cleaning products is seeing a significant rise at the moment, 24 percent in the S&P 500, to be exact.
Clorox, which primarily sells all of those in-demand items, has seen its stock rise 14 percent year-to-date, coming off a 26 percent decline. Now, while we can expect the sales of these products to go back down to somewhat rational numbers, eventually, coronavirus fears will likely keep sales high for a few more quarters. It is also safe to assume that the new world we live in post-virus will probably see hand sanitizers and disinfectant wipes purchased in a little more abundance than they were before.
3. Johnson & Johnson
The U.S. News & World Report listed Johnson & Johnson as one of its picks for best blue-chip stocks for 2020 as the usually well-performing stock has enough relevant diversified business to weather the COVID storm. The company is known for consumer goods, but also has lines in pharmaceuticals and medical devices, making it a pandemic cash cow.
Johnson & Johnson have also announced itself as a vaccine candidate for the virus with phase 1 clinical trials starting in September with possible vaccine emergency uses (if successful) in January 2021.
It makes sense that a Chinese e-commerce giant would be an S&P 500 pick considering the fact that China looks to be one of the first countries that will recover from the effects of COVID-19.
Much like the success of it’s U.S. equivalent, Amazon, Alibaba is tailored to quarantined Chinese citizens looking to make purchases.
Naturally, we need to list Amazon, which is still performing well despite the current market turmoil. While not near its 2,186.05 buy point, Amazon is running strong, outperforming the broader S&P 500.
The company’s earnings are not quite as impressive as usual, slipping lately by an average 5 percent, but it is coming off a 7 percent rise in Q4, thanks in part to its cloud-computing business, Amazon Web Services.
While in lockdown, U.S. customers are making the most of Amazon Prime’s free one-day and same-day delivery, which is likely to continue during the coronavirus crisis, especially as physical retailers are inaccessible.
Buying stock in uncertain times
While the above information is the current state-of-play, it needs to be taken somewhat with a grain of salt as we experience undoubtedly one of the most turbulent times in the last forty years. The virus seems to be calming down in China and South Korea, but getting worse in the U.S. so those investors working with the coronavirus crisis in mind will be dealing with choppy waters for all shares come mid-2020.