Stocks to Purchase and Stocks to Avoid for April 2020
Eugene Guo | Updated April 5th 2020
As the Corona Virus has swept the global economy, the short term future of the stock market may seem extremely uncertain and unpredictable. We are here to guide your investment plan through this dodgy time and offer suggestions on stocks to purchase and to avoid.
Alibaba - Alibaba has already proven it’s strong hold on the Chinese e-commerce market through it’s stock growth in 2019. Considering Alibaba’s future plans in the favorable market place in China and the already slowly recovering Chinese marketplace from the Coronavirus pandemic, Alibaba share prices are most likely going to rise. This and the temporary dip of stock prices caused by the disruption of the Coronavirus Pandemic gives investors a great opportunity to invest in a promising stock for a lowered price.
UnitedHealth - UnitedHealth stocks are rather low risk and you can expect their stock prices to remain relatively stable even throughout this pandemic when most other stock prices are fluctuating significantly. UnitedHealth stock prices have been steadily increasing for most of the past 5 years and you can expect them to do so while generating a steady source of dividend to shareholders. One thing that does have to be noted for this stock is that it’s a stable long term investment and is unlikely to bring great profits off a short term.
Marriott - As the COVID-19 pandemic brings Marriott stocks close to its 52 week low of 46.56, Marriott stocks have become a brilliant long term investment. Despite the tolls and financial losses the hotel industry is going to face through this pandemic, we are confident that companies such as Marriott (MAR) and Hilton (HLT) are going to be here to stay. As there is still some room for Marriott stock to fall, the end of April would be a perfect time to go into a long term investment in the hotel industry and the value of these stocks would significantly increase as the economy rebounds after the pandemic.
Zoom - Many investors have been getting in on zoom, an understandable action as zoom has increased it’s user-base dramatically during this pandemic from just 10 million active users a day last December to 200 million active users per day as of March of 2020 (CNBC). However, many are neglecting the fact that most of these new active users are using zoom as a free platform to connect with friends and co-workers and zoom is not generating any revenue from these “temporary users'' amidst this COVID-19 crisis. Because of the momentum gathered by the pandemic, Zoom’s stock has reached a ridiculous high reaching a PE ratio of 1499.42. This indicates that the stock is eventually going to crash sooner or later.
3M - As the Coronavirus becomes more and more prevalent around the world and fears for the virus rise, many look at 3M, one of the main personal safety equipment and face mask providers. However, despite this causing an exponential surge in face masks sales and revenue for 3M, the future for 3M still does not look pretty and stock prices are likely to continue on the downward trend. 3M’s face mask sales increased from around 100-150 million without the coronavirus to 600 million dollars this year, however, this makes up for less than 2% of 3M’s expected revenue. On top of the company continuously facing issues in the long term causing it’s stocks to steadily fall for the last 5 years, 3M’s main business market, Asia, has it’s economy devastated by the COVID-19 pandemic. Things to take away from this is that 3M is not like some would assume, a beneficiary of the virus, but instead a company whom’s struggle is worsened by it.
Edited by Koki Mashita
Written for Lallic Partners