What do the scientists say about the best way to stop the pandemic?
I ask that because if Joe Biden wins the presidency he is going to go to them, to the best of the best and almost uniformly they say three things: a national mask mandate, more testing, and the closure of bars and restaurants.
Right now to listen to the president is to believe that we will have a European style lockdown if Biden is elected, which is essentially what we had last March. No one is seriously considering that here as it is regarded as a complete failure that wiped out too many small businesses. It's odd that such a verdict keeps coming up as all top scientists just want to enforce what's going on now.
Still if you have to pick winners and losers under a modified lockdown the principal beneficiaries are those that have adapted to the new world, the ones who have spent the last six months preparing for a second lockdown betting it will occur.
So given those parameters who wins? First, of course, is Amazon (AMZN) . If you go over the quarter last reported you can see that Amazon is on target to spend its entire fourth quarter profit on safety, which is a serious bet on the so-called hard winter that the scientists, to a person, are predicting. If we get one, Amazon will be ready for it, which means that its supply chains will be intact if we get the toughest surge. When you spend $4 billion on Covid it means that you are ready for pretty much anything that any politician or any disease gives you.
Amazon fell badly on this news which shows you not how dumb Jeff Bezos is but how dumb the sellers are. If Biden wins and Trump's right this would be the greatest moment in Amazon history given that no one else seems to be ready for an epidemic refresh that's worse than the first one.
Second? I like Chipotle (CMG) . This is the only company with a comprehensive plan to deal with a next wave because it has figured out how it can make as much as it was making without indoor dining. Most restaurants have not adapted well to the idea that there will not be indoor dining in a scientific lockdown. They are simply hopeful. But hope is not a strategy. Some chains, like Cheesecake Factory (CAKE) , an indoor restaurant if there ever were one, will be the most damaged, which, indeed would be a shame but is a necessary sell. I say a shame because the numbers were really coming back strong.
Instead we will be back to a world where Domino's (DPZ) is the biggest winner given that it has no physical presence to speak of. It's an ideal Biden stock that's still pretty good under Trump simply because the current regime hasn't hurt the pizza chain and the lockdown would cause it to soar.
Has a company figured out you need to be direct to the consumer if you are a brand name? Almost no company has figured out how to appeal in a way that could boost numbers and is doing well anyway. For that you have to find companies that are doing well overseas as well as here. That means Nike (NKE) . It has figure out how to obviate the brick and mortar distributor.
Which retailers have figured out touchless and have them, and thrived where whatever rules there are or may not be? Two: Target (TGT) and Walmart (WMT) . They were vigilant throughout. They have been preparing for Biden or Trump. They win in a national lockdown that includes retail because they sell food and will be deemed essential and have lightning quick delivery.
Two clear winners would be Abbott (ABT) and Labcorp (LH) which have spent the most money on testing, testing, testing: Abbott on rapid testing and Labcorp on PCR testing, the former being almost totally effective and the latter perceived as 99% correct.
It's an eclectic group for sure but a Biden lockdown if based on science would principally be focused on places that wear masks.
The good news? All of these ideas work under both candidates. The bad news. This time there's no safety net because there isn't time to put one together. That means the 14 million hospitality workers are unemployed with nothing to save them.