We are, and should be, sensitive to the those who have lost their lives to COVID-19 or the coronavirus. The sad nature of this disease that seems to be resistant to everything that's thrown at it is changing lives and forcing people to make new choices in the way they live.
I don't wish to be a profiteer. But I do wish to try to help people who believe that there are companies that are benefiting from the outbreak, even if they are not about to shout it from the rooftops.
So, with the admittance that some might feel that this is not appropriate but others who think that it's only fair to help, let me give you my view of what the virus has changed in our lives, both work and play, to do what you wish with it.
The first company that comes to mind is Clorox (CLX) . We are learning that the virus is, sadly, resistant and resilient when it's on surfaces. I carry Clorox Disinfecting Wipes everywhere I go. I don't think there's much choice here anymore. You can't afford not to have wipes of some sort because of the potential of surface contamination. You also know that bleach can kill it on contact on your clothes if they are in contact with the virus. So you have both wipes and bleach. Now, here's what's really important. You can't say "buy Clorox" because this piece of the Clorox repertoire is not enough alone. If you have a lot of things going wrong with Clorox away from the bleach business, which is the part of the 34% of the company that is home care and laundry, then you can't touch it. But I think that is enough of a driver and it can offset the weakest segments, which are bags and charcoal, about 21% of the company. The company is incredibly well run, the cost savings from their Ignite strategy are coming through, and it is a buy, which is what I am telling club members of Action Alerts PLUS as Clorox is an integral part of my charitable trust.
Second, Zoom Video (ZM) , is probably the most relevant company, because almost every company I talk to with substantial exposure to China is installing Zoom to be able to keep in touch with at-home workers. We spoke to Eric Yuan last week and he said the phone as "ringing off the hook."
I thought for sure that the stock would go much higher just on the interview. It did next to nothing. Now it is on the move? OK, so you missed a little of the move, here. But I believe it is going through its all-time high of $107, even as it is up 43% for the year. It is hard to imagine sales going down just when the virus spreads beyond its epicenter. I wish I could say you could buy Cisco (CSCO) off its Webex business, which is also video, but that's more of a large enterprise product, and it's just not big enough to impact the company's bottom line.
Finally , I would be willing to buy Gilead (GLD) with is 4% yield. It has the best collection of anti-viral drugs and it is the most likely of the drug companies to help solve the puzzle of what to give hospital patients. Even if it fails, the stock is too cheap to ignore.
What can't you buy? I think that 3M (MMM) does not work, even as it has the best masks, because unlike Clorox, I do not believe the rest of the portfolio can offset the strong demand for the masks, no matter what the price.
I know that's a short list. But this virus does not yet lend itself to goods that are working. It is, however, a colossal contributor to a slowdown in world growth that cannot be offset, right now, by additional stimulus.
Clorox and Zoom on reality, Gilead on hope. That's about it.
