When we finally close the book on 2020, we will never forget what happened as the novel coronavirus pandemic turned our world upside down. At the same time, we will wonder what could have been. It’s not just about President Trump but rather, the chaotic response within the entire federal government. Sadly, due to a variety of factors, the management of this crisis was less than ideal, setting up the case for the stocks to buy this week.
Obviously, the biggest talking point continues to be the coronavirus and how to address this threat. Here, I’m going to extend credit where it’s due. The Trump administration has taken necessary steps to help stem the tide. For instance, the President banned travel from China and Europe as Covid-19 raged throughout the world.
But a nagging issue heading into the election will be the President’s own messaging. Consistently, he has refused to wear a mask in public, sometimes appearing to mock those that did. And because his supporters tend to mimic his boisterous ways, they contributed essentially to a culture war over mitigation efforts. From a cynical view, that bolstered the case for healthcare-related stocks to buy.
Unfortunately, we recently saw some setbacks in this space, with high-profile therapeutics and vaccines being forced to pause their advanced-stage clinical trials due to safety concerns. It was a reminder of how fraught this race for a solution has been. Moreover, it underscored how everything that could go wrong did go wrong for the incumbent administration.
As well, Trump’s own illness with Covid-19 — and his refusal to clearly state when he last tested negative — does nothing to help perceptions move toward his favor. With new daily coronavirus cases still settling at a high threshold, these stocks to buy may benefit from headline-driven catalysts.
- Merck (NYSE:MRK)
- Target (NYSE:TGT)
- Johnson & Johnson (NYSE:JNJ)
- Archer Daniels Midland (NYSE:ADM)
- Gilead Sciences (NASDAQ:GILD)
- Wheaton Precious Metals (NYSE:WPM)
- Axon Enterprise (NASDAQ:AAXN)
- Blink Charging (NASDAQ:BLNK)
- Sturm Ruger (NYSE:RGR)
For maximum utility, I’ve separated these companies into three categories (with three stocks each): higher probability names with limited upside, a balanced approach between upside potential and risk, and finally, the downright speculative trades.
Lastly, I think it’s fair to say that the President has become increasingly out of touch with the American people. Thus, it may be wise to consider at least the possibility of stocks to buy that will outperform under a Joe Biden administration.
Stocks to Buy This Week: Merck (MRK)
After getting a nice bump from Regeneron Pharmaceuticals (NASDAQ:REGN) last week due to the presidential coverage, it may be time to shift back to tried-and-true pharmaceutical giants like Merck. Although MRK is usually one of the best long-term stocks to buy under any circumstance, its profile has been raised due to recent Covid-19 vaccine and therapeutic setbacks.
While MRK stock hasn’t been a high-profile vaccine play, the underlying company eventually got into the race, albeit behind the other names. However, Merck’s vaccine candidate has two attributes that distinguish it from rival offerings. First, it’s potent enough to be prescribed as a single dose. Second, the vaccine is delivered orally.
This could have significant implications for logistics, as many of the proposed vaccine candidates must be frozen. As well, a single-dose regimen would do wonders for accessibility and even desire to take it. While you may not have a fear of needles, it’s not the most comforting proposition for many if not most folks.
Finally, once this pandemic is behind us, MRK stock can start rising on its robust cancer-fighting drug pipeline. Also, you can collect a dividend while waiting out this terrible storm.
Perhaps the most underrated statement I can make is that 2020 is a strange one. Specifically, what makes this year so difficult to navigate is the bifurcation. On one hand, you have millions facing financial destitution due to eviction risks and more recently, displacement from their homes due to the fires ravaging the west coast.
But on the other hand, those who were doing well before the pandemic are doing even better today. From a macabre perspective, the coronavirus may have caused some folks to live their best lives ever due to “benefits” such as working from home. Well, to address this bifurcation, there is probably no better retailer than Target.
With the holiday season coming up, TGT stock may benefit from pent-up demand, particularly from those who are loving the coronavirus. Adding to this thesis is that Target has really beefed up its alternative delivery options, which consumers appreciate. Thus, you may want to consider Target in your list of stocks to buy this week.
Just as importantly, the big-box retailer has the other essentials that consumers need. For example, the company has made strides over the years to expand its grocery offerings. Plus, Target sells other basic goods that could become valuable commodities given the almost apocalyptic period we’re living in. So do yourself a favor and keep close tabs on TGT stock.
Johnson & Johnson (JNJ)
With the coronavirus vaccine race locked in among several “pure” biotech firms early on, Johnson & Johnson didn’t really figure into the conversation. Instead, many analysts believed in JNJ stock because of the many underlying over-the-counter medications that were readily available to the commoner, so to speak.
Then, Johnson & Johnson delivered what appeared to be a body blow: a single-dose vaccine that did not need to be frozen, thereby improving its logistical profile. Most other vaccines in advanced-stage trials need an initial injection, then a booster shot weeks later. That made JNJ one of the better long-term stocks to consider, until it too suffered a setback.
Similar to what happened with AstraZeneca (NASDAQ:AZN), a participant for Johnson & Johnson’s Covid-19 vaccine trial came down with an unexplained illness. While JNJ stock took a sizable hit the day after the announcement, it wasn’t what I would term horrifying.
Still, I understand why some investors are hesitant. However, the setback may present a discounted opportunity as the company still offers a vast and relevant pipeline to help people manage the crisis right now.
Archer Daniels Midland (ADM)
On the surface, food-related companies seemingly represented the best stocks to buy during the pandemic. No matter who you are or how much money you have, you need sustenance. Therefore, this sector seemed like a no-brainer.
However, things just didn’t turn out the way I envisioned. While companies like Kroger (NYSE:KR) and Costco (NASDAQ:COST) performed well, individual food stocks to buy left much to be desired. So, if this resurgence turns out to be the dreaded second wave, I’m going with Archer Daniels Midland and ADM stock.
As you know, Archer Daniels focuses on food processing and ingredients. They provide the solutions and components that all food manufacturers need to take their products to market. With ADM stock, you’re not banking on any one name, but rather, the industry.
Moreover, Archer Daniels is particularly intriguing for those interested in plant-based meat companies but who don’t want to risk the volatility of buying Beyond Meat (NASDAQ:BYND) shares. With ADM, you get exposure to this exciting space but potentially mitigate the wildness.
Gilead Sciences (GILD)
Frankly, Gilead Sciences has been a disappointment throughout much of this pandemic. Early on, Gilead’s remdesivir was touted as a treatment with encouraging efficacy. However, as the vaccine race gained momentum, GILD stock saw its market value plummet during the summer season. Fundamentally, the downside seems odd given that we’ve known from day one that vaccines take years to develop and distribute.
As well, competing therapies may have clouded the narrative for GILD stock. But when it came for the most important person in the world to seek treatment, remdesivir again came up in discussions. According to a CNN report, President Trump “is being given a five-day course of the antiviral drug.” Clearly, this is a PR boost for Gilead.
In addition, Trump’s remdesivir regimen may help ease unfounded support for hydroxychloroquine. According to the New York Times, “the drug neither sped recovery nor prevented healthy people from contracting the coronavirus or progressing to serious disease,” based on studies following the FDA’s granting of an emergency authorization for very sick Covid-19 patients.
What hydroxychloroquine does treat is malaria, lupus and rheumatoid arthritis. Therefore, it’s grossly unfair to those patients to be denied access to this drug due to an almost conspiracy-fueled push for a purpose which has demonstrated mixed results at best.
Wheaton Precious Metals (WPM)
It seems like no matter what the market environment, gold is always risky. Therefore, you should take the idea of Wheaton Precious Metals being one of the best stocks to buy with a grain of salt. It’s not that I don’t believe in WPM stock — I do. Rather, this is a sector that has produced much disappointment.
Still, I hate to use this phrase, but this time could be different. For one thing, it is different. While we’ve suffered serious pandemics before – most notably the H1N1 pandemic of the late 2000s – we’ve never seen state and federal governments impose stay-at-home orders. Unsurprisingly, this imposed a hard stop on the economy, making WPM stock quite intriguing.
Primarily, the doom and gloom prognostications that will shoot gold to five-digit prices are just a tad more credible today. Frankly, the Federal Reserve doesn’t have many monetary weapons other than to adopt as accommodating a policy as possible. Theoretically, this should be very good for gold.
I also like Wheaton for its business model. As a streaming company, Wheaton doesn’t have the direct risks associated with all-or-nothing mining projects.
Axon Enterprise (AAXN)
In my view, Wisconsin is a rather uneventful place outside of football season and I believe the residents like it that way. However, the state and specifically the city of Kenosha is making international headlines. That’s where white police officers shot a Black father, Jacob Blake, leaving him paralyzed and needing multiple surgeries.
What’s startling here is that amateur video footage showed Mr. Blake walking slowly to his car. With his back turned to police officers, he was shot seven times. I’m not going to comment on the matter due to the sensitivities involved. What I can say, though, is that the optics are absolutely horrific.
But I can’t help but wonder, what about the many incidences where we don’t have footage? That’s where police body cameras are becoming vital, not only to protect good law enforcement officers – and let me be clear, most of them are good people – but also to hold the bad ones accountable. Therefore, I believe Axon Enterprise and AAXN stock will see significant long-term gains.
And no, I don’t consider this to be a cynical play on stocks to buy this week. Rather, it’s the reality we live in. Obviously, we can’t have a situation where law enforcement guns down people in the back. But we also can’t have anarchy on the streets.
Axon may not provide a happy middle ground, but it’s one of the best solutions we have. Therefore, I’m bullish on AAXN stock.
Blink Charging (BLNK)
For many years, the concept of range anxiety clouded the bullish case for electric vehicles. But lately, improving EV battery technology has eased this concern significantly. Still, for the platform to become truly mainstream, we will need greater growth in our charging infrastructure. And that’s part of the reason why Blink Charging is one of the speculative stocks to buy this week.
As you know, part of the marketing message of EVs is their environmental friendliness. From what I understand, that’s not too high on President Trump’s agenda. But it’s one of the top issues for the Biden team. And because the former Vice President looked far less like a fool than the incumbent, I think there’s a good chance that Biden may actually take this. In my opinion, that wouldn’t be too shabby for BLNK stock.
Further, many Americans live in apartments. According to data compiled by the National Multifamily Housing Council, 17% of those in California are apartment dwellers. That doesn’t lend well to EVs, which automatically cuts out prospective buyers. But with charging infrastructure, EVs will benefit, which in turn will also boost BLNK stock.
Sturm Ruger (RGR)
Out of all the questions I have heard – and I’ve heard quite a few – President Trump was given the easiest one to answer, condemning white supremacy.
Instead, he gave a perplexing answer, dancing around the issue and deflecting. For any other candidate, a firm denunciation is not only the right answer but the most “profitable” one. Endorsing extremists will only garner a few votes at best and turn off millions of others.
But that’s the world we live in now, which is why I’m placing Sturm Ruger on the list of stocks to buy this week. For one thing, the case for RGR stock has never been better in a cynical sense. With social unrest and overall uncertainty over the handling of the pandemic, firearms are hot commodities.
However, tensions are now so hot that no matter who wins, we may see violence spill out into the streets. Of course, I hope that this is just in my head. But based on record gun sales, I think not. And that suggests RGR stock could be back on the recovery trek soon.
On the date of publication, Josh Enomoto held a long position in gold.
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.