After a rough outing from the Labor Day-shortened week, this week is so far getting off to a better start. However, it’s difficult to know if the immediate but tepid bullishness can be trusted. With a pandemic still lingering, along with massive, unprecedented wildfires along the west coast, investors are rightfully on edge regarding which stocks to buy this week.
Nevertheless, it’s important to take the good news that’s available. For one thing, the August jobs report was better than expected, with total nonfarm payroll employment rising by 1.4 million. Second and more importantly, novel coronavirus cases continue to decline. As a result, American society is slowly returning to normal. One conspicuous indicator is that football is back.
However, fears of a Covid-19 resurgence are strong. Yes, cases have declined, leading to conservative media outlets suggesting the worst is behind. Unfortunately, at this point, those on the right have lost credibility, especially considering President Trump’s admission that he knowingly downplayed the coronavirus threat to avert panic.
Frankly, people outside of Trump’s loyal base will likely grant more credibility to health experts, the same experts that the President presumably listened to earlier this year. Thus, the case for coronavirus-related stocks to buy remains relevant.
Adding to the pandemic woes are a series of natural – and in some cases, unnatural – disasters. As you know, we’re in the midst of a record-breaking hurricane season. On the west coast, raging fires stretch from Washington to California, causing officials to plead for help. We’re in a terribly volatile situation, necessitating a diverse blend of stocks to buy this week.
- Abbott Laboratories (NYSE:ABT)
- Target (NYSE:TGT)
- Johnson & Johnson (NYSE:JNJ)
- Archer Daniels Midland (NYSE:ADM)
- Moderna (NASDAQ:MRNA)
- Wheaton Precious Metals (NYSE:WPM)
- Axon Enterprise (NASDAQ:AAXN)
- Slack Technologies (NYSE:WORK)
- Smith & Wesson Brands (NASDAQ:SWBI)
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, while coronavirus cases may be going down, social unrest is again exploding higher as events featuring strong racial undertones have come to the forefront. So, brace yourself and consider these stocks to buy.
Stocks to Buy This Week: Abbott Laboratories (ABT)
The federal government’s Operation Warp Speed has rapidly accelerated the push for a coronavirus vaccine. Typically, a vaccine takes years to bring to market. However, the Trump administration hopes to get one out to the public before election day. Obviously, this universal demand drives the case for stocks to buy this week in the biotechnology space.
However, just like the virus, gambling on this sector has been brutal. For conservative investors who still want exposure to a potential solution, you may be better off with Abbott Laboratories. What I like about ABT stock is that it’s levered to a relatively underappreciated component of our corona battle: diagnostics and testing. Without testing, our frontline workers are really operating in the dark.
Recently, that’s exactly what medical experts bemoaned. Without a robust network of testing, it’s hard to know how to combat Covid-19 hot spots. Therefore, expect ABT stock to have an extended upside pathway so long as we’re dealing with this pandemic.
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)
Even with Dr. Fauci’s updated expectations that a coronavirus vaccine could be ready by the end of this year, that too could be optimistic. Generally speaking, vaccines take years to research, develop and distribute on a mass scale. Throwing money at the process might work but probably not. Therefore, investors should consider the present discount in Johnson & Johnson.
If we must manage the crisis individually as Dr. Fauci is implying, then standard over-the-counter medication may be the ticket for stocks to buy. Also, flu season is coming, which further helps the case for JNJ stock thanks to various cold/flu medications under the Johnson & Johnson umbrella.
Plus, the race for a vaccine may not have a single winner. Indeed, I think it’s unlikely given the diversity of the U.S. population. So, JNJ stock may enjoy some upside thanks to its underlying Covid-19 vaccine development. Also, Johnson & Johnson is one of the few pharmaceutical firms that have the capacity to mass produce a vaccine.
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.
As you’re all too painfully aware, very little has gone according to plan regarding the coronavirus response. Perhaps most disheartening of all is to hear revelations from President Trump that he knew about the severe dangers of Covid-19. In other words, this powerful message could have been communicated earlier, likely leading to better health and economic outcomes.
Well, unlike the President, most Americans can’t complain because it won’t do us any good. Therefore, the next best thing is to consider stocks to buy of companies that can address the crisis. In this context, Moderna may offer some upside potential for a vaccine solution.
In the spirit of full transparency, I believe a treatment, not a vaccine is the most realistic course of action. Still, if you’re committed to the vaccine concept, MRNA stock looks the best among the major candidates at this time. First, traditional vaccines will take far too long to implement, and time is something we just don’t have much of.
Second, MRNA stock is levered to nucleic-acid based vaccines, specifically involving messenger RNA (mRNA). Unlike the AstraZeneca (NYSE:AZN) vaccine candidate which utilizes a viral vector (carrier), Moderna’s candidate has not had major hiccups. Combined with the scalability of mRNA vaccines, Moderna might move to the head of the class.
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.
Slack Technologies (WORK)
For Slack Technologies, it’s been a tale of two cities. In the first half of the year, WORK stock performed very well as several companies moved to remote work platforms. And Slack offers an intuitive and organized manner in which people can communicate effectively.
Part of the operational attractiveness of its product is that addresses email’s rather cumbersome nature. For instance, when you receive messages in your inbox, there’s no way to determine quickly what messages are important. Plus, you have to open them. With Slack, you can immediately call someone to attention for an urgent matter.
However, in the second half of the year, WORK has been one of the laggards among outbreak-fueled stocks to buy. Recently, shares have been hit hard as coronavirus cases fade.
Granted, WORK stock is risky because the worst could be behind us. But judging how this year has treated us, I wouldn’t be surprised to see a second wave. And that could shift the needle back favorably for Slack Technologies.
Smith & Wesson Brands (SWBI)
In another heartbreaking and simultaneously disturbing display of the fracturing of our nation, an anti-police protest unfolded outside a Los Angeles-area hospital. That’s where two police officers, who were ambushed in an unprovoked attack, were being treated. In a callous display of inhumanity, some protestors openly wished for the officers’ deaths.
Obviously, the vast majority of protesters calling for social justice vehemently disagree with such disgusting outbursts. But in this heightened state, I don’t believe people will recognize this nuance. We’re now in a dangerous place where those with opposing views are seen as the “enemy” rather than human beings. As a result, I’m looking at Smith & Wesson Brands as one of the stocks to buy this week.
Yes, it’s sad and cynical. However, when nuance is lost and violence rules the day, you’ll want to buy firearms. It’s a situation where we have mutually assured destruction on an individual scale. Violent members of society will likely hesitate if they believe their intended victim has a gun. This is the case for SWBI stock in a nutshell.
And don’t believe that I’m using hyperbolic language. Prior to the pandemic, SWBI stock merely existed. Now, it’s one of the hottest assets on Wall Street. There’s a reason why that is.
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.