The effects of the coronavirus outbreak have been dire throughout the U.S. economy. About 16.8 million Americans filed for unemployment benefits in the three weeks that ended April 4, a record pace of job loss several times over. The S&P 500 index of large companies fell 20 percent in the first quarter of 2020, and all of its 11 sectors dropped by double digits — even the least hard-hit, information technology, was down 12 percent. Energy stocks lost half their value.
And yet a few companies will emerge stronger from the crisis than they went in. Even in the disastrous first quarter, 30 of the 500 stocks measured in the S&P went up. These firms are either positioned to meet the needs of the pandemic economy or have the resources to outlast competitors that will be more brutally affected, and some are at the forefront of efforts to prevent, cure, or mitigate COVID-19. Here, six companies doing the best right now in the race to win the pandemic.
6. J.M. Smucker Co.
Restaurants and bars across America are closed, but people are still eating, and that has been good for the fortunes of companies like Smucker that make packaged food for the retail market. “As you know, we have experienced unprecedented demand for peanut butter,” the Jif manufacturer said in a letter to retailers on March 19, explaining why it would not always be able to fulfill orders for the brand on time or in full. The letter had better news about coffee, which Smucker sells under labels including Folgers and Dunkin’ Donuts. With production at or near capacity, it was able to meet the rising call for coffee to brew at home. Smucker stock is up more than 8 percent this year. Thriving for similar reasons: processed-meat-maker Hormel and national supermarket chain Kroger.
As tens of millions of Americans have suddenly started working from home, the coronavirus crisis has provided opportunities to companies that sell remote–working technology, and Citrix is one of the biggest players in that space. Its stock is up nearly 26 percent this year. Citrix is doing so well it may even bring down a senator: Georgia’s Kelly Loeffler has come under criticism because she and her husband sold extensive holdings in the weeks following a closed Senate briefing on the coronavirus — and bought stock in Citrix. (Loeffler said she doesn’t make her own investing decisions and will now liquidate all her individual holdings.) Thriving for similar reasons: Zoom, the video-conference service now used by millions of workers who are naked from the waist down.
It’s hard to think of a non-pharmaceutical product more boosted by a pandemic than bleach. Clorox makes about half the disinfectant wipes used in the U.S., and retailers have been struggling to keep them on the shelves. Clorox also has an advantage over other makers of consumer packaged goods: While Procter & Gamble has warned investors that an economic downturn owing to coronavirus could cause shoppers to trade down to cheaper, lower-margin brands of products like detergent, Clorox benefits from consumers’ desire for a known, trusted name when trying to kill the virus. It doesn’t hurt that Clorox has a sideline in packaged foods similar to those Smucker sells; if you buy Hidden Valley Ranch dressing or KC Masterpiece sauce, you’re buying a Clorox product.
When you can’t go out to shop, you shop online, and Amazon has been adding staff to handle increased order volume as department stores like Nordstrom and Macy’s are closing all their locations. Still, Amazon is a general-merchandise retailer and is likely finding this crisis to be a mixed bag for the same reason its competitors Walmart and Target are — consumers are spending more on low-cost, low-margin necessity goods like toilet paper and less on higher-margin items like clothing. But Amazon’s other core business, cloud computing, is really shining. More activity moving online means more demand for cloud server space. Thriving for similar reasons: cloud service provider Akamai Technologies and data-center owners Equinix and Digital Realty Trust.
Widespread stay-at-home orders could not have come at a better time for Netflix. The streaming-entertainment company had been under serious pressure from competitors; Disney and Apple launched streaming services that stole its market share, and NBC and WarnerMedia expect to be close behind. In addition to poaching customers, some of these companies have been withdrawing content once licensed to Netflix to use for their own platforms. But now, with everyone stuck at home, no live sports on TV, and many shows unable to continue production, customers are less inclined to cancel Netflix and more likely to appreciate its deep back catalogue. The mass popularity of Tiger King doesn’t hurt. Thriving for similar reasons: video-game-maker Activision Blizzard.
1. Regeneron Pharmaceuticals
While Trump talks up hydroxychloroquine, a generic anti-malarial of unproven efficacy for treating COVID-19 (with significant side effects), former FDA commissioner Scott Gottlieb says certain anti-viral and antibody drugs in development and testing will be our best bets for fighting the coronavirus before a vaccine is available. Regeneron developed antibody drugs that boost the immune system to help combat Ebola and MERS, and the company says it should have one against the coronavirus ready for human trials early this summer. Gottlieb is hopeful about that, and so are investors; Regeneron stock is up nearly 37 percent this year. Thriving for similar reasons: Gilead Sciences, which makes remdesivir, an anti-viral being tested for effectiveness against coronavirus in China (results are expected in May).
*This article appears in the April 13, 2020, issue of New York Magazine. Subscribe Now!