The second wave of the deadly coronavirus is slowly gripping the United States. On Wednesday, the nation recorded over 100,000 COVID-19 cases in a single day, a new record. Maine, Indiana, Minnesota, Nebraska, and Colorado are the worst impacted states. The rise in death toll by 21% across the country is even more disturbing. Experts say that as winter is approaching, there is dual risk from the pandemic as well as the virulent flu.
At this juncture, investors need to take a hard look at their portfolio. To maximize gains, they must pick stocks which have the ability to capitalize on the looming crisis. The businesses of these stocks should be in a position to flourish as the intensity of COVID-19 increases. Companies which can identify opportunities in the crisis and position themselves for gains will survive in the long run.
As the pandemic rolls on, we will need a high quality and agile healthcare system. Moreover, as we spend more time indoors, the companies that make life simpler for us through offerings will also be in demand. Evidently, the companies primarily involved in vaccine development and virtual healthcare will be some of the biggest beneficiaries. Similarly, technology companies that enable a seamless remote working environment have gained immensely during this phase and should continue to do so.
Johnson & Johnson (JNJ), Zoom Video Communications, Inc. (ZM), Teladoc Health, Inc. (TDOC), and Quidel Corporation (QDEL) are four such companies that are poised to soar further as the COVID-19 crisis deepens.
Johnson & Johnson (JNJ)
JNJ is known for its consumer products such as baby care, women’s health, and wound-care. However, it has a major presence in the pharmaceutical and the medical devices segments as well. JNJ’s pharmaceutical segment focusses on immunology, pulmonary hypertension, neuroscience, infectious diseases, oncology, and cardiovascular diseases. Meanwhile, the company’s medical segment deals with surgical, orthopedic, cardiovascular, diabetes care, and ophthalmic requirements.
Earlier this month, JNJ entered into a preliminary agreement with South African pharmaceutical giant, Aspen Pharmacare Holdings, to manufacture 300 million doses/year of the COVID-19 vaccine candidate, Ad26.COV2-S, commercially. The objective behind this association is to distribute the vaccine in the South African continent, which has limited manufacturing capacity.
JNJ rebounded in the third quarter that ended September 2020. The company’s revenue for the quarter climbed 1.7% to $21 billion. The consumer products segment saw a recovery in revenue, but the medical devices segment declined 3.6%. Notably, JNJ’s pharmaceutical segment could withstand the adverse market condition, driven by the robust momentum of its blockbuster drugs, Darzalex, Stelara, Zytiga, and Imbruvica. JNJ’s EPS for the third quarter surged 101.5% year-over-year to $1.33.
The street estimates JNJ’s fourth-quarter revenue to be $21.7 billion, indicating a 4.7% rise year-over-year. Meanwhile, EPS for the quarter is likely to drop 2.7% to $1.83. Over the past year, JNJ gained 7% to close yesterday’s session at $139.76.
How does JNJ stack up for the POWR Ratings?
B for Buy & Hold Grade
A for Peer Grade
B for Industry Rank
B for Overall POWR Rating
The stock is also ranked #6 out of 240 stocks in the Medical – Pharmaceuticals industry.
Zoom Video Communications, Inc. (ZM)
ZM is one of the leading unified communication platforms. It offers video and online chat services, enabled by a cloud-based peer-to-peer software platform. Some of the other services include telecommuting, social chats, online education, and webinars. Over $100,000 of ZM’s trailing 12-month revenue is contributed by more than 900 customers. The company has become the most preferred platform for people working and studying remotely in this pandemic. Soon, the company intends to enter the online event hosting segment.
According to a recent development, German telecom giant, Deutsche Telekom, entered into a sales partnership with ZM. This implies that the market share of ZM will expand into Germany as more users are likely to sign up for the videoconferencing services through the nation’s leading telecom operator.
During the second quarter that ended June 2020, ZM’s total revenue jumped 355% year-over-year to $663.5 million. EPS for the quarter tripled to $0.63. At the end of the second quarter, the company had nearly 370,200 customers, indicating a growth of 458% from the year-ago period.
ZM’s third-quarter revenue is expected to be $639.35 million, indicating a 316.2% increase year-over-year. Meanwhile, the street estimates EPS for the quarter to surge 744.4% to $0.76. ZM expects its revenue for the third quarter that ended September to be in the range of $685.0 million to $690.0 million.
On a year-to-date basis, ZM rallied 630% to close yesterday’s session at $496.73. During the past six months, ZM has soared 243%. A second wave of COVID-19 is likely to push people to stay indoors. As a result, there will be increased dependence on ZM for remote working and online education.
ZM’s POWR Ratings reflect its promising outlook. It has an overall rating of “Buy” with a “B” in Trade Grade and Peer Grade. The stock is also ranked #5 out of 54 stocks in the Technology – Services industry.
Teladoc Health, Inc. (TDOC)
TDOC is a leading provider of telehealthcare. The company offers its services through technology platforms like mobile devices, internet, phone, laptop, etc. This virtual healthcare company deals with a wide array of medical conditions like episodic flu and chronic infections to complex diseases like cancer and congestive heart failure. TDOC also includes AI and analytics to its medical offerings. Since the beginning of this year, TDOC has logged in three million extra enabled visits for its health system clients.
On October 30th, TDOC completed its merger with Livongo (LVGO), a renowned Applied Health Signals company. According to experts, this collaboration would transform the company’s position as the topmost customer-centric healthcare company in the world. CEO of TDOC, Jason Gorevic, said, “Together, our team will achieve the full promise of whole-person virtual care, leveraging our combined applied analytics, expert guidance and connected technology to deliver, enable and empower better health outcomes.”.
The company’s revenue for the third quarter that ended September 2020, soared 109% year-over-year to $288.8 million. Total visits to its platform also jumped 206% to 2.8 million for the quarter. However, TDOC’s loss per share widened to $0.43 from $0.28 posted in the same period last year.
Analysts estimate the revenue for the fourth quarter ending December to be $306.3 million, indicating a 95.7% increase year-over-year. The loss per share is expected to narrow to $0.38 for the fourth quarter. The company also boosted its guidance for full year revenue to $546-$550 million, from the previous forecast of $538-$545 million. TDOC expects to directly deliver over 10 million virtual visits in 2020.
TDOC rallied 137.4% on a year-to-date basis to end yesterday’s session at $208.51, driven by rising demand for virtual healthcare services amid the pandemic. The stock surged 14% over the past six months.
Under our POWR Ratings system, TDOC has been accorded a “B” grade in Trade Grade, and Industry Rank. Among the 70 stocks in the Medical – Services industry, it’s ranked #26.
Quidel Corporation (QDEL)
QDEL is a leading developer, manufacturer, and seller of diagnostic testing solutions for various diseases such as cardiology, thyroid, eye health, gastrointestinal, and toxicology. QDEL also focuses on women’s and general healthcare. Two fluorescent immunoassay systems offered by the company are Sofia and Sofia 2. AdenoPlus, another brand manufactured by QDEL, includes point-of-care products for detecting infectious and inflammatory diseases as well as eye conditions.
QDEL has developed the first FDA-authorized ‘ABC’ rapid antigen test which can detect and differentiate between Influenza A + B and COVID-19 through a single nasal swab in just 15 minutes.
During the third quarter that ended September 2020, QDEL’s revenue surged 276% year-over-year to $476.1 million, led by the growth in Rapid Immunoassay and Molecular Diagnostic Solutions. Nearly 80% of the sales were contributed by COVID-19 products. QDEL’s newly launched Sofia® SARS Antigen and Lyra® SARS-CoV-2 tests saw huge demand. The company’s EPS for the third quarter climbed 725.7% to $5.33.
Analysts expect revenue for the fourth quarter ending December to be $757.9 million, indicating an increase of 398.1% year-over-year. Meanwhile, the EPS is expected to surge 819% to $9.19.
On a year-to-date basis, QDEL has rallied 257.6% to close yesterday’s session at $281.80. Over the past six months, the stock has soared 93%. The company’s increased focus on developing rapid testing kits for COVID-19 has led its stock to skyrocket this year.
It’s no surprise that QDEL is rated a “Buy” in our POWR Ratings system. It also has an “A” for Trade Grade, and a “B” for Buy & Hold Grade, Peer Grade, and Industry Rank. In the 58-stock Medical-Diagnostics/Research industry, it is ranked #10.
Want More Great Investing Ideas?
Stocks Face SOARING Risk in November?
7 Best ETFs for the NEXT Bull Market
5 WINNING Stocks Chart Patterns
JNJ shares were trading at $142.49 per share on Friday afternoon, up $2.73 (+1.95%). Year-to-date, JNJ has declined -0.35%, versus a 10.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Namrata Sen Chanda
Namrata is an accomplished financial journalist, with nearly a decade of experience. She specializes in interpreting news releases and framing investment strategies, and has worked with some of the leading companies in real estate, banking, insurance, mutual funds, financial research, fintech, and investment education. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|JNJ||Get Rating||Get Rating||Get Rating|
|ZM||Get Rating||Get Rating||Get Rating|
|TDOC||Get Rating||Get Rating||Get Rating|
|QDEL||Get Rating||Get Rating||Get Rating|