I have seen the future, the post-Covid era. Today we found out exactly what it will look like. It's fantastic: we will all take planes to get to rent gas-guzzling cars and then shop our darned fool heads' off. It's an amazing new world and it is a wonder to behold.
Of course I am exaggerating but when we go three for three with vaccines - Pfizer (PFE) , Moderna (MRNA) , using RNA technology, and now AstraZeneca (AZN) with a more traditional technology - you have to start believing that this darned pandemic has an end. Today we simply saw real buying in the areas that are perceived to be able to roar back within three months to four months, about as long as investors have an appetite for.
And what are they going for? I have the list, the stocks that they want, the victors that you can buy on any sign that there is a glitch in anything related to vaccines, although in the case of retail, I think you just buy period.
Let's start with aerospace. If we are going to travel again, and travel will be worldwide, we can just go buy Boeing (BA) . I think it shocks us with orders and it is the ultimate non-environmentally related Biden stock. You have missed nothing. The move is just beginning and wait until we get the China orders. If you don't want to buy a $200 stock and you don't want a fractional share, go buy GE (GE) . We have liked it since $7 and we think with that last acquisition in health care, GE's playing offense. The chicken way to approach aerospace: Honeywell (HON) , which supplies cockpits to pretty much everyone.
Next we need an airline. I am voting for the best run which is Southwest (LUV) . Once again it is well off its high and therefore has a lot of runway. The people who think international opens up? Go with United (UAL) . Of all these airline, aerospace companies I vastly prefer Boeing.
People want to own a marginal retailer that is on the comeback trail. To me I like Macy's (M) as it was ahead of plan for earnings before interest taxes depreciation and amortization. Kohl's (KSS) works, too. It was a decent quarter. You can always buy the LAG trade, L Brands (LB) , American Eagle Outfitters (AEO) , and Gap (GPS) that Matt Boss, the retail expert par excellence talks about at JP Morgan. I like Tapestry (TPR) very much, too. I think PVH (PVH) has gotten a little ahead of itself but I can see going for Levi's (LEVI) . It's funny but as much as I love Nike (NKE) , it is too consistent to make this list. The consistent companies, like a Costco (COST) , just don't work, You need an inconsistent company that does better when customers can visit the stores.
You want shopping? You want Federal Realty (FRT) which came on Mad Money and said that it didn't have to cut its dividend. If the vaccine is as close as they say, he will be a hailed conquering hero, especially as he's been able to pivot to more than just a shopping center. Mixed use works. Makes sense to buy Simon Property (SPG) , too. It's gotten through the swallowing of Taubman and it's onward and upward.
Couple of breakouts here that attract me: Ulta (ULTA) which is on a run, Estee Lauder (EL) , after an amazing quarter and, of course, Target (TGT) . They are all vaccine stocks and they are undeniably going to be loved beyond where they are if the vaccine gets into our hands by mid-January. Estee Lauder is the best if you think the whole world is going to open up, something that could happen if the billions of doses AstraZeneca is talking about gets distributed. I am drawn to Target because it is being re-rated right before our eyes into a more consistent winner. Took a while but it's there.
We have gone over the distribution issue and but we don't want to fight the Amazon (AMZN) death star that took out the drug stores. Instead we go with McKesson (MCK) which is going to distribute the vaccines. They are excellent at the job and will be far more consistent than the drug chains as people forget quickly that McKesson could be hurt by Amazon, too.
Where are we going to go once we can go somewhere? Easy Disneyworld (DIS) . There's so much good happening with Disney+ that you can buy this one on that alone. But I think it is just an easy buy given how it has the money to last for as long as necessary.
Of course, it doesn't matter what is said about the cruise lines, they can't be resisted. Norwegian Cruise (NCLH) just issued a big slug of equity - 40 million shares. But that dilution means nothing to a whole hoard of younger buyers. Royal Caribbean (RCL) is always in the running for number two and then I would go with Carnival (CCL) last.
We want to go out to dinner. The Biden stimulus, or at least the one businesses are clamoring for, will arrive too late to many independent restaurateurs because we can't expect to vaccinated all at once. That interval will be the last draw and you are going to want to own Darden (DRI) , parent of Olive Garden. Texas Roadhouse (TXRH) works, too.
I have said there are two investable oils, Pioneer (PXD) and Chevron (CVX) , and I am sticking by those two even as there are now many buyers of the more hobbled oils like Occidental (OXY) and Exxon Mobil (XOM) . I think that Pioneer's buy of Parsley is genius and we just spoke to Chevron's Mike Wirth and his company's doing great. I would prefer not to go down the food chain because these other stocks need $45 oil to maintain their pace.
Anything auto works, whether it be new or used. General Motors (GM) is on a giant breakout, helped by its decision to go against Trump on the ongoing battle of California versus the rest of the country. Tesla's (TSLA) not done. But it is never done. I like some of the derivatives like Illinois Tool Works (ITW) , DuPont (DD) and NXP Semiconductors (NXPI) . The problem with all of these is that they have run but that's why you needed the barbell I have been talking endlessly about. If you just owned stay at home work at home stocks you get bushwhacked on vaccine days.
The market loves banks because of a belief there will be more spending. If that's the case I would attack the segment with Visa (V) , Mastercard (MA) or American Express (AXP) . If you think that the world is going to open up I would go with Mastercard. American Express is up huge after a just okay quarter and seems extended. But then again Square (SQ) and PayPal (PYPL) are, too. They got that way because they take Bitcoin. First bank that wants to make a big market in bitcoin can see its stock fly, too.
Now I will come back to these names over and over again as we are now in the sweet spot for many as earnings are almost over and we are going to have visions of sugarplums dancing in our heads. No matter what, I would pick two or three up and then wait for a bit of a decline when a negative vaccine story of some sorts comes out. After all, they can't all be successes. Or can they?