Coronavirus has taken more than 79,385 lives globally, infecting about 13,56,780 people all over the world till date. While the respective governments are taking needed measures to protect its citizens, the biotech industry is devoted to developing a vaccine to fight the virus.
Investors are thus looking for safer bets like putting money in banks, which offer consistent returns, but it will certainly not help the ones looking for higher returns.
Let’s have a look at some diversified sector - healthcare, consumer staples, banks and technology stocks that are ASX-listed with strong fundamentals and capacity to remain afloat in this challenging environment.
Healthcare stocks are gaining momentum compared to other stocks amid coronavirus pandemic. The sector is catching the interest of investors due to increasing research on new medicines, approvals from Food and Drug Administration and patents.
Cochlear Limited (ASX: COH), a medical device company makes, supply and offer implantable hearing solutions for a lifetime. On 8 April, the Company notified on obtaining US Food and Drug Administration (FDA)approval for its Remote Check solution – first telehealth patient assessment tool that will track data of the implant patients and help healthcare officials to detect audiological care during the virus outbreak.
Micro-X Limited (ASX: MX1), a hi-tech leader in cold cathode x-ray technology for health and security markets around the world received purchase orders for the Carestream DRX Revolution Nano worth $1 million for the Australian market and $0.2 million for European and Asian countries.
The ramp-up in the Nano production will lessen the delivery time for the orders. The firm has received orders worth $3 million and revenue worth $1.3 million for completed Nanos in the March quarter.
Zoono Group Limited (ASX: ZNO) struck a deal with Doha, Qatar-based Al Rabban Capital. ZNO’s products are to be supplied in the Middle East & North Africa region for 5 years primarily as part of the pact. While the firm logged revenue of NZ$15.7 million for the March quarter, UK sales rose to NZ$3.5 million due to noteworthy business in the pipeline with airlines, transport, airports and commercial cleaning corporations.
The Company has expanded its requests for raw materials and hired more workers to meet the higher demand.
G Medical Innovations Holdings Limited (ASX: GMV) develops mobile and e-health technology and had developed a mobile monitoring system, Prizma to monitor signs of temperature, stress, heart rate, blood oxygen levels and ECG to detect symptoms of illness and infection.
The firm has been granted over-the-counter authorisation for its real-time monitoring system Prizma by the US FDA based on policy for COVID-19 public health emergency. This has unlocked a massive opportunity for the firm in the US market as now the device can be sold directly to consumers without a prescription.
Shares of Metcash Limited (ASX: MTS) was up by 25.5% while Coles Group Limited (ASX: COL) share price increased by 6.3% during March, exhibiting positive performance of the stocks. The share price of Woolworths Group Limited (ASX: WOW) fell by 10.5% in the same month.
The stock price of Coles and Metcash has been improving while shares of Woolworths is not showing a matching rise, but still faring better than the benchmark index of S&P 500/ASX 200. The increase in share prices is due to the panic buying actions of the customers to stock up on supplies amid COVID-19 fears.
Overall, cash business for the supermarkets is anticipated to persist in being healthy due to nonstop buying, which is vital for their earnings.
Big 4 Banks of Australia
The Australian banks have now become amongst the safest in the world as capital standards were tightened.
On 8 April 2020, Bank of Queensland announced a delay in its interim dividend for FY20 because Australia Prudential Regulation Authority (APRA) urged all lenders to limit discretionary capital distributions in coming months amid coronavirus outbreak.
However, despite plunging returns of these banks, the deal is much better as weaker banks could have been at a risk in such an environment.
Also, Fitch Ratings lowered the credit rating of all major Australian banks namely NAB (ASX: NAB), Commonwealth Bank (ASX: CBA), ANZ (ASX: ANZ) and Westpac (ASX: WBC) to A+ from AA- due to the substantial impact the banks will face due to government measures to curb the virus spread.
Responding to Fitch’s decision, Westpac affirmed that it is well-capitalised, and the firm has fair buffer at the current mid-point.
Family Zone Cyber Safety Limited (ASX: FZO), a leader in global cyber safety, has posted significant growth to its education business in the US in the March quarter.
The firm has added 620 schools and 3,08,000 students to its e-learning platform in the March quarter 2020, ending it with a growth of 83% and 70% YOY in the total number of schools and students. The Company’s Premium parental control registered an increase of 120% YOY, reaching at 2,10,000 on 31 March 2020.
Source: Company’s Report
Coronavirus Aid, Relief and Economic Support (CARES) Act passed by the US Congress includes US$13.5 billion for online learning that is key to the firm’s US growth.
Australia based Carsales.com Limited (ASX: CAR) is an online marketplace with focus on motorcycle, automotive along with marine classifieds business.
The firm’s international business is resilient during the time of the volatile global economy amid coronavirus outbreak. Korea and Brazil business are experiencing continued growth in revenue and earnings. However, CAR withdrew its earnings guidance due to ambiguity in the Australian market requirements.
CAR believes its strong balance sheet and prudent gearing will support the firm in sailing through the current challenging atmosphere caused by COVID-19.
Hence, an investor can ponder over having a diverse mix of stocks in his portfolio to gain some immunity during the tough time of coronavirus affected economy.
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.