3 Covid-Proof Plays Not Named Amazon or Apple

I continue to believe the market is overdue for a decent correction after its massive rally over the past four months off the Covid-19 meltdown lows set in late March. The economy contracted by one-third in the second quarter according to the initial GDP report that came out Thursday. We had an initial big rebound in economic and job activity as states started to reopen their economies in May and June. However, that increase in activity seems to have petered out as states pause or repeal reopening phases thanks to recent spikes in confirmed virus cases. Continuing weekly unemployment claims have stalled over the past few weeks and it seems like the economy is stuck in purgatory due to this abundance of caution by governors and mayors nationwide. We have been in the heart of earnings season this week as 40% of the S&P 500 is reporting second-quarter results. The plunge in economic activity since the first of the year has impacted most sectors in the market, which is reflected in the quarterly numbers we are seeing. Nonetheless, four of the five FAANG stocks reported better-than-expected quarterly results after the bell Thursday, which should lead to gains in the market here on Friday to close out July on a high note. There also are a few companies outside the big-tech names that seem to be doing fine despite the huge economic challenges we are facing. Here are a few names that stood out to me this week for delivering robust results in a difficult environment. Let's start with Tutor Perini Corp. . One of the few good decisions during this pandemic local officials have made is to allow construction projects to continue while so many non-essential workers were instructed to shelter in place. This benefitted big construction outfits such as Tutor Perini, which saw its second-quarter revenue rise more than 13% on a year-over-year basis in a market with a dearth of sales growth. Considering that so many of Tutor Perini's huge projects are government-financed, I would look for the company to continue to ride out the economic challenges in this environment. The stock goes for just over 6x this year's expected earnings. Housing has been another rare economic sector showing considerable strength this quarter. Home builders almost universally have beaten top- and bottom-line expectations when reporting quarterly results. Beazer Homes USA Inc. was no exception. Its sales rose 10% in the quarter. Improving margins helped the company posted much better earnings than the consensus as well. Most of my favorite home builders such as LGI Homes Inc. have had massive runs off the late March lows and I would not be chasing them at current trading levels. Beazer is one exception, as I still see upside left in this name. Finally, we have Alexion Pharmaceuticals Inc. , which makes products that target rare diseases and that apparently are needed regardless of pandemics. Alexion easily beat expectations when it reported quarterly numbers on Thursday. Alexion is making good progress migrating Soliris users to recently approved Ultomiris. It also saw good sales growth from its Strensiq and Kanuma compounds, all of which led to 20% sales growth in the quarter. Alexion also upped full-year revenue guidance nicely as well. The shares go for less than 10x this year's expected profits and still represent good value in a market that seems overbought to me. And those are three names that delivered better-than-expected growth in the quarter that didn't get the attention of an Amazon or Apple .

3 Covid-Proof Plays Not Named Amazon or Apple

Tutor Perini, Beazer Homes and Alexion Pharmaceuticals all turned in solid results in the face of the pandemic.

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