By Daniel Shvartsman
It’s been quite a week, and really quite a 3-week stretch since February 21st. A bear market is here, COVID-19 has infected thousands of people and affected markets and events around the world. There are many fundamental battles out there to be waged and steps to be taken to try to get this under control.
From the markets’ perspective, we’re all left processing how to protect our capital and how to move forward. We asked our Marketplace authors, who run services to provide ideas, guidance, and research to members, how they are doing those things. This is the third part of that series, following Thursday’s edition diagnosing the situation, and yesterday’s edition on how to control emotions and put this into historical context. Today’s edition looks ahead at when we might turn a corner on this crisis, and how to position portfolios in that event.
As a last reminder, we sent our authors nine total questions on Tuesday morning about how our authors diagnose the current situation and what their prescription is for their own portfolios. The last answers came in Thursday, and authors are listed in order of the time we received their answers. Our questions are in header font, and we’ll include author’s disclosures at the end of each roundtable.
Richard Lejeune, author of Panick High Yield Report: I think it’s very difficult to time bottoms. I recommend that Panick High Yield Report members buy high yield values incrementally with several small orders.
Cestrian Capital Research, author of The Fundamentals: Rate of increase in cases; progression of disease; volatility in the market.
ADS Analytics, author of Systematic Income: We are looking for a “whatever it takes” message on both the fiscal and monetary front as well as a bend in the curve of new cases in the developed world. We are also waiting for signs of capitulation on risky assets. We are getting closer on all fronts with central bank action, fiscal support as well as lower new cases in China plus messy market dynamics.
Andres Cardenal, CFA, author of The Data-Driven Investor: The key factor to watch is the market behavior itself. I would like to see stock prices holding on well in spite of bad news. Watching conditions in the credit markets – credit spreads, access to liquidity, etc. – is also remarkably important.
Ranjit Thomas, CFA, author of Stock Scanner: We need the number of affected people in the US to peak and then decline.
Early Retiree, author of Stability & Opportunity: I look at single businesses. I don’t have a strong opinion on the virus and don’t think it would be worth much.
Ruerd Heeg, author of Global Deep Value Stocks: I suppose it could be a vaccine. I do not expect a working vaccine before the second half of next year. But if you believe the coronavirus is just a trigger for a big downturn, then it is better to watch the stock market to bottom. After a 10-year run-up, that could take 3 years.
Long Player, author of Oil & Gas Value Research: Will wait for the market to not respond to the current news items quite so much.
Dane Bowler, author of Retirement Income Solutions: As more cases of COVID-19 are reported, the mortality rate should drop substantially. This will likely reduce the fear factor and help restore normal economic activity.
Elazar Advisors, LLC, author of Nail Tech Earnings: Are the number of new day-to-day worldwide health cases slowing.
Yuval Taylor, author of The Stock Evaluator: I don’t believe in tells.
Mark Bern, CFA, author of Friedrich Global Research: We want to see a slowdown (rather than increase) in the number of new cases in the U.S. and Europe. We also want to see the price of oil to find a bottom and stabilize. Finally, we want to see announcements that schools will reopen and event schedules getting back on track. The reverse is happening right now.
Chris Lau, author of DIY Investing: DIY subscribers are savvy in sharing technical charting, volatility, and the price of bond and gold. I am tracking consumer sentiment at a global level. For example, China is showing signs of returning back to normal and will be the first to recover. That will lead to the stability of other markets.
Richard Berger, author of Engineered Income Investing: Key support/resistance levels, value focus (as always), momentum trends at exceptionally high volume, and the VIX fear index are key metrics I monitor. Volatility driven by the instability is our friend in writing covered options and thus we hope it stays with us a long time.
Mark Hake, CFA, author of Total Yield Value Guide: It’s always time to buy during massive down days like March 9. The market never rationally prices stocks during these kinds of events. The more down days there are in succession, and the higher they are, the more you know we are at a bottom. The reason is that the market forecasts the future, and often overdoes it.
Dhierin Bechai, author of The Aerospace Forum: We are looking at COVID-19 cases, manufacturing PMIs and oil.
Damon Verial, author of Exposing Earnings: Watch volatility: If it falls, we could be seeing the formation of a short-term bottom, in which case you should take profit on your short positions and wait for another re-entry point. The market is looking for a short-term bottom. We might be in a bear market, but dip buyers always create short-term bottoms.
Integrator, author of Sustainable Growth: A declining rate in the growth of infections due to the coronavirus. Stabilization in the infection rate in China is a good start. Also less aggressive daily declines in the market indexes themselves.
Donald van Deventer, author of Corporate Bond Investor: When credit spreads begin to compress again, we’ll know that the market thinks (perhaps incorrectly) that the worst is over.
Fear & Greed Trader, author of The Savvy Investor: The technical signs will tell us more than anything now.
Fredrik Arnold, author of The Dividend Dog Catcher: When Musk, Bezos, and Branson land on Mars and start their colonies, we can all wave good bye to the disruptors.
D.M. Martins Research, author of Storm-Resistant Growth: Price action. To be clear, news regarding a potential slowdown in the spread of the virus or the successful implementation of initiatives to address the health crisis would be, fundamentally speaking, the most reliable signs of stabilization. But I believe that the markets will react in anticipation. A string of several positive days of returns in stocks, a pullback in volatility and a rise in treasury yields that suggests a bit more of a “risk on” attitude would be the very early signs of a potential recovery, in my view.
Anton Wahlman, author of Auto/Mobility Investors: 2020 will be about two things: (1) Containing, curing and otherwise coming to grips with the virus, and (2) the U.S. 2020 November election. The market has not priced in a major increase in U.S. taxation that is the hugest risk to the market in years.
Tarun Chandra, CFA, author of Prudent Healthcare: A key statistic would be the peaking of new viral cases.
Cory Cramer, author of The Cyclical Investor’s Club: I really just watch valuations of individual stocks and at least demand a shallow recession level valuation for each purchase. Hopefully, I run out of cash before we hit the bottom whenever that happens to be. But if the last two recessions are any indicator, we have about two years until we find a bottom and/or a -50% drop for the S&P 500. If we go two years, or experience a -50% decline from the peak, we are probably close to a bottom.
JD Henning, author of Value & Momentum Breakouts: The first thing I am looking for the Momentum Gauges™ to turn more positive from these strong negative values. Naturally, I will continue to look for signal validation from many key measures ranging from treasury yields, oil & gold prices, to volatility measures and any changes in the virus spread or oil production dispute. Alignment in these areas continues to be highly negative, but we will clearly see stabilizing factors across these indicators when better conditions start to emerge. Achieving stability will be most evident when the record volatility moves start to settle down. Since this strong negative signal on Feb 24th we have had 8 daily moves of larger than +/- 2% and six of them greater than +/-3%. This is nearly double the total number of +/-2% daily in all of 2019, none of which were over 3% last year.
ONeil Trader, author of Growth Stock Forum: Daily updates on the number of new cases and how the most threatened countries respond. The market will stabilize and start to rally once it becomes more evident that the worst is over.
Dividend Sensei, author of The Dividend Kings: I’m watching the daily COVID-19 cases on world of meters and Johns Hopkins tracker. I’m watching the economic data on a weekly basis to see how bad the short-term damage actually is. I’m watching the bond market as well as Jeff Miller’s 9-month recession risk indicator, to estimate how likely a short and mild 2020 recession is, as well as 2021 recession risk. I update all these things each week for our members. The cure for fear is facts, or at least the best and most reliable data we have at any given moment.
Tom Lloyd, author of Daily Index Beaters: As we have outlined in our recent 3 articles on the SPY, we know the signals to look for and to buy. You can watch our signals live on StockCharts where there is free access to our live market charts.
Jonathan Faison, author of ROTY: If there is continued M&A action in the biotech sector, as we saw with Gilead (GILD) and Forty Seven (FTSV) recently, that could show there’s continued appetite for quality assets and at least provide some cushion during these uncertain times. Likewise, if M&A action were to dry up (and stream of IPOs slows to a trickle), that could show the contrary. The latter wouldn’t be necessarily a bad thing, as there’s been too many preclinical-stage companies coming to market years before they should have (when lead assets are actually in human studies).
Bull & Bear Trading, author of Trader’s Idea Flow: By degrees the markets and global economies will acknowledge that the coronavirus is only a nasty strain of another flu virus. Because it is a new virus, the global population does not have antibodies to Covid-19 yet. Also, the coming vaccines have yet to be developed. Of course, we should expect a new flu virus to be highly virulent and also to claim more victims in its first wave across the globe. In a short period of time, maybe months, the global population will have largely acquired this new flu and then developed anti-bodies. At some point, a vaccine will be brought to market. Awareness of this accurate information along with the media reporting the sharply growing number of RECOVERIES from coronavirus will help to stabilize markets as economies will prove resilient.
Candidly, we know that both the Russians and the Saudis are both aligned with each other in fearing the rising production of the U.S. shale oil industry. With the advent of a global slowdown in economic activity due to coronavirus fears, the Russians and Saudis have staged what may be a coordinated effort to force oil prices lower. The truth is that a long-term increase in production from the free market policies of the U.S. shale industry is disastrous for both the Russians and the Saudis who are both heavily dependent upon the price of oil being kept artificially high. The U.S. may lose some production for a short time as some players may indeed be forced into bankruptcy. However, it will become clear to the Russians and Saudis that their ploy will not come close to achieving their goal of seriously diminishing the production of the U.S. shale industry.
Bret Jensen, author of The Biotech Forum: Some signs the virus is starting to be contained and a significant drop in the VIX.
Joseph L. Shaefer, author of The Investor’s Edge: New COVID-19 cases on a decelerating path. Clarity in the elections so we, those who will make this momentous decision in November, know who the two choices will be. Markets hate uncertainty more than they hate bad news,
Laura Starks, author of Econ-Based Energy Investing: An increase in demand for liquefied natural gas, especially as seen in the Asian JKM price, and increased demand numbers for oil and petroleum products.
Michael A. Gayed, CFA, author of The Lead-Lag Report: Bonds – if credit spreads narrow, I think markets will be fine. If they stay elevated, we’re in a lot of trouble.
J Mintzmyer, author of Value Investor’s Edge: Ideally, we need to see global virus numbers turning into a recovery curve like China is doing now, and it seems like Korea is starting to do. This is what we should all hope for. In the worst case, and I hope it doesn’t come to this, global policymakers and populations may have to come to terms that the economic harm of extreme preventative measures are worse than the economic pain of the virus itself. Nobody wants to ‘give up’ and I don’t think we should, but at some point, excessive containment methods could do far more harm than good, leading to the breakdown of the global economy and potentially a disintegration of society and order. If the civilized world was able to survive the 1918 Spanish Influenza, we can survive the far more muted COVID-19, but there are still some scary tail-risks and the market is certainly paying good attention to those.
Long Hill Road Capital, author of Bargain-Priced Compounders: I look at China where this all started. They seem to be gradually returning to normal. Unless something drastic changes, South Korea’s new cases per day seems to have peaked in early March. Those were two of the earliest countries to get hit. As long as countries take the threat seriously and take appropriate measures to test as many people as possible and quarantine them, the problem seems to be contained before it improves. It only took South Korea 12 days to go from more than 50 new cases per day to peak new cases per day before new cases per day began to decline. On the other hand, Italy is a disaster. They’ve now locked down the entire country. It’s critical they get that under control before their healthcare system gets over run. The fact that the U.S. has been so slow to even test for this is extremely regrettable to put it politely.
Laurentian Research, author of The Natural Resources Hub: When the financial media moves on to the next trouble and loses interest in coronavirus, the worst of the pandemic should be behind us. When coronavirus is under control in the U.S., the rest of the world is most likely in a recovery.
The Macro Teller, author of Macro Trading Factory: It’s funny that when 2020 started all we cared about was the Fed and monetary policy () whereas now, the Fed is almost meaningless. Sure, we expect rates to go down (a lot) and QE is already upon us (whether the Fed names it like this or not), but monetary policy has run out of bullets. Therefore, we’re watching the virus numbers closely, assessing the damage we expect to see when companies start reporting (Q1 and Q2 are going to look real ugly) and try to put a number to the valuation of the market where we believe it will become attractive enough to start adding risk. We’re not there yet!
Robert Honeywill, author of Analysts Corner | H2 Supergrid: I expect a lengthy period of continuing instability and that is where the opportunities lie.
Slingshot Insights, author of Become the Smart Money: Sensible policy statements from officials. Cases plateauing. Increased testing to make it clear to the public the level of mortality is not as high as the media is leading them to believe.
From Growth to Value, author of Potential Multi-Baggers: If you see images of streets that are entirely empty in places that are normally packed with people, that could be a sign that the peak fear has arrived. But this situation is unprecedented in modern times, so we can’t really know.
Joe Albano, author of Tech Cache: The slowdown in information. Too much information is a bad thing – it can cause paralysis. Once things stabilize on the virus front, we just wait for the news cycle to switch over and find the next “obsession.” Once the distraction changes, the tell just went by.
Victor Dergunov, author of Albright Investment Group: Interest rates are the most important thing to watch. Much of the correction is being driven by fear as interest rates go to record low levels. Certain sectors, such as banks, are trading horribly on the fear that interest rates will be zero for an extended period of time. When the 10-year yield is at 0.5%, it’s saying that traders are pricing in recession conditions for much of the next decade. When yields start to bounce, it will be a sign that some risk appetite is coming back.
Ian Bezek, author of Ian’s Insider Corner: The coronavirus threat needs to die down. As long as cases and death tolls continue to surge stock markets will not stabilize as the effects of the virus are destabilizing entire industries and countries around the globe. We need to see the virus go away, and we need to see countries and businesses return to business as usual. Only then can we begin to adequately assess the damage that has been done to the global economy. Additionally, we will have to watch economic indicators for stabilization to see whether or not a recession in the U.S. can be avoided. Also, Q1 earnings and Q2 guidance will be key in gauging the impact on corporate profits and future revenue/profit growth. This will be one of the most important earnings seasons in recent history as companies will give us an image to the damage that has been done, as well as a glimpse into the future.
App Economy Insights, author of App Economy Portfolio: Looking at the way the situation is evolving in China, South Korea and Italy could indicate what is coming next for the United States. But I’m not in the business of predicting where the market is headed. I leave that to those who claim they own a crystal ball. I’m a business-focused investors, holding positions for at least five years.
David Krejca, author of Global Wealth Ideation: I watch the growth rate of a number of new cases across individual countries, especially outside of China.
Elephant Analytics, author of Distressed Value Investing: I’ve been monitoring the growth in coronavirus cases in other countries. The growth and responses to the virus in Europe and Asia can foreshadow what will happen in North America. For example, the number of cases in the US are around the same as there was in Italy around 10-11 days ago. The growth rate from 100 diagnosed cases to 1,000 diagnosed cases was also similar between the US and Italy. The results in Italy may point out when we could expect peak cases here, although that would also depend on whether extreme measures (such as closing most stores) occurs in the US as well.
KCI Research Ltd., author of The Contrarian: Personally, I am watching the $VIX, and I am looking for a peak level to be reached, and then a series of lower lows and lower highs.
Rida Morwa, author of High Dividend Opportunities: The situation in China is improving. Once we get the same in the U.S. and Europe, the panic should subside.
Thomas Lott, author of Cash Flow Compounders: The VIX is an obvious one. When the market has popped 3-4% on many days recently, we advised that this mostly is a typical Bear Market rally. These tend to be quite strong, but are not a positive sign. When the VIX begins to subside, we probably will enter the Despair phase. Vol will deflate over several months as stocks drift slowly down. We also are looking for the so-called R-naught on coronavirus cases to fall well below 1.0 (meaning new infections are averaging less than one per every new case, hence the virus stops spreading).
Bram de Haas, author of Special Situation Report: I’m watching the covid-19 developments minute to minute almost. Government reactions are very important. Currently so many countries are woefully unprepared that I don’t see this stabilizing yet. When it looks like more governments are able to achieve South Korean or Singapore like results that’s very important. Efficacy of Chloroquine and Remdesivir as well as production levels are something that could make a real difference in the medium term.
Cestrian Capital Research, author of The Fundamentals: We focus on space & defense, tech and telecom and have no change to that. These are the sectors we know and understand and that knowledge helps us make sound decisions during crisis times as during calmer times.
ADS Analytics, author of Systematic Income: The one-two punch of the coronavirus supply shock and the Saudi oil gambit makes it exceedingly difficult to bottom-fish in the energy sector, particularly in pipelines. The sector has repeatedly proven itself to be nearly uninvestable for income investors and recent price action will ensure this remains unchanged.
Andres Cardenal, CFA, author of The Data-Driven Investor: Not really, I tend to be quite flexible regarding sector exposure . That said, I generally focus on high quality businesses with strong management teams and attractive growth prospects in the long term, and I tend to find those kinds of opportunities in the technology sector more frequently.
Ranjit Thomas, CFA, author of Stock Scanner: Highly leveraged companies that may be negatively affected.
Early Retiree, author of Stability & Opportunity: Investors should certainly avoid overhyped stories. These quickly come down to earth when the going gets tougher.
Ruerd Heeg, author of Global Deep Value Stocks: Momentum stocks because I expect these to go down more than the market, especially if the coronavirus is just a trigger for correcting general overvaluation. I would also avoid travel stocks, in particular operators of cruise ships.
Long Player, author of Oil & Gas Value Research: The high tech area still appears to be way overvalued. Interestingly, oil and gas takes a hit but we are still going to sell lots of cars the way the market acts. This appears to be a selective slowdown in the eyes of the market.
Dane Bowler, author of Retirement Income Solutions: Hotels are in trouble fundamentally. In addition to the oversupply and structural issues already facing the industry, travel restrictions (both self-imposed and mandated) are killing demand.
Elazar Advisors, LLC, author of Nail Tech Earnings: Pretty much everything. In my history, the longs go down more than the shorts so it’s good to shrink a portfolio. We hear consumer demand has slowed and the supply chain has locked up orders. That can cause a downcycle in tech so everybody needs to be ready if these health concerns go unresolved.
Yuval Taylor, author of The Stock Evaluator: Some of the many factors I use to pick stocks are industry momentum measures. So I’m avoiding energy, tobacco, personal products, auto manufacturers, clothing manufacturers, airlines, chemicals, entertainment, wireless communications, shipping, media, hospitality, social media, consumer finance, transportation, and banks.
Mark Bern, CFA, author of Friedrich Global Research: Absolutely! We are avoiding energy, hospitality, recreation, retail, food services and travel.
Chris Lau, author of DIY Investing: I am cautious on vacation stocks, especially cruise line and airlines. The co-author of the DIY Value investing service covers airlines so we provide subscribers with the good and bad aspects of investing there.
Richard Berger, author of Engineered Income Investing: Saudi Arabia remains in complete control of global oil prices, having the sole capacity via setting of its production levels to cause global supply gluts or shortages. Because it can do this, it has fore-knowledge of market shock prices and can trade futures and options based on what it KNOWS it is going to do. This in a stacked deck against investors and oils should be avoided. Leisure industry, cruise lines, hotels, theme parks, and mall REITs are all very vulnerable to the virus headwinds. Most are heavily debt leveraged and will have a hard time meeting debt service as customers and/or hard squeezed tenant rents fail to appear even for just a few months.
Mark Hake, CFA, author of Total Yield Value Guide: No. Where ever there is value. Especially the travel sector, the oil sector, the financial sector. Some insurance companies are now selling for less than 50% of their tangible book value and the companies pay dividends, are very profitable and are likely to remain this way.
Dhierin Bechai, author of The Aerospace Forum: I continue avoiding airline names and banking stocks.
Damon Verial, author of Exposing Earnings: We primarily use options in our trades, and so the sectors/markets/companies that investors should avoid are the same companies we are attempting to profit from on the short side. Everything is playable if you have an appropriate options strategy.
Integrator, author of Sustainable Growth: I’ve been making an active effort to avoid buying any of the historical defensives (consumer staples, telecoms), precisely because I don’t want to change what’s worked in the past or change my strategy due to an element of fear that is now more prevalent.
Donald van Deventer, author of Corporate Bond Investor: Junk bonds have never had an attractive reward to risk ratio on any of the 1,250 days of analysis that we’ve done at The Corporate Bond Investor. That reward to risk ratio is worse now than ever in the junk market.
Fear & Greed Trader, author of The Savvy Investor: Energy and companies with heavy debt loads.
Fredrik Arnold, author of The Dividend Dog Catcher: Industrials are just not able to recover from their mediocrity,
D.M. Martins Research, author of Storm-Resistant Growth: I would avoid the usual suspects: travel and leisure (particularly cruise stocks), financial institutions (particularly regional banks overly exposed to the oil and gas sector) and energy (particularly offshore drillers and pure-plays in North America onshore). These, by the way, are likely to be the same sectors that would benefit the most from a rapid recovery. But I am in the business of investing, not in gambling.
Anton Wahlman, author of Auto/Mobility Investors: I continue to believe, as I had been before the virus, that the automotive industry is doomed as long as the governments impose new CO2 regulatory costs on the market participants. There is no way around the fact that if you make a product more expensive, you will sell less and/or make less money. It’s a political death sentence to the industry, which has yet to show any sign of reversal from this destructive government policy.
Cory Cramer, author of The Cyclical Investor’s Club: Cruise ships and travel related stocks. Businesses with close ties to American shale if I don’t already own them.
JD Henning, author of Value & Momentum Breakouts: My daily breakout selection algorithms are currently not finding attractive stocks yet in transportation, tourism, travel, casino/leisure or energy stocks in this environment. I expect conditions will eventually change as I measure sentiment and fund flows across the exchanges, but for now, they remain highly unfavorable sectors by my models as the virus continues to spread.
ONeil Trader, author of Growth Stock Forum: I don’t have exposure to industries most sensitive to the coronavirus outbreak and I would avoid anything related to travel and tourism. I am aware there will be opportunities in each segment, but that’s not the way I operate.
Dividend Sensei, author of The Dividend Kings: There are certain sectors that are not a good fit for our goal of maximum safe income that grows over time, in all economic conditions. Shipping, most steel companies, automakers, coal companies, are all stocks that are not on our Master List of companies. But that’s regardless of what the economy is doing, purely for secular industry reasons. Any sector or industry in which quality companies are offering safe and growing dividends is one we’re interested in. Finance, energy, industrials, all have been hammered, and we’ve been buying aggressively. Not because we are calling a bottom. We’re not market timers. But Caterpillar (CAT) at 3.7% yield and 12.0 PE? Who cares about 2020’s results when we’re confident that earnings, cash flow and dividends will be much higher in 2025 and beyond. If the fundamentals grow over time the stock price will surely follow.
Tom Lloyd, author of Daily Index Beaters: We are very interested in participating in the bottom and quick reversal in oil prices. We are avoiding until the bottom is in place.
Bret Jensen, author of The Biotech Forum: We have been underweight commodities in the Busted IPO Forum and Insiders Forum for a long time. Given economic uncertainty and the new oil price war between Saudi Arabia and Russia, we see no reason to change that stance.
Joseph L. Shaefer, author of The Investor’s Edge: Heavily indebted companies and those that will not be able to withstand 3 months, 6 months or a year of reduced earnings.
Laura Starks, author of Econ-Based Energy Investing: I’m not a fan of heavily indebted exploration & production companies. In the last few years I have bypassed Occidental (OXY), Chesapeake (CHK), and Whiting (WLL) and will continue to steer away from them now even more.
Michael A. Gayed, CFA, author of The Lead-Lag Report: High yield – I think this will take time to flush out and default risks are only now getting properly priced in.
J Mintzmyer, author of Value Investor’s Edge: If we believe this outbreak could trigger an era of ‘social distancing,’ I’d be wary of investing in anything crowded like theme parks, movie theaters, cruise liners. If we look at 9/11 as a potential parallel for the air travel industry, then airlines could face very dire impacts long after the virus peters out. Cruise ships rely on high occupancy and solid demand, not to mention stable global economies, so I wouldn’t buy a stock like Carnival (CCL) for even a fraction of its current price. Office REITs are likely past their prime as well as we’re likely about to get a massive stress-test of the ability of folks to work from home. I suspect office real estate demand might have hit an all-time record peak and may never exceed recent levels for the rest of my lifetime. The level of offices were already a bit silly given modern tech and COVID-19 might finally push us over the edge.
Long Hill Road Capital, author of Bargain-Priced Compounders: I would avoid excessively leveraged businesses because you’re always playing with fire when you get involved with that. That’s not any different today. I need to know that no matter how bad might things get, a company can survive to see the other side. Obviously, travel-related companies and other live event type businesses are being hit very hard right now, but that wouldn’t stop me from becoming interested at the right price.
Laurentian Research, author of The Natural Resources Hub: In the natural resources sector, I avoided LNG names and base metal producers in the last few weeks because they are the most severely impacted commodities. However, as Chinese industrial activity comes alive, base metal consumption is expected to pick up. So, the window to be long base metal miners may be near. Volatility in oil names may persist until (1) the depressive effect of coronavirus on oil demand subsides and (2) a new mechanism for curtailing non-U.S. oil production is found, especially if Trump succeeds in rescuing the U.S. shale oil industry.
The Macro Teller, author of Macro Trading Factory: We focus on macro so I won’t get into specific names rather talk about sectors. We have very little exposure (almost zero) to Energy and Financials. We reduced our exposures to other aggressive/cyclical sectors (Technology, Consumer Discretionary, Industrials, Materials ex. Precious Metals). We’re underweight all these sectors right now.
Robert Honeywill, author of Analysts Corner | H2 Supergrid: I am concentrating on dividend paying companies across all sectors and sub-sectors and I intend to assess each company on its merits, its circumstances, and if there are unrecognized advantages or benefits flowing from existing and emerging crises related to COVID-19. I will avoid those that do not meet my criteria.
Slingshot Insights, author of Become the Smart Money: In my sector, I am recommending avoiding names spiking on single Press Releases relating to the virus. If the company was an “x innovator” last week and now is a ‘covid-19 solution’. Run…(to find borrow?)
From Growth to Value, author of Potential Multi-Baggers: There are many sectors I avoid, but most of them even without the coronavirus. I avoid everything that has to do with going outside of your house: restaurants, movies, cruises, of course, airlines, brick-and-mortar retail, energy, commercial REITs, etc. The reason I also avoid them without Covid-19 is that they are all so dependent on a lot of factors that you can’t control as an investor. If you want a prime example, look at what happened with the oil price over the weekend. Even if you take the best of companies in that space, there is still too much uncertainty and timing involved. And timing equals to a significant extent with luck.
Howard Jay Klein, author of The House Edge: I’m skeptical about monster media companies making too rosy assumptions about how much upside is left in the streaming services for example. I think Disney (DIS) for example, could be in for a revised valuation given how the crisis has exposed just how vulnerable its theme park business can be. Also I think their Disney + off to a strong start may not be sustainable since so much content is way past its sell date. It doesn’t matter that today’s young don’t remember Mickey Mouse. They have new icons strewn all over the place in line with today’s media creations.
Value Digger, author of Value Investor’s Stock Club: We avoid the technology stocks because of their insane valuations. We avoid the bank stocks because of generational low interest rates and exposure to highly leveraged energy stocks. We avoid the Chinese companies because we do not trust their financial reports. We avoid the travel-related companies and consumer goods companies because of Coronavirus. And actually, we have shorted many of them with 100% success to-date.
Joe Albano, author of Tech Cache: The ones who are in the direct line of fire – hotel, cruise, and airlines. They are tough to quantify right now. There’s a lot of shoot first, ask questions later happening. But once the answers come out and it can be quantified, you’ll still have a cushion of discount to get in compared to recent highs.
Victor Dergunov, author of Albright Investment Group: Avoid anything in a corona virus-affected industry with massive leverage. That includes things such as heavily indebted E&Ps and MLPs, travel stocks, cyclical stocks and the like. With the cruise liners, for example, the industry will still exist in, let’s say, 2022. But will the Carnival and Royal Caribbean stockholders still hold the claims to the assets then? There’s a good chance the bondholders will own the boats then and the stock will be reorganized. In a crisis, liquidity is the key to survival.
Ian Bezek, author of Ian’s Insider Corner: With the price of oil in shambles naturally anything with high levels of debt and having to do with shale production should be avoided. Many companies in this sector are destined to go bankrupt. However, there is discriminatory selling going on, thus certain companies will likely recover and should go much higher as the oil price eventually recovers and goes higher. The oil war will not go on forever. Nevertheless, it could take several months before prices go back above $40. It could take up to 12 months before we see the price of oil go above $50, and by then many bankruptcies are likely to occur. Financials may also get hit as bankruptcies increase in the oil sector. Additionally, financials are under pressure due to a lower rate environment, and a possible slowdown in consumer lending coupled with an uptick in consumer related defaults. However, I view smaller, regional financials as being more threatened here. The large financial institutions are likely to weather the storm without major setbacks and will probably come out as winners in the end. After all, they have the Fed ready to provide essentially limitless capital at any time. I would also avoid anything with an abnormally high valuation, peculiarly high debt, or anything else that seems unusually risky at this time regardless of the sector.
App Economy Insights, author of App Economy Portfolio: I’m narrowly focused on companies that are disrupting and leading the digital world. These businesses are likely to perform well in a stay-at-home economy and sheltered from the wild rides in energy or commodities. I’m looking at categories such as enterprise software, digital payments, social media, e-sports, gaming, tele-health, e-commerce, online education, among others. These businesses are even more likely to thrive as we connect, work and live online.
David Krejca, author of Global Wealth Ideation: I avoid most of the large corporations included in major equity indices, basically all companies which have some exposure to travel – car manufacturers, airlines, shipping and travel agencies – and companies from the energy sector.
Elephant Analytics, author of Distressed Value Investing: I am avoiding companies with stressed balance sheets and/or significant near-term debt maturities. I cover a lot of oil companies. With the combination of Coronavirus-related demand issues and supply set to increase with the lack of OPEC/Russia co-operation, being able to survive until those issues get resolved is key. There is plenty of upside for energy stocks once oil prices normalize, but companies need to escape bankruptcy in order to realize that upside.
KCI Research Ltd., author of The Contrarian: Technology stocks, as they are still the belle of the ball, yet when the aforementioned changes in the current market structure reverse, these will be sources of liquidity, and I think they will be relative underperformers for the foreseeable future, much like 2000-2007, when value significantly outperformed, with a few exceptions, of course.
Rida Morwa, author of High Dividend Opportunities: The markets are currently offering many opportunities. It is best to remain diversified across all sectors of the economy.
Thomas Lott, author of Cash Flow Compounders: We mentioned that the Ground Zero stocks are ones to avoid at all costs. From travel (airlines, hotels) to theme parks (Six Flags (SIX), Cedar Fair (FUN)) and energy to banks. Even Disney earns roughly 37% of its revenue from theme parks and cruise lines. There will be significant pain there. Boeing (BA) we have written up too as an avoid, despite it being a high margin compounder. Bad balance sheet stocks also should be avoided. Fortunately, all of our Compounders have strong credit ratings and solid liquidity profiles. We always discourage investing in poor FCF businesses.
Bram de Haas, author of Special Situation Report: I’m avoiding and shorting vulnerable balance sheets especially in combination especially if it’s a vulnerable business.
Richard Lejeune, author of Panick High Yield Report: Some of the high yield issues I like at current prices include AFFT, GSLD, DLNG.PB, NMM, JMPNZ and the NGL 2023 bonds.
Cestrian Capital Research, author of The Fundamentals: Lockheed Martin (LMT), Microsoft (MSFT) and The Trade Desk (TTD).
ADS Analytics, author of Systematic Income: Current levels are attractive on the following sectors: investment-grade rated CEF preferreds offering around a 5% yield as well as investment-grade rated BDC baby bonds at around 6% yield.
Andres Cardenal, CFA, author of The Data-Driven Investor: I have been buying shares in Livongo (LVGO), Alphabet (GOOG) (GOOGL), Twilio (TWLO), and Alibaba (BABA), among others, during the decline. If we get lower prices I am planning to increase my position in Alteryx (AYX) and in KraneShares CSI China Internet ETF (KWEB), which could be presenting a smart contrarian opportunity as China is overcoming the coronavirus crisis.
Ranjit Thomas, CFA, author of Stock Scanner: Quality technology companies with secular growth.
Lance Roberts, author of Real Investment Advice PRO: Energy. We believe Big Oil was cheap before the price of oil plummeted. Today, they are even cheaper, and some of them are now poised to buy very cheap assets as smaller companies fail.
Early Retiree, author of Stability & Opportunity: I am looking for businesses that will be affected by the virus, but will come back strongly once it’s all over. And I am trying to make sure I will personally be around when it’s all over.
Ruerd Heeg, author of Global Deep Value Stocks: The most interesting stocks will be falling knives. These are stocks with low EV/Revenue that have declined at least 60% during the last 12 months. According to statistical research, such stocks do extremely well when their lows are caused by periods of big market volatility. I rank these stocks globally based on many criteria, twice a month and also provide detailed research on them.
Long Player, author of Oil & Gas Value Research: Industry leaders and quality companies. Good strong balance sheets.
Dane Bowler, author of Retirement Income Solutions: I have been limping into triple net REITs the whole way down. The delta between the roughly 10% dividend yields of the value triple nets and the sub 1% treasuries is too great to ignore.
Elazar Advisors, LLC, author of Nail Tech Earnings: All of tech. When it’s time to buy, you should get a nice snap back in demand. That’s the easy part to figure out which ones.
Yuval Taylor, author of The Stock Evaluator: I already own almost all the stocks I want to own. But there’s one I’m planning to buy today: Points International (PCOM).
Mark Bern, CFA, author of Friedrich Global Research: We like Amazon (AMZN) will have good potential and we still like Netflix (NFLX) from a lower cost basis. But we will wait to add.
Chris Lau, author of DIY Investing: I am looking to add to existing DIY Value Investing model ideas and from the past picks. In the past pick category, look at StoneCo (STNE), DocuSign (DOCU) in the technology sector. Look at Newell (NWL), British American Tobacco (BTI), and Altria (MO) for deep value stocks that have high dividend yield. Energy stocks look beaten up, and I will alert subscribers on buying Exxon (XOM) and Royal Dutch (RDS.B). I already own enough BP plc (BP) stock.
Richard Berger, author of Engineered Income Investing: AMT, GPN, SO, ED, MSFT, WDC are just some that are all high on my list, both now and going forward. I also like SPY using the right option strategies and strike selections.
Mark Hake, CFA, author of Total Yield Value Guide: I like Expedia (EXPE). The travel company is still very much free cash flow positive. It is in the middle of a massive 20% stock buyback program which it announced in mid-December. So far, it is buying back about 5% of its stock outstanding per quarter and may have even picked up further. The stock is worth at least $115 per share, or 35% above today’s price. I also like Prudential Financial (PRU) and Principal Financial Group (PFG). Both are insurance companies that have gotten killed by the market. PRU sells for less than 50% of tangible book value, a 7.5% yield, and less than 5x earnings. Its general account has a 7-year duration which is well-matched against liabilities, according to the latest 10-K. PFG is selling well below what it is worth on a historical price-to-tangible book value basis. It’s at 6x earnings, 6% plus yield. If you believe low P/E stocks do better over time that high flyers, you might consider buying these stocks now
Dhierin Bechai, author of The Aerospace Forum: Betting on a continuation of long-term growth in air travel, I have lessors (AerCap (AER), Air Lease (AL)) on my buying lists, and there currently are REITs trading at prices offering a strong yield. I am less certain about the prospects of Airbus (EADSF) and Boeing (BA) in the near future, but also these names would benefit from a strong recovery.
Damon Verial, author of Exposing Earnings: We don’t buy-and-hold. Anything that moves is playable.
Integrator, author of Sustainable Growth: Long-term secular growth companies that are well positioned to ride out decade long trends of cloud computing, big data, ecommerce, digital platforms and digital advertising. These include names like Alteryx, MarketAxess (MKTX), and Twilio.
Donald van Deventer, author of Corporate Bond Investor: Bonds with the highest ratio of reward (credit spread) to risk (default probability). Our subscribers and the authors (with full disclosure) are making those trades now.
Fear & Greed Trader, author of The Savvy Investor: Tech, Healthcare , all of the beaten down “FANG” names , BABA, stocks like ABBV in healthcare.
Fredrik Arnold, author of The Dividend Dog Catcher: Specialty REITs.
D.M. Martins Research, author of Storm-Resistant Growth: Regarding equities, I have been scanning the market for names that have dropped unjustifiably, or for market-dominant companies whose stocks rarely go on sale. Adobe (ADBE) stands out, since the 20% drop off the peak is not consistent with what is basically a monopoly in the digital asset creation and management space at scale running a subscription-based business. Target (TGT) has also crossed my radar, since short-term headwinds don’t seem to foretell long-term troubles. I have also published on Azul (AZUL), although the risk of further decline and/or wild volatility in this case is greater.
Anton Wahlman, author of Auto/Mobility Investors: The only thing I have been buying, on a net basis, in any meaningful size since the beginning of 2019 is gold (GLD). Other than that, I am long a few names such as Amazon (AMZN), Alphabet (GOOG and GOOGL) and Facebook (FB) because they are less vulnerable to trade wars, viruses, and have strong secular growth trends anyway. Those are offset by a variety of short positions, mostly in indexes, but also Tesla (TSLA), which I believe is insanely over-valued longer-term.
Tarun Chandra, author of Prudent Healthcare: There are biotechs and small cap companies that will be considered when the market stabilizes. One should maintain a rolling list of companies, where the fundamentals have not skewed meaningfully enough, that are now becoming more attractive. Such companies can bounce back quickly when we begin to get favorable news on the viral outbreak.
Cory Cramer, author of The Cyclical Investor’s Club: I’ll buy whatever looks cheap. So far, select financial stocks are what look like the best values right now. I mentioned Berkshire Hathaway (BRK.B) as a good pick for 2020 and I stand by that even after the recent sell-off. Warren will be buying lots of Berkshire stocks if it gets much cheaper.
JD Henning, author of Value & Momentum Breakouts: Each of my different portfolios has different shopping lists ranging from high dividend breakouts, to mega-cap and small cap breakout stocks, along with oversold value stocks for long term growth. I believe there are many good ways to beat the market with very different goals and strategies. As far as anticipating what multiple discriminant analysis ((MDA)) breakout selections will emerge for high returns, it will likely be among the oversold technology stocks impacted by the virus in China. These top earning, highly profitable firms may recover quickly with large investor fund flows for tremendous returns in the coming days. I find that following my quantitative methods keeps delivering double-digit growth across the different portfolio types for momentum, value, and ETF bull/bear combo trades.
ONeil Trader, author of Growth Stock Forum: I continue to see the best risk-reward in the biotech/pharma industry, especially in light of the coronavirus. I am not looking for companies that aim to develop treatment or vaccines for the virus itself as that’s pure speculation, and I think none of the biotech companies will actually produce a vaccine or a useful treatment in time or scale to profit from it. But I do see biotech/pharma stocks as least vulnerable, at least in terms of fundamentals – the market can send them lower as it has over the last two weeks.
Dividend Sensei, author of The Dividend Kings: We have a 26-company correction watchlist, which includes all the companies I bought or had limits on during this correction. We also have our Top Weekly Buy list where each of the Kings lists their highest conviction ideas (at the right price of course). Our Master List includes specialty lists for all the aristocrats, kings, Super SWANs, safe midstream stocks, safe monthly paying dividends stocks and all our portfolio companies. With a Master List of 415 companies and counting, we have been showered with opportunities. Anything from deep value stocks ([[MDP]] at 3.0 PE, [[VIAC]] at 3.7 PE and [[UNM]] at 3.5 PE) to aristocrats/Super SWANs like [[CAT]] at 12.0 PE, [[TROW]] at 11.9 PE, [[LOW]] at 18.9 PE, and [[PII]] at 11.9 PE. We helped out members buy Broadcom (AVGO) at a yield of 5.3% and sub 11 PE. We also bought MPLX (MPLX) at safe 20.2% yield, Energy Transfer (ET) at 17.8% yield and Enterprise Products Partners (EPD) at 11.8%. Those are just some of our biggest hits during this correction.
Tom Lloyd, author of Daily Index Beaters: Nvidia (NVDA), Apple (AAPL), Microsoft, Alphabet, JPMorgan (JPM), Adobe.
Jonathan Faison, author of ROTY: Companies where there is clearly promising POC (proof of concept) data in indications of high unmet need, those with platform technologies able to address a variety of indications, gene therapy, rare disease and ¨picks and shovels¨ plays are some of our favorites. Trillium Therapeutics (TRIL) is an example of one with several factors in our favor (only CD47 asset with significant monotherapy activity even at low doses, key institutional investors coming on board, new management making the right moves to instigate a turnaround, M&A appetite in the space evident as reflected in GILD-FTSV buyout, etc).
Bull & Bear Trading, author of Trader’s Idea Flow: Trader’s Idea Flow bought the overall market with a 3X leveraged S&P 500 index ETF twice in the past week with our most recent purchase today on Tuesday 3/10/20.
Bret Jensen, author of The Biotech Forum: Some small biotech stocks that have dropped on no new company specific news here are interesting here. They are becoming more and more a focus of our ‘option play of the week’ feature. As our several small and midcaps that have dropped substantially along with the market and are seeing substantial insider buying.
Joseph L. Shaefer, author of The Investor’s Edge: Those most down for transitory reasons. Oil & gas firms are down because OPEC+1 could not agree to cut production. Question: does that mean if Russia blinks because their usual buyers are now buying elsewhere that these oil & gas companies will rise? I don’t predict that will happen; it would just be icing on the cake. We are buying survivors who have seen worse before and come back stronger, like Chevron (CVX), Exxon Mobil (XOM) and France’s TOTAL (TOT).
Laura Starks, author of Econ-Based Energy Investing: Various highly-discounted E&P companies like Diamondback Energy (FANG), multinationals like Chevron, and The Williams Companies (WMB) for its high dividend. Partnerships have great yields, though I always like them less during the (current) tax preparation season. Among partnerships, I especially like Enterprise Products.
Michael A. Gayed, CFA, author of The Lead-Lag Report: Emerging markets, Financials, and commodities. Basically, anything related to an oversold bounce in reflation trades that might benefit from fiscal and monetary overreactions in policy.
J Mintzmyer, author of Value Investor’s Edge: I believe that the best opportunities thus far are in niche maritime shipping and energy infrastructure sectors; however, both of these sectors are also extremely dangerous without the right research and stock selection. If markets continue to crash across the board, then we might also see some clear dislocations in retail and restaurants, but I’d be most interested in asset-light firms with low-leverage.
Long Hill Road Capital, author of Bargain-Priced Compounders: I’ve been buying aggressively and I’m now fully invested. I recently bought a lot more Berkshire Hathaway Class B shares below $200 per share. That’s 1.1x year-end book value, which is extremely cheap for this company. First, the business is extraordinarily diversified with subsidiaries in insurance, manufacturing, service, retail, energy, railroads, and more. Second, it owns stakes in several high-quality publicly-traded businesses. Third, and perhaps most importantly, Berkshire has $128 billion of cash on hand, most of which he is ready and eager to put to work. That’s 27% of the market cap right now. This is an ideal environment for Buffett to deploy that capital, and hopefully we’ll hear about some significant investments he’d made for Berkshire soon. The more he deploys, the more book value growth should accelerate.
I’ve also bought additional shares of Facebook, Spotify (SPOT), and Amazon in the last few days. Facebook is an incredible business with enormous growth opportunities that’s trading at about 16x earnings, which is very attractive for a company of this quality and growth. But even more importantly, those earnings are extremely depressed at the moment, so I consider it even cheaper than that. Spotify is not only likely to have several hundred million users, if not a billion, one day, but its future profitability is being underestimated. Specifically, I think its podcasting efforts are likely to drive very high-margin advertising revenue to the company, which could surprise people. And Amazon is a long-term holding of mine that is just extremely cheap right now. They are well-positioned for the current issues we face. The more people stay home, the more likely they order what they need online. But the big reason I’m a shareholder is their culture of relentless innovation. They’re now starting to license their Amazon GO “just walk out” technology to other retailers. I’m continuously blown away by this company.
Laurentian Research, author of The Natural Resources Hub: I like to pick up high-quality names in the aftermath of a crisis. I reiterate my liking of high-quality businesses such as GeoPark (GPRK), Africa Oil (AOIFF), Lion One Metals (LOMLF), and Gen Mining (GENMF), which have been sold off severely. I am closely monitoring both the underlying commodities and idiosyncratic catalysts to identify the best entry and exit points for The Natural Resources Hub community.
The Macro Teller, author of Macro Trading Factory: Gold (right now), Defensive/non-cyclical sectors, when their valuations also get down to earth. We avoid Financials like a plague now, to the extent that we rather buy Energy at current valuations before we would buy banks. Just as it seems like the stars align perfectly for gold, it seems like complete dark skies (with no starts at all) when it comes to banks specifically and lenders in general.
Robert Honeywill, author of Analysts Corner | H2 Supergrid: Identification of those companies that I expect to stage a full recovery, and return to normal operations, whenever this crisis is substantially over.
Slingshot Insights, author of Become the Smart Money: High quality life science names that are beat up by the market move, but have no fundamental changes to their story/assets. Is this really pandemic going to impact the value of a break through cancer or cardiovascular treatment in 3-5 years?
From Growth to Value, author of Potential Multi-Baggers: I have had Shopify (SHOP) in the Potential Multibaggers since May 2017 at $77, but I sold 80% of my stake last year because I thought it was severely overvalued. I look at this sell-off with a lot of enthusiasm and hunger. The same goes for Okta (OKTA). I added it at $64 in the Potential Multibaggers, but I sold 80% of my stake because the price was too stretched. I’d be happy to add to both if they continue to go down. The Trade Desk (TTD) is already my biggest position, but I have already added a bit in the last few days. Square also starts to look attractive again. The company is firing on all cylinders with Cash App and compared to its growth, and it seems rather cheap now. And if MercadoLibre (MELI) would come back to earth from where it was, I’d start a position.
Howard Jay Klein, author of The House Edge: I’m guiding hold on Las Vegas Sands but were I ready to buy I’d go heavy on the stock. Too many post virus catalysts.
Joe Albano, author of Tech Cache: Semiconductors. There’s a lot of “behind the scenes” action blurred by the narrative showing the upcycle hasn’t been affected. Supply is at the slowest growth it has been in quite a while. If there’s little on the market in terms of bits and there’s still a need for cloud-based work (hint: there is), then it would take a deep cut in global business for demand to run below supply again. In other words, pricing is climbing – it’s the thing producers have the least control over – and with pricing rising and estimates still moving higher, when low workforce numbers do not bottleneck OEMs, producers will be the king of the hill.
Ian Bezek, author of Ian’s Insider Corner: Companies that benefit from the rapid growth of travel and the global middle class. Think things that sell in large quantity at duty-free airport shops. That’s everything from premium liquors (Diageo (DEO), Remy Cointreau (REMYF)) to cosmetics (Estee Lauder (EL)) and the like. Also, the airport operators themselves are a far better bet than the airlines. Strong balance sheet companies such as Mexico’s Sureste (Cancun, San Juan PR, Medellin Colombia airports) (ASR) may lose a quarter or two of profits due to the virus. But deep clean the airports once the virus has passed and nothing has changed fundamentally. That’s not even remotely comparable to an airline, which has tens of thousands of union employees and billions in aircraft leases. The airline can go bust in a matter of weeks when revenues dry up, just look at the aftermath of 9/11. In a crisis like this, you want to buy assets that don’t have wipeout risk.
Victor Dergunov, author of Albright Investment Group: I am long just about everything I want to be long right now, but if given an opportunity at the right price I would add to or go long Alibaba, (BABA), Baidu (BIDU), Microsoft (MSFT), Tesla (TSLA), Netflix (NFLX), Alphabet (GOOG) (GOOGL), Axon (AAXN), Facebook (FB), Goldman Sachs (GS), JPMorgan (JPM), Visa (V), Gold Miners ETFs (GDX), (GDXJ), Silver Trust ETF (SLV), Newmont Goldcorp (NEM), Kirkland Lake Gold (KL), and several other names.
App Economy Insights, author of App Economy Portfolio: I have recently added to positions in companies of the App Economy that just had huge draw-downs. They have many traits in common. They are usually relatively small (under $10 billion market cap), have an outstanding culture and leadership, with founder-operator at the helm. That includes companies like Roku (ROKU), Elastic (ESTC) and more recently Stitch Fix (SFIX) to which I added after the significant post-earnings sell-off.
David Krejca, author of Global Wealth Ideation: Precious metal producers, established mining companies (e.g. Newmont Corporation, Polymetal International (POYYF) or Pan American Silver Corp. (PAAS)) and high quality names. Interesting might be also shares of Chinese companies – A-shares and H-shares – as the situation in mainland China seems to be getting substantially better every day.
Elephant Analytics, author of Distressed Value Investing: Pioneer Natural Resources (PXD) is an energy company that I am looking at due to its ability to handle low near-term oil prices. It has only a modest amount of debt and can go with a maintenance capex budget to avoid cash burn at around $37 WTI oil for March to December. The energy sector is particularly beaten down right now, and appears to be pricing in low oil prices (such as $40 oil) indefinitely, while there is a lot more long-term upside that can benefit companies that survive the current environment.
Stanford Chemist, author of CEF/ETF Income Laboratory: We are currently looking more closely at fixed income CEFs where the NAVs have been relatively stable amidst the market selloff. With rates this low, these funds will have strong appeal once the coronavirus induced panic is over. Our portfolios and favorite picks are restricted to the members area of CEF/ETF Income Laboratory.
KCI Research Ltd., author of The Contrarian: The most loathed sector, energy, offers the best opportunity, in my opinion. Specifically, natural gas equities, including Antero Resources (AR), and Range Resources (RRC), which are both top-ten domestic dry natural gas producers, with Antero producing roughly the same amount of dry natural gas as Exxon Mobil, are incredible bargains. Why? Lower oil prices are destroying the primary bearish these against these natural gas equities, which is that associated gas production from oil drilling would permanently depress dry natural gas prices.
Rida Morwa, author of High Dividend Opportunities: Quality high dividend stocks. Averaging down can boost your future income significantly. Two good examples are GEO Group (GEO) and Imperial Brands (IMBBY).
Thomas Lott, author of Cash Flow Compounders: We have about 50 names we like already in our Compounders’ spreadsheet with attractive entry points today. From Starbucks (SBUX) to Discover Financial (DFS) to Google which now trades at an average market multiple, there are absolutely a ton of bargains to be had. It is early, but these are solid balance sheet, best in class companies across the board.
Bram de Haas, author of Special Situation Report: I’m interested in buying strong balance sheets that are not seeing their (long term) earnings power impaired. Think of Scully Royalty (SRL), Clarkson PLC (CKNHF), or Texas Pacific Land Trust (TPL).
Thank you for reading this roundtable, and to our authors for participating in it! You can look up more of their work at the links provided higher up in the article.
What are you watching for as far as signs of stability, and what’s on your prospective shopping list? Let us know below. And whatever you do, stay safe out there!
See also Three Very Rare Income Buys on seekingalpha.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.