MY comments: don't agree with 1) become Amazon has a lot of other business that Ali doesn't have. No familiar with 2) and 3). Don't agree with 4) and don't want to buy both as there are different digital payment methods and banks don't make money with close to zero interest rate.Don't agree with 5) as both will not be good in COVID-19 time period.
1. Buy Alibaba, not Amazon
Global growth in e-commerce was already well underway before
coronavirus pandemic created an even bigger tailwind for this megatrend.
But if you think Amazon.com Inc.
AMZN,
-0.12%
is the only online game in town, think again.
Alibaba Group Holding
BABA,
1.45%
is plotting 30% revenue growth this fiscal year and another 25%
growth next year — figures that top the admittedly impressive growth of
Amazon. Furthermore, while Western nations continue to wring their hands
over the influence of Big Tech, with President Trump and the European Union finding a rare issue of agreement as they take aim at Amazon, Alibaba remains quite cozy with the Chinese government and carries much lower political risk.
2. Buy Regeneron, not Big Pharma
In times of uncertainty, megacap healthcare stocks get a lot of
attention as recession-proof investments. After all, people will cut
back on just about any other expense before they stop buying the
medicine that keeps them healthy.
3. Buy Cheniere, not Haliburton
After oil tumbled into the low $20s this spring — and briefly even saw prices go negative
thanks to storage issues — it looked like energy stocks were done. But
now oil is back in the high $30s and bargain hunters are rummaging
through the oil patch on hopes of a rebound. The logic (if it can be
called that) is that oil servicers such as Haliburton Company
HAL,
2.01%
and Schlumberger
SLB,
1.33%
are natural beneficiaries as energy companies start spending again and resume production in earnest.
That strategy may work as a swing trade, as Schlumberger is up
about 60% from its March lows and Haliburton has surged almost
three-fold from the low $4 range to back over $12 a share. However,
depending on this run to continue seems a dangerous strategy.
4. Buy Visa, not Wells Fargo
The stock market rebound is partly due to optimism that the admittedly steep job losses
this spring will quickly be reversed as the U.S. economy begins to
reopen in earnest. So what better way to play this recovery than via
financial stocks?
Wells Fargo & Co.
WFC,
5.96%
has started to attract some attention among bargain hunters, as
the $110 billion bank looks to turn the page on past missteps over the
last few years with a new CEO and new structure,
including a dedicated focus on small businesses. Trading at less than
70% of its book value, this stock seems quite interesting to many right
now.
5. Buy Nike, not Campbell Soup
As quarantine life forces people to cook at home, shares of Campbell Soup Company
CPB,
-4.44%
have surged an impressive 25% from the March lows. Yet this
short-term trend can't counteract the longer-term challenges that have
been holding this stock back — namely, an aging brand lineup that
doesn't connect with younger consumers at all.
Campbell Soup has made a few big moves in the last year or two,
including unloading international businesses to pay down debt and fund
the acquisition of North American snack food brand Snyder's-Lance.
But that's not a long-term plan for growth, and neither is depending on
coronavirus to keep people buying your products instead of dining out.
In stark contrast to Campbell is Nike Inc.
NKE,
2.58%
, a sports behemoth with one of the most valuable brands on the
planet. The stock not only has a powerful name but a powerful and
growing online presence that allows it to sell directly to consumers and
enjoy juicy margins. When you consider that Nike’s March earnings
report boasted 36% year-over-year growth in its digital sales model, it's easy to understand the potential here.
