In this article, we discuss the 10 Best COVID Stocks To Buy Now.
Covid-19 crushed almost every sector, resulting in the world economy shrinking by 3.2% in 2020. In the initial stages of the pandemic, its long-term detrimental effects were uncertain, leaving everyone unprepared. With travel restrictions and lockdowns, many sectors suffered heavy losses and are still struggling to recover from the ills of the pandemic.
According to a report by World Travel & Tourism Council, in 2020, travel and tourism accounted for 5.5% of the global GDP, down from 10.4% in 2019.
However, to say that the market suffered a complete blowout would be an overstatement, as there were sectors that thrived during the pandemic. Technology remained the winner, exhibiting its ability to adapt to the new normal. According to a report by Morningstar, 45% of the workers reported that they worked from home in 2020, compared with 9% in 2019. Big tech companies like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) gained over 30% in 2020, as mentioned by Wall Street Journal. Similarly, the pharmaceutical industry also gained during the pandemic owing to its position in the crisis. The vaccine market worth $35 billion remained the key player in the pharma sector.
According to a paper published by Brookings Institution, the national GDP returned to its pre-pandemic level in the second quarter of 2021, growing at 6%, compared to 4.8% in the third quarter of 2020. However, the concerns surrounding another lockdown due to delta variant are still hovering over the investors, who look for safe options in case of another disruption. In this list, we mention some of the companies that performed well during the pandemic in 2020 and still have prospects to grow. Some of the most notable Covid stocks include Netflix, Inc. (NASDAQ:NFLX), Johnson & Johnson (NYSE:JNJ), Adobe Inc. (NASDAQ:ADBE), and Pfizer Inc. (NYSE:PFE).
Photo by National Cancer Institute on Unsplash
Our Methodology:
Let’s analyze our list of the best Covid stocks to buy now. We took into account hedge fund sentiment, analysts’ ratings, long-term growth potential, and fundamentals while choosing these stocks.
Why pay attention to hedge fund sentiment while choosing stocks?
Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best COVID Stocks To Buy Now
10. Fiverr International Ltd. (NYSE:FVRR)
Number of Hegde Fund Holders: 30
Fiverr International Ltd. (NYSE:FVRR) ranks tenth on our list of the best Covid stocks to buy now. As the pandemic opened doors to freelance work, 45% of the businesses are using more freelancer talent than before the crisis. This resulted in the share price of Fiverr International Ltd. (NYSE:FVRR) jumping from $22.94 per share in April 2020 to $211.56 per share in December 2020.
In Q2 2020, Fiverr International Ltd. (NYSE:FVRR) reported a 43% year-over-year increase in active buyers at 4 million. The company posted an EPS of $0.19, beating the estimates by $0.05. Recently, the Royal Bank of Canada set a Sector Perform rating on Fiverr International Ltd. (NYSE:FVRR) with a $195 price target.
As of Q2, 30 hedge funds tracked by Insider Monkey reported having stakes in Fiverr International Ltd. (NYSE:FVRR), up from 27 in the previous quarter. The total worth of these stakes is $465.6 million.
Baron Funds mentioned Fiverr International Ltd. (NYSE:FVRR) in its Q1 2021 investor letter. Here is what the firm has to say:
“We sold out of Fiverr International Ltd., the marketplace for freelance services, since the stock ran up multiple fold since our purchase less than a year ago and traded at a valuation that we thought captured much of the future opportunity.”
9. Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Holders: 37
Moderna, Inc. (NASDAQ:MRNA) was one of the very first companies to develop a Covid-19 vaccine and enrolled over 30,000 participants in its Phase 3 study of the vaccine candidate. Moderna, Inc. (NASDAQ:MRNA), an American biotech company, gained 379.3% in the past year. The company is expected to gain much due to the rollout of the Covid booster shots, which makes it one of the best Covid stocks to buy now.
Coatue Management is the leading shareholder of Moderna, Inc. (NASDAQ:MRNA) in Q2, with shares worth $1.4 billion. Overall, 37 hedge funds in the Insider Monkey database reported owning stakes in the company, compared with 39 in the previous quarter. The total worth of these stakes is over $5.75 billion.
In October, Piper Sandler upgraded Moderna, Inc. (NASDAQ:MRNA) to Overweight, with a $445 price target.
Carillon Tower Advisers mentioned Pfizer Inc. (NYSE:PFE) in its Q2 2021 investor letter. Here is what the firm has to say:
“Moderna is a biotechnology company pioneering messenger RNA (mRNA) therapeutics and vaccines. The stock outperformed in the quarter, as the firm’s COVID-19 vaccine has shown effectiveness against the emerging variants of the disease, specifically the now prevalent Delta variant. The potential need for additional booster shots of the vaccine to maintain longer-term immunity as well as protection against possible future variants is also contributing to the stock’s move higher.”
8. Penn National Gaming, Inc. (NASDAQ:PENN)
Number of Hedge Fund Holders: 40
As sports betting generated over $1.5 billion in 2020, up 69% from 2019, Penn National Gaming, Inc. (NASDAQ:PENN) gained attention among investors. This American casino company has also expanded its online sports betting segment and expects to generate steady income from this. Penn National Gaming, Inc. (NASDAQ:PENN) stands eighth on our list of the best Covid stocks to buy now.
According to a research report, the global sports betting industry is expected to reach $173.9 billion by 2028, which presents tremendous growth opportunities for Penn National Gaming, Inc. (NASDAQ:PENN). Recently, Morgan Stanley resumed its coverage on Penn National Gaming, Inc. (NASDAQ:PENN) with an Equal Weight rating and an $85 price target. The firm’s analyst, Thomas Allen noted the company’s 10% market share in the U.S. and Canada iGaming and sports betting segment.
Of the 873 hedge funds tracked by Insider Monkey, 40 hedge funds had stakes in Penn National Gaming, Inc. (NASDAQ:PENN) in Q2, down from 42 in the previous quarter. The total worth of these stakes is over $1 billion.
Carillon Tower Advisers mentioned Penn National Gaming, Inc. (NASDAQ:PENN) in its Q2 2021 investor letter. Here is what the firm has to say:
“Penn National Gaming is a diversified omnichannel provider of retail and online gaming, live racing, and sports betting entertainment. After a substantial run, Penn National Gaming sold off during the quarter, reflecting a profit taking in a number of sports and online gambling stocks. However, fundamentals are healthy in firm’s regional gaming markets and its sports betting initiatives remain strong.”
7. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 48
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) presented a positive hedge fund sentiment in Q2, as 48 hedge funds tracked by Insider Monkey reported owning stakes in the company, up from 39 in the previous quarter. The total value of these stakes is over $1.5 billion. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), one of the best Covid stocks, gained 34.1% in 2021.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), a biotech company, reported its Q3 results on November 4. The company posted an EPS of $15.37, beating the estimates by $5.43. Its respiratory drug, Dupixent, was a widely used during the pandemic, generating $1.5 billion in revenue in the first quarter of 2021. Recently, Piper Sandler lifted its price target on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) to $690, with an Overweight rating on the shares. The firm’s analyst noted the importance of Dupixent in the post-Covid era.
6. Bath & Body Works, Inc. (NYSE:BBWI)
Number of Hedge Fund Holders: 53
Jim Cramer called Bath & Body Works, Inc. (NYSE:BBWI) a Covid-proof stock as the company witnessed tremendous growth due to the sanitizers and soaps sales during the pandemic. The sales are expected to surge due to the concerns surrounding the delta variant, making Bath & Body Works, Inc. (NYSE:BBWI) one of the best Covid stocks to buy now.
As of Q2, 53 hedge funds tracked by Insider Monkey reported owning stakes in Bath & Body Works, Inc. (NYSE:BBWI), compared with 59 in the previous quarter. The total worth of these stakes is over $6.3 billion. Lone Pine Capital is the company’s leading shareholder, with shares worth $1.89 billion.
Recently, BofA named Bath & Body Works, Inc. (NYSE:BBWI) as a well-positioned company to benefit from the upcoming holiday season as the company has shown consistent growth over the years. Since the beginning of the year, Bath & Body Works, Inc. (NYSE:BBWI) delivered a 115.7% return to shareholders, while its 12-month returns stood at 152.01%.
Bath & Body Works, Inc. (NYSE:BBWI) is also one of the notable stocks like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), Johnson & Johnson (NYSE:JNJ) , Adobe Inc. (NASDAQ:ADBE), and Pfizer Inc. (NYSE:PFE).
5. Pfizer Inc. (NYSE:PFE)
Number of Hegde Funds: 67
Pfizer Inc. (NYSE:PFE), an American biotech company, benefitted a lot from its vaccinations as the company’s vaccine revenue stood at $7.8 billion in the second quarter of 2021. Moreover, the company expects to develop over 3 billion vaccine doses by the end of this year as it showed 91% efficacy in children, making it one of the best Covid stocks to buy now.
Pfizer Inc. (NYSE:PFE) pays an annual dividend of $1.56 per share to shareholders, yielding 3.66%. The company has a track record of 12 years of consistent dividend growth. Recently, Matthew Harrison of Morgan Stanley raised its price target on Pfizer Inc. (NYSE:PFE) to $48, while keeping an Equal Weight rating on the shares.
The number of hedge funds tracked by Insider Monkey having stakes in Pfizer Inc. (NYSE:PFE) increased to 67 in Q2, from 65 in the previous quarter. The total worth of these stakes is over $2.35 billion.
ClearBridge Investments mentioned Pfizer Inc. (NYSE:PFE) in its Q1 2021 investor letter. Here is what the firm has to say:
“Our underweights in health care and staples contributed to relative performance during the period. As we continue to focus the portfolio on high-conviction ideas, we sold Pfizer in late 2020, in the health care sector.”
4. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 88
Johnson & Johnson (NYSE:JNJ), an American healthcare company, saw its sales boost during the pandemic, fueled by its Covid-19 vaccine. In Q2, the company presented a positive hedge fund sentiment, as 88 hedge funds in the Insider Monkey’s database have positions in Johnson & Johnson (NYSE:JNJ), up from 81 in the previous quarter. The total worth of these stakes is over $7.05 billion. The company’s health care products and single-shot Covid-19 vaccines will hold it in good stead in the post-pandemic world.
In Q3 2021, Johnson & Johnson (NYSE:JNJ) reported revenue of $23.3 billion, up 11% from the same period last year. Vaccine revenue accounted for $503 million of the gross revenue. On October 21, Johnson & Johnson (NYSE:JNJ) declared a quarterly dividend of $1.06 per share, yielding 2.6%.
Recently, Baird lifted its price target on Johnson & Johnson (NYSE:JNJ) to $370, with an Outperform rating on the shares. The stock gained 12.48% in the past year.
Distillate Capital mentioned Johnson & Johnson (NYSE:JNJ) in its Q2 2021 investor letter. Here is what the firm has to say:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
3. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 89
Cloud and computer software company Adobe Inc. (NASDAQ:ADBE) didn’t face any disruption due to the pandemic. It was widely used for content creation, with a 50% increase in the number of PDF documents shared using Adobe’s software in Q1 2020. With the boom in remote working, Adobe Inc. (NASDAQ:ADBE) will benefit from various fields, making it one of the best Covid stocks to buy now.
This September, Piper Sandler lifted its price target on Adobe Inc. (NASDAQ:ADBE) to $670, with an Overweight rating on the shares.
As of Q2, 89 hedge funds tracked by Insider Monkey reported owning stakes in Adobe Inc. (NASDAQ:ADBE), down from 107 in the previous quarter. The total value of these stakes is over $13 billion.
Richie Capital Group mentioned Adobe Inc. (NASDAQ:ADBE) in its second-quarter 2021 investor letter. Here is what the firm has to say:
“Adobe Systems (ADBE – up 24.8%) – In the last 15 years, Adobe has transformed itself into a software behemoth, more than tripling its revenue since 2010. The company is famous for its namesake PDF-reader and photo-editing software Photoshop. However, ADBE sells a full suite of software products through a recurring subscription model. The company transitioned from selling boxed software to recurring subscriptions in 2013 and revenues have grown consistently since. The company achieved $13B in revenue in 2020 with 88% Gross Margins.”
2. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Funds: 113
In the first three months of 2020, Netflix, Inc. (NASDAQ:NFLX), an American online digital media services company, gained over 16 million subscribers due to the lockdown. The stock soared 36.01% in the past year.
As the company’s subscription growth slows down, it’s exploring new revenue streams, such as gaming.
Smart money is also taking interest in Netflix, Inc. (NASDAQ:NFLX) in Q2, as 113 hedge funds tracked by Insider Monkey reported owning stakes in the company, up from 110 in the previous quarter. The total value of these stakes is over $13.2 billion.
Netflix, Inc. (NASDAQ:NFLX) announced its Q3 results on October 19, with a GAAP EPS of $3.19, beating the consensus by $0.63. The company reported global streaming paid memberships at 213.56 million, versus the estimates of 209.1 million. Recently, Cowen lifted its price target on Netflix, Inc. (NASDAQ:NFLX) to $750, with an Outperform rating on the shares.
Ensemble Capital mentioned Netflix, Inc. (NASDAQ:NFLX) in its recently published Q3 2021 investor letter. Here is what the firm has to say:
“Netflix stock had a disappointing first half of 2021 performance, treading water while the S&P 500 rallied, after a very strong 67% return in 2020. It benefited from the global pandemic in 2020, signing on 36.6 million new subscribers vs the typical 25 million or so it typically does. Total subscribers exceeded 200 million, up 22% over the previous year. However, in the first half of 2021, new subscriber additions slowed substantially, totaling only 5.5 million due to slower new content additions impacted by production delays, a resumption of outdoor activity as people everywhere adjusted to living with COVID, and the impact of a “pull-forward effect” on subscriber growth in last year’s very strong results. The third quarter saw new content velocity start to pick up, which is usually what drives new subscribers to the service, with expectations of an even stronger content slate going into the final quarter of the year, causing the stock to increase 15% in the quarter.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
American technology and e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN) gained the hedge fund industry’s attention in Q2, as the number of hedge funds tracked by Insider Monkey owning stakes in the company reached 271, up from 243 in the previous quarter. The total value of these stakes is over $60.4 billion. The digital sales at Amazon.com, Inc. (NASDAQ:AMZN) are expected to grow in the post-pandemic era as the consumers’ shift towards online shopping has been witnessed.
The company reported an 862% year-over-year growth in cough and cold medicine sales between February and March 2020. This October, Baird lifted its price target on Amazon.com, Inc. (NASDAQ:AMZN) to $4,000, while keeping an Outperform rating on the shares.
Madison Funds mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter. Here is what the firm has to say:
“We did add a modest new position weight to the portfolio in the quarter in Amazon.com, Inc. stock (AMZN). We acknowledge that many aspects of Amazon’s merit as an investment are well appreciated. However, our work leads us to conclude that shares are attractive. Leadership positions in both e-commerce and cloud computing provide the company with significant durable competitive advantages in industries that we think can produce above average growth over the next decade. Over the past year, AMZN shares have trailed the market as investors debate near-term growth prospects following the pandemic-induced e-commerce demand. Additionally, margins have been depressed due to Amazon’s unprecedented increases in spending to build out fulfillment and in-house logistics capabilities – Amazon will build out more square footage this year and last than it did cumulatively over the previous 10 years, more than doubling its in-house delivery capacity. We like the investments Amazon is making and believe they will further advantage the company relative to other retailers, making it nearly impossible for competitors to match the same level of delivery speed and convenience. With its large and frequently engaged customer base, Amazon has multiple mechanisms to make money, including selling advertising and enhanced subscription services. Within the cloud business, we forecast Amazon Web Services (AWS) leveraging its strengths in Infrastructure-as-a-service (IaaS) to move into higher value segments of cloud computing (such as platform-as-a-service: PaaS), allowing the company to continue outgrowing the overall IT sector with strong profitability. While Amazon shares have performed extremely well over the long-term, we think near-term concerns about whether Amazon will earn a return on its accelerated investments provide an opportunity now for investors willing to look through the investment period. Our view is that the investments likely earn strong returns and extend Amazon’s competitive advantages and aboveaverage growth.”
You can also take a look at 10 Best-Performing Countries for COVID-19 Vaccinations and 15 Companies That Benefitted The Most From The Pandemic
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Disclosure. None. 10 Best COVID Stocks To Buy Now is originally published on Insider Monkey.
