The following first appeared on Kiplinger’s as The 20 Best Stocks to Buy Now
The coronavirus crisis will end. I don’t know when, and you don’t know when. But it will end. We won’t live under lockdown conditions forever.
By this stage of the game, you should have already made the defensive moves you were going to make. The market may very well have another leg down. It’s far too early to say we’re out of the woods given that most of America is under quarantine and we have yet to see what first-quarter earnings and second-quarter guidance looks like. But it’s a bit late in the game to be thinking about defense. That’s closing the barn door after the horse has already bolted. Now is the time to start planning for the next bull market.
Even professional bears are seeing the light at the end of the tunnel. “I’m selectively buying in my personal accounts,” says John Del Vecchio, co-manager of the AdvisorShares Ranger Equity Bear ETF (HDGE). “There were plenty of companies that went into this crisis on life support, kept alive by cheap debt. You’re going to see a lot of these companies fail. But at the same time, a lot of high-quality blue chips are on sale right now at prices we may never see again in our lifetimes.”
Not every company gets out of this unscathed. It may take years for airlines to return to pre-crisis passenger numbers, and they may go through bankruptcy or a government conservatorship in the meantime. Likewise, retailers and restaurants might be dealing with the fallout from lockdowns for months or years, as will their banks and landlords.
But there are plenty of companies that have been only minimally affected by this crisis and may actually benefit from it by picking up market share. Many of these stocks are in the tech space, but certainly not all. Plenty are in the gritty, old-fashioned real economy.
Today, we’ll take a look at 20 of the best positioned for a post-coronavirus world.
Like Amazon, Walmart (WMT) has been knocking the cover off the ball throughout this crisis. While most retailers have been forced to close their doors, Walmart has reportedly seen its sales jump by 20% over the past month.
Americans on lockdown are eating more at home, which helps Walmart’s grocery business. But electronics, toys, cleaning supplies and just about everything else Walmart sells is also in high demand these days.
Much of this is a one-off windfall that won’t be repeated. You can only stockpile so much bleach and toilet paper. But Walmart stands to benefit for years or even decades after the lockdowns are lifted.
It comes down to the “retail apocalypse” we’ve been hearing about for years. It’s well established that America has vastly more store square footage per capita than any other country in the world, roughly five times the amount of store square footage per capita as the United Kingdom and six times that of France. And a lot of that square footage is occupied by weaker retailers that have been limping along for years, kept alive by cheap credit.
Some of these retailers won’t survive this recession or, at the very least, will need to consolidate and reduce store count. And their loss will be Walmart’s gain. It’s during a recession when, in true Darwinian natural selection, the fittest survive. And other than perhaps Amazon, no retailer has proven to be fitter than Walmart.
To read the remainder of the article, please see The 20 Best Stocks to Buy Now.
Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog.
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