If you aren’t aware of the devastating effect the coronavirus has had on the stock market, then you must be living in a cave! The market has witnessed one of the sharpest plunges ever, and investors are unsure what to do. Do they lock into steep losses or try and profit from possibly the best buying opportunity the sector has ever witnessed?
Nobody knows if the market has hit rock bottom or if it still has a few bull traps to hit before hitting bottom. Investors should hang fire and consider future opportunities to scoop up bargains as the market continues to fall. However, if you do have the cash to invest and want to see a rapid upside correction, there is a way.
Consider investing in this seemingly toxic stock option and investing in Manulife. This Canadian insurance company stock price has fallen so far; its intrinsic value has been undercut. There is a window of opportunity for the canny investor to pay an all-time low stock price of 0.3. If you dare to put your money into this crisis, hit the stock, you will lock in an 8% yield accompanied by a healthy percentage gain as the market recovers.
Insurance may not be a sexy stock, but it will become a must-have product as the world recovers. There is no doubt we are heading for a rough recession, and Manulife will suffer losses. However, its bargain-basement price makes it a stock to buy for the future.
Cheap Stocks to Buy for Under $10
If you are looking for a stock that is too small and risky to attract most mutual funds and money managers, then you stand to profit if you can be patient and ride various market cycles. Of course, the price should not be the only factor when considering your investments, but it can be a good starting point.
Consider these options:
Propetro (PUMP) Founded 2007
Based in Texas, this is a primary provider of hydraulic fracturing services in the northern US. It also provides other oilfield services and is growth orientated. It serves oil and gas companies that are currently exploring unconventional methods of providing energy.
The stock is priced at $2.23 and has a consensus price target of $14. This is an upside of 530% and provides an opportunity to hold on to this underpriced stock until it has been achieved.
Qudian (QD) Founded 2014
With headquarters in Beijing, the company provides online consumer credit products in China. They aim to transform online shopping experiences and improve the whole experience for customers using it. Its equipment enables smaller companies to offer direct credit options that are commensurate with larger companies. As the country begins to recover from the current crisis, smaller companies will be seeking ways to improve their services, Qudian can provide this option and stocks should thrive.
The stock is priced at $1.86 and has a consensus target price of $5.50, giving it a projected upside price of just short of 200%.
MFA Financial (MFA) Founded in 1997
This company is an umbrella company that has subsidiaries dealing with all things real estate. They cover residential loans, mortgages, credit risk securities, and other securities. It passes on at least 90% of its taxable income to stockholders. The company is well established and one of the leading lights in real estate.
The stock is priced at $1.30 and has a consensus price target of over $8.20, giving it a projected 545% upside.
Callon Petroleum (CPE) Founded in 1950
With its headquarters in Houston, this company is perfectly positioned to focus on unconventional onshore energy sources in Texas and New Mexico. It has impressive reserves of oil and gas and is heavily involved in further acquisitions and development in the area.
The stock is priced at under 50 cents and has a consensus target price of over $7 that translates to an upside profit of around 1600%.
In these times of self-isolation and quarantine, it is a no brainer that Netflix stocks will soar. People are frustrated and bored; they are turning to Netflix to provide them with an alternative reality to escape the crisis we are all in. Experts predict that shares will hit the $400 plus mark soon.
So, should we try and pick up stock and wait for it to gain in value, or could there be another way to cash in on the entertainment bubble?
Eros International Plc (Eros)
Termed as the Netflix of Bollywood, this stock could increase in value as more and more people are investing in their home entertainment packages. The stock has been the subject of speculation, with some experts predicting a 400% rise in price as the situation worsens. There is a note of caution regarding the company that can’t be ignored. Its management strategy and accounting methods have been questioned and, as such, renders the stock as a risk-takers option.
Already the biggest competitor to Netflix, why should investors be considering this stock? The future is changing, and Amazon provides a vast platform to members of its Prime membership. As the crisis worsens and customers rely on deliveries, they will be forced to consider Amazon as a viable alternative to Netflix. They offer a free delivery option included in their streaming package. Should the customer choose to subscribe to the streaming service alone, they will pay the same price as Netflix basic for an Amazon premium service.
As suggested by the brand name, this new streaming service has attracted a good deal of hype. They worked with Netflix in the past to supply an exclusive package of live streaming and downloads. This relationship ended as Disney entered the streaming arena. They offer the complete library of movies and TV series produced by the brand along with Marvel, Star Wars, and National Geographic content. The service is competitively priced and could become a thorn in Netflix’s side!
Biotech Stocks Could be the Answer
The media may be telling us that a vaccine is being developed, and it is only a matter of time before it is in circulation. While that may seem comforting, it is also unlikely. The two previous viruses that hit us, SARS in 2002 and MERS in 2012, are still without successful treatments or vaccines.
Coronavirus is a different matter. We need a vaccine; people are dying at an unprecedented rate, and urgency is driving research to find a solution. Thankfully the development of medicine has advanced since these outbreaks, and there is a real chance that one of the following companies will be successful.
Investing in the following companies could be the key to making a profit from a crisis.
Moderna already has five candidate drugs in research stages that could develop into the potential vaccine. It was the pioneer company that developed the Zika vaccine that is currently in phase 1 of development. It also has two respiratory virus vaccines that may prevent further outbreaks in the future.
This company has been chosen by the Government based coalition who has been tasked with eradicating and controlling epidemics to aid them in their research. It joins a team of experts who are dedicated to creating a world in which epidemics no longer pose a threat to mankind.
Translate Bio (TBIO)
This company may appeal to investors who like to think outside the box. With a market capitalization of less than $500 million, it has no revenue on the books. Furthermore, it has a stock price that fails to recognize the company’s potential in developing the vaccine that eradicates coronavirus. Translate Bio has an MRT platform that develops therapeutic antibodies and vaccines in the areas of infectious diseases. It may lack the resources to develop a vaccine alone, but it may be part of a collaborative effort.
Johnson and Johnson (JNJ)
This vast and diverse health care company has already witnessed an upturn in profits due to the virus. It has increased the production of personal protection equipment and cleaning products to match demand. Consumer products, pharmaceuticals, and medical devices already form a major part of their revenue, but it is the vaccine research we need to look at.
The company stated that work to develop a vaccine started in mid-March. It is based on a sequence already available to the company, and they are optimistic that testing could begin later in the year. The company stands a good chance of becoming the first conglomerate to produce a testable vaccine.
The spring rally is often a time of strength for the gold market. Fueled by the sense of optimism felt at this time of year, it is generally a time of optimism and hope, which is accompanied by rising prices. This year it is fair to say that the sense of optimism is lacking. Gold will still be an investment to consider as we consider what lies ahead as the virus recedes.
In late July, the Asian sector should be plowing money into the gold market. This happens because farmers have reaped their harvest and tend to invest in the market. This cycle of growth is followed by the traditional cycle of weddings in India. Gold sales will soar as the bride’s family begins to prepare dowries for the marriage festival.
The Western world then becomes the prime buyers of gold and silver. The holidays show a marked uprising in buying gifts for family members as bonuses are paid, and surplus income abounds. Followed swiftly by the Chinese New Year, it is not unreasonable to expect a surge in the price of gold stock. The Chinese will hopefully be experiencing a renewed sense of optimism in the economy and celebrating it in style.
This ears spring rally is going to be challenging. Gold should have been rocketing in the market as the geographical pandemic wreaked havoc in Asia. However, the capital input required to boost its status failed to materialize. Without this sizable capital inflow, we could see a muted rally come spring. But things are going to change, they always do! There is an ironclad relationship with gold and profitability, but you need to understand the stock price levels.
Americas Gold and Silver Corporation (USAS)
Even during all the volatility within the markets, there is still optimism attached to precious metal investing. It is still muted, but experts are proclaiming that 2020-2021 will be a period of growth for USAS. They predict up to a 300% rise in production, which will see the stock rise from its current price of $1.50 to the heady level of $4.50 by the end of this year.
Wall Street is also predicting a silver rally by the end of 2020, and stocks in companies like Endeavour Silver Corp (EXK) may be worth a punt. The Canadian firm has taken a hit recently, and its stock is priced around the $1.40 mark. The fear is that the coronavirus will lead to a lack of demand from industries. There may be short term volatility, but the opportunities are there for silver to rise to nearer the $20 mark by the end of the year. Combined with a low debt/equity ratio investing in EXK seems like a sure thing.
Fortuna Silver Mines (FSM)
Another option for investment in silver mining is this junior miner’s firm, you may have to be patient and keep everything crossed, but these miners are grossly undervalued now. In the current market environment, it is difficult to see how precious metals can fail to pay off in the future.
The bottom line is we can speculate as much as we like, but the fact remains the world will never be the same again. This pandemic is unprecedented, and the effect on the markets will become apparent as and when they happen. You can choose to see it as a disaster, or you can set it as an opportunity. The choice is yours. Sometimes fortune favors the brave, and we are all having to be brave in these times of crisis.