Are These The Epicenter Stocks You Should Be Paying Attention To?
Epicenter stocks are stocks that were most harmed by the coronavirus pandemic. With both Pfizer’s (PFE Stock Report) and Moderna’s (MRNA Stock Report) crucial phase 3 clinical trials showing positive results, these epicenter stocks could be on the rebound. Pfizer and Moderna had reported efficacy rates of 90% and 95% respectively. This surpasses the efficacy threshold of 50% that is set by the Food and Drug Administration (FDA) for approval of a vaccine for emergency authorization.
With Pfizer expecting to roll out its vaccine doses by Christmas, the coronavirus pandemic could soon be a thing of the past. Epicenter stocks like ExxonMobil (XOM Stock Report) from the energy sector and Carnival Corporation (CCL Stock Report) from the cruise industry are already gaining momentum from Pfizer’s vaccine announcement last week. With Moderna’s announcement today, could this be the opportunity to look into epicenter stocks?
In the last few months, many of these top epicenter stocks to watch were on the brink of bankruptcy. Lockdowns and work from home restrictions meant fewer people were using fuel for traveling. Cruises and cinemas had become hotspots for the coronavirus to spread, so they had to be closed. However, epicenter stocks could also be the fastest to recover when we do get the vaccine out to the masses. With that in mind, here are the top 3 epicenter stocks to watch out for this week.
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Epicenter Stocks To Buy [Or Sell] This Week: Delta Air Lines
Delta Air Lines (DAL Stock Report) has had a rough patch since the economy crashed in March. Delta is the second-largest airline in the world and is a legacy carrier. When such an insidious virus could spread undetected in close and confined places, there was not much of an option for this epicenter stock. Before the pandemic, Delta had offered more than 5,400 flights to 325 destinations across six continents.
The company has a share price of $38.16 as of 10:36 a.m. ET and has a market cap of $24.32 billion. Delta shares have been up by 5% since the announcement of Pfizer’s vaccine candidate last week. Other epicenter stocks are also following this trend as a vaccine would signal the reopening of the economy. Will things start to look brighter for Delta from now on?
In the company’s latest quarter fiscal posted in October, the company had reported a revenue of $2.6 billion. This represented a 79% decline compared to a year earlier. In terms of the company’s liquidity, Delta has an enormous reserve of $21.6 billion of cash on hand. The company has also shown prudence in managing its cash burn. In its latest quarter, the company averaged a cash burn of $24 million per day. In September however, that figure improved by 25%. By managing its cash burn, the company will be able to weather through the pandemic. With that in mind, will you consider adding DAL stock into your portfolio?
Epicenter Stocks To Buy [Or Sell] This Week: The Boeing Company
Boeing (BA Stock Report) is another epicenter stock that was on the brink of collapse in March. The aerospace company is the largest in the world and is a leading manufacturer for commercial jetliners, defense, space, and security systems. Airlines all over the world use Boeing’s commercial jet airliners. As Moderna’s vaccine could make open borders a reality, Boeing is set to regain its momentum.
The company has been up by 9% since last week’s announcement from Pfizer and could further rally upon Moderna’s vaccine success being announced today. In the company’s third-quarter fiscal posted in September, Boeing had reported a revenue of $14.1 billion. The pandemic and the grounding of Boeing’s 737 MAX fleet had impacted the company’s financial results. The company had suffered setbacks from its 737 MAX fleet, which killed 346 people in 2 crashes. To overcome this, Boeing has engaged in rigorous certification and validation flights conducted by the U.S. Federal Aviation Administration and European Union Aviation Safety Agency.
To adapt to the market impacts of the pandemic, Boeing has continued its business transformation across five key areas. By proactively managing liquidity, the company is able to pull through the pandemic as the hope for a vaccine is around the corner. The vaccine development is no doubt uplifting news for airlines and their suppliers, so investors should be excited. All things considered, are BA stock on your watchlist?
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Epicenter Stocks To Buy [Or Avoid] This Week: General Electric Company
As global demands fell, General Electric (GE Stock Report) took a beating as well. The company however has been up by more than 30% in the last month. GE is an industrial conglomerate that has a stake in many industries. The company’s main segments include power, renewable energy, aviation, and healthcare. GE could benefit from a vaccine that is approved for the public.
The company’s strength was in its aviation segment pre-2020. Moreover, there was strong support from healthcare and its power segments. We all know that the aviation segment had taken a significant hit during the pandemic. Furthermore, the postponement of elective medical procedures had also impacted GE Healthcare. When the economy reopens and the vaccine is distributed en masse, all segments from GE are likely to make both short- and long-term gains.
In the company’s third-quarter fiscal, GE had already noted sequential improvement in its Aviation segment and have strong liquidity with $39 billion of cash. The company reported a revenue of $15.5 billion in its third-quarter as well. Could the vaccine help bring GE back into the commercial aerospace sector at a time where many of the stocks in it are undervalued? It could be a slow climb back to pre-coronavirus times, but it is certainly a step that GE will eventually take. With GE consolidating its business segments, will GE stock be an epicenter stock worth watching?