Turbulent markets offer opportunities, big ones. Some stocks have been taken a haircut thanks to COVID-19. Some have gone bankrupt. And some, like the FANG stocks soared after the initial selloff. But which stocks will rocket higher?
Here are stocks that will quadruple or better said, “could” quadruple if they experience tailwinds.
Teladoc – Should Consumer Adopt Virtual Visits
Teladoc, a health services provider that lets patients “visit” with a doctor from the comfort of home, saw an impressive uptick in daily visits during the month of March due to the current pandemic.
This doesn’t really come as a surprise, as across the nation elective procedures were canceled, as well as in-person visits at many doctor’s offices to keep slots open for those presenting with symptoms of the novel coronavirus.
Teladoc’s recent financial reporting shows revenues of over $180 million. Total visits for the quarter rose by 92%. Prior to the virus, Teladoc expected first-quarter earnings to be around $169 million.
While Teladoc stock price has already gone on a tear, the future may be even brighter if consumer behavior adopts remote doctor visits to a much greater extent.
That future adoption likely hasn’t yet been fully figured into its stock price yet. The company has tons of room to grow and, as they continue adding new customers, revenue figures could rise rapidly.
Pinterest – If Ad Revenues Are Optimized
Pinterest appeared to die off recently, plagued by the not-necessarily-correct idea that COVID-19 would kill ad spending in the United States. But that wasn’t entirely true. In fact, Pinterest’s preliminary numbers for Q1 were a lot better that assumed.
While the novel coronavirus did slow spending in the month of March, it wasn’t nearly as bad as predicted. Pinterest’s revenues from ads were still on the rise in the second half of March.
It also appears that any slowdown that may have affected ad revenues won’t last long. The pandemic has shown signs of plateauing and, in some places in the nation, it’s even on the decline.
Plans to normalize the US economy have already begun. Ad spend is expected to recover over the next few months and years. Predictions show if ad revenues are optimized, Pinterest could enjoy top line growth of as much as 40%.
In the longer term, the ad business for Pinterest is particularly compelling – they’re rolling out plans for the monetization of its user base – over 300 million users.
This business is expected to impressively scale, in turn, causing their stocks to soar – especially when compared to today’s levels.
Store Capital – Will This Buffett Stock Bounce Back?
Trading in early May saw shares of Store Capital jump 10% for this REIT, coming on the heels of its earnings report for Q1.
The funny thing is, the report wasn’t anything special. But compared to what investors expected, it was good, and that is what matters.
Add to this that Store Capital is set to become a part of S&P MidCap 400, and it looks as though this REIT is ripe for the picking.
All that said, it is still a bit soon to tell if REITs like Store Capital – those focused only on retail assets – are all of a sudden heading for greener pastures.
Actually, with a recession looming on the horizon, if it hasn’t already arrived, Store’s not entirely out of the woods yet. It does appear that they’re holding their own so far.
The important thing is not to get hung up on what the index appears to show – overall performance is what’s important.
If you invest in dividends, keep in mind that Store and other REITs are still examining dividend policies. While Store kept its dividend payments steady in Q1, they haven’t entirely taken dividend cuts off the table.
Yes, Store Capital made the cut into Warren Buffett’s portfolio but it’s not necessarily a guarantee of future success.
Alcoa – If Inflation Returns
Aluminum has always been a hot commodity – except for when the global economy takes a hit as it has with COVID-19.
Stock in Alcoa, the 8th largest manufacturer of aluminum globally, took nearly a 70% hit post Coronavirus pandemic.
Global prices for aluminum materials crashed nearly 20% from January to May – about a $400 drop per ton.
The novel coronavirus, social distancing efforts, and other factors created a reduced demand for aluminum. From a high of $60/share in 2018, Alcoa now, at time of press, was sitting at around $8.30/share – an 88% reduction.
If these trends begin to reverse later in 2020, if COVID-19 shows signs of slowing by Q2 end, and inflation begins to rise, greater revenue should be expected to replace these current dire scenarios. And, even if Alcoa stock levels off at $6/share, this is a great investment opportunity if you’re a patient investor.
CytoDyn – If The FDA approves Leronlimab
This biotech company developed a therapeutic drug, leronlimab, that shows great promise for a variety of indications. CytoDyn, while the FDA has not formally approved leronlimab, has been granted use under what is known as eIND status, or emergency Investigational New Drug.
This status is granted when a drug (with or without FDA approval) is considered as a treatment for other indications aside from what is normally prescribed. CytoDyn was granted eIND status for the potential use of leronlimab as an emergency treatment for COVID-19 patients ineligible to participate in their current study.
The company will be conducting this 75-participant, double-blind study by the end of May.
CytoDyn’s Fast Track assignment, in conjunction with the FDA’s rolling review process for those companies with priority review status, means the FDA could make a decision on leronlimab within the next six months. Under normal review periods, new drugs can take 10 months or longer to see approval.
Stocks That Will Quadruple: Final Thoughts
So, it may seem that the industries above have taken a hit too brutal to bounce back from. But should the potential scenarios play out the way we think they might, these are five stocks you should be investing in right now.
If you can ride the waves of uncertainty, these stocks could pay off in a big way.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.