For many investors, thinking about stocks to buy is not on the agenda. Instead, a sense of dread appears to be the prevailing attitude. Frankly, the red ink that we saw splattered during the last week of February may not be the end of it. However, keep in mind that black swan events, such as the coronavirus from China, also offer once-in-a-blue-moon discounts.
First, let’s acknowledge the grim news. After President Donald Trump expressed confidence in his administration’s response to the coronavirus, the disease claimed the first American life. Washington state health officials stated that a man in his mid-50s with underlying health conditions apparently contracted the disease without having traveled abroad. Furthermore, state officials have declared that many other residents have shown symptoms.
Worryingly, the Seattle Times reports that Kirkland, a city in King County, Washington, has quarantined 25 firefighters and two police officers due to possible coronavirus infection. Hopefully, they will be cleared. Otherwise, the case for stocks to buy will face turbulence in the coming days.
As such, investors should carefully tread water on the names that I’ll soon present. While I believe they have a viable case for bullishness in March, the coronavirus is a dynamic crisis.
With that caveat out of the way, the recent dips have created compelling opportunities in stocks to buy that are levered to a temporary rethink in consumer sentiment. Put another way, people are not thinking about gadgets and gizmos. Instead, they’re thinking on a more existential level.
Therefore, if you like speculating on the headlines, here are eight stocks to buy in March.
We’re all familiar with the Great Depression-era image of the run on banks. Indeed, because of this terrible situation, the federal government put in place protections to prevent another recurrence. But what about a run on groceries? It’s an uncomfortable thought, but it’s one that drives the speculative case for Kroger (NYSE:KR) and KR stock.
Although Kroger’s supply chain isn’t as impacted from the coronavirus as other names, shares still suffered badly. As you probably know by now, factory activity data in China dropped to an all-time low. With so much of the global economy levered to China, a hit there could have substantial reverberations everywhere else. On a net basis, this doesn’t help KR stock.
However, Kroger will probably see unprecedented demand in the next few weeks as consumers eschew discretionary purchases for necessary ones. Therefore, you’ll want to keep this grocery giant on your list of stocks to buy.
Costco Wholesale (COST)
If you’re looking to doomsday prep for the coronavirus, Costco Wholesale (NASDAQ:COST) is your go-to ticket. For those who’ve wondered why you need to buy 50 gallons of mayonnaise, this outbreak has your answer. In all seriousness, though, COST stock is among the best stocks to buy for March because of one key factor: their affluent members.
It’s not unusual to see some fancy rides in your local Costco’s parking lot. As many studies have pointed out, the average income level for members is around $100,000. On the blogosphere, I heard rumors that Costco ran out of their emergency kit pallets, which are priced over $3,000. I don’t have any reason not to believe it: again, these folks are rich.
However, I do have a word of caution for COST stock. Technically, this is one of the weakest names, having recently closed below its 200-day moving average. Therefore, you’ll want to tread lightly on this one.
Procter & Gamble (PG)
If you’ve been following the news, you’ll know that the coronavirus continues to spread throughout the world. At time of writing, we have a total of nearly 87,000 cases and just under 3,000 deaths. Naturally, this has caused many people to panic: they see the writing on the wall and want to prepare ahead of the crowd.
And that sentiment bodes very well for otherwise super-boring Procter & Gamble (NYSE:PG). Over the years, PG stock has steadily trekked higher because of its underlying secular demand. Procter & Gamble sells essential household goods, such as soap, detergent and the big one, toilet paper.
In fact, a Costco store in Hawaii saw a run on toilet paper and I’m not surprised. Eating beans, peanut butter and saltine crackers daily makes you want to have a robust transmission yourself. Despite a huge drop-off in PG stock, don’t be surprised to see sentiment pick up in March.
Home Depot (HD)
Generally, I pegged Home Depot (NYSE:HD) as one of the more reliable stocks to buy under any circumstances. Even during natural disasters, HD stock has relevance. No matter what, people have to repair their homes. But with the coronavirus, Home Depot – which admittedly is a boring investment – got very interesting.
First, the coronavirus was clearly a black swan event for HD stock. Before efforts to contain the virus in China failed, shares were up nearly 13%. A healthy labor market, as well as strong economic signals augured well for the home improvement stalwart. Thus, the present volatility is a long-term discount as this outbreak will eventually fade.
Second, while people are preparing for the virus to ripple across the U.S., Home Depot should see demand ramp up in the nearer term. As people bunker down, they may need reinforcements. Also, those N95 face masks sold out fast.
Johnson & Johnson (JNJ)
Due to several charges and lawsuits that painted Johnson & Johnson (NYSE:JNJ) in a very negative light, it’s not one of the most popular companies right now. Since the summer of 2017, JNJ stock has undulated, but with virtually no progress. But with the raging coronavirus, consumers might forgive the company. If so, you’ll want to include it among your stocks to buy for March.
Before we get into it, let me just acknowledge that the drop in JNJ stock is sickening. Since Feb. 5, shares plummeted over 12%. Essentially, Johnson & Johnson has lost the momentum it gained off the Trump administration’s phase one trade deal with China. Still, this is a great opportunity not just as an example of stocks to buy for March, but for a far longer period.
Regarding the coronavirus, I anticipate a run on over-the-counter medicines. According to the Centers for Disease Control, there is no cure for the coronavirus: thus, you have to follow basic protocols that you would for the regular flu. Theoretically, this may also bring a positive light to the presently embattled Johnson & Johnson brand.
CVS Health (CVS)
So long as the coronavirus doesn’t get too out of hand, you’ve got to like your chances with CVS Health (NYSE:CVS). Similar to Johnson & Johnson’s bullish narrative, CVS offers panicked consumers supplies of over-the-counter meds: first come, first served, of course! In terms of speculating on the outbreak, CVS stock is one of the direct-play stocks to buy.
If I’m reading the CDC’s recommendations correctly, they prefer you to isolate yourself if you get the coronavirus. Should your condition deteriorate to the point where you require medical care, special protocols are in place. For instance, you must call ahead before visiting your doctor to not infect other people.
Again, while supplies are available, CVS – and competitor Rite Aid (NYSE:RAD) – provide the “tools” necessary to mitigate your illness. Plus, the shift from discretionary to necessary spending will help drive demand in the retail pharmacy space.
Sturm Ruger (RGR)
Let’s face it: this wouldn’t be an authentic gallery from yours truly if I didn’t include some controversial names. For this list of stocks to buy, I’m going with an old favorite, Sturm Ruger (NYSE:RGR). Of course, guns are controversial in any situation. But if the coronavirus outbreak worsens, you may see a strong uptick in RGR stock.
Remember that Seattle Times story I referenced above about the quarantining of firefighters and police officers? Unfortunately, criminals are looking at this type of news and making calculations on which neighborhoods to strike. Those areas that have a higher proportion of debilitated law enforcement officers are obviously at greater risk; hence the bullish thesis for RGR stock.
But set aside the criminal element. In a health-related panic, I think you have to worry about the public going nuts. Therefore, buying a firearm makes sense in this violent, unstable country.
Vista Outdoor (VSTO)
If you’re going to buy a gun, you’ll need something to go with it: ammunition. But if you know you’ll head down this road, you better get there quickly. Doomsday preppers, which the “normals” of society have sneered at, are already there, buying what their budget allows. Because of this demand surge, Vista Outdoor (NYSE:VSTO) looks promising as a speculative trade.
Don’t let the innocuous corporate name fool you: Vista owns several popular brands of ammunition, ranging from the “practice” variety to ammo specifically geared for home defense. But in a panic, all iterations – including the premium-label stuff – will fly out the door. Therefore, I’d expect VSTO stock to quickly jump higher.
Moreover, Vista isn’t all about doom and gloom. The company offers several non-controversial products that consumers will find useful, especially if commerce shuts down for some time.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.