By Philip van Doorn, MarketWatch
Bloomberg
Investors are trying to get ahead of an eventual turnaround for the stock market, even as the coronavirus spreads further across the U.S.
Analysts at Jefferies have published a list of 47 stocks that they believe have “strong fundamentals” and attractive valuations, with opportunities created by “indiscriminate selling” over the past month. The largest of the recommended companies are listed below.
Warnings
Before getting to the list of “best stock ideas” from Jefferies, a number of warnings are in order:
• It’s too early to call a stock market bottom — it’s a fool’s errand.
• There have been comparisons to the 2008 financial crisis. However, the speed of the current economic disruption is breathtaking. The stock market hasn’t been able to digest the effect of the self-quarantining and business shutdowns. J.P. Morgan has estimated that U.S. gross domestic product will shrink at an annual rate of 14% during the second quarter. But we won’t see second-quarter economic reports and corporate earnings reports until July.
• For the week ended March 21, Goldman Sachs expects to see claims rise to a seasonally adjusted 2.25 million when the figures are released Thursday.
• Getting back to comparisons to the 2008 crisis, the S&P 500 Index /zigman2/quotes/210599714/realtime SPX +0.56% was down 32.4% from its intraday high Feb. 19 through the intraday low March 20 (excluding dividends), according to FactSet. That compares to a peak-to-trough decline of 57.3% from the intraday high on Oct. 11, 2007, until the intraday low March 9, 2009. With new COVID-19 infections still increasing rapidly, we may be nowhere near the bottom.
The Jefferies list
The analysts at Jefferies listed 47 buy-rated stocks across all sectors as “best ideas” in a report March 16 titled, in part, “Practically Stealing.” It was included in the firm’s “Picturing the Week’s Opportunities” report March 21.
The analysts selected “high-quality names that investors would want to own across a cycle — great companies that have strong business models, healthy cash flow and very robust balance sheets,” according to the report.
Here are the 15 largest companies by market capitalization of those 47:
| Company | Ticker | Total return - Feb. 19 through March 20 | Total return - 2020 | Total return - 2019 | Dividend yield | Market cap. ($ billions) |
| Amazon.com Inc. | /zigman2/quotes/210331248/composite AMZN | -15% | 0% | 23% | 0.00% | $919 |
| Visa Inc. Class A | /zigman2/quotes/203660239/composite V | -31% | -22% | 43% | 0.82% | $250 |
| Home Depot Inc. | /zigman2/quotes/208081807/composite HD | -37% | -30% | 31% | 3.94% | $166 |
| Cisco Systems Inc. | /zigman2/quotes/209509471/composite CSCO | -23% | -25% | 14% | 4.04% | $151 |
| Adobe Inc. | /zigman2/quotes/200389143/composite ADBE | -23% | -10% | 46% | 0.00% | $143 |
| Nvidia Corp. | /zigman2/quotes/200467500/composite NVDA | -35% | -13% | 77% | 0.31% | $126 |
| Abbott Laboratories | /zigman2/quotes/203724446/composite ABT | -24% | -21% | 22% | 2.12% | $120 |
| Chevron Corp. | /zigman2/quotes/205871374/composite CVX | -46% | -50% | 15% | 8.69% | $112 |
| McDonald's Corp. | /zigman2/quotes/203508018/composite MCD | -31% | -24% | 14% | 3.37% | $111 |
| Gilead Sciences Inc. | /zigman2/quotes/210293917/composite GILD | 10% | 14% | 8% | 3.71% | $93 |
| Linde PLC | /zigman2/quotes/207314668/composite LIN | -32% | -29% | 39% | 2.55% | $81 |
| Mondelez International Inc. Class A | /zigman2/quotes/201769764/composite MDLZ | -27% | -21% | 40% | 2.63% | $62 |
| British American Tobacco PLC | /zigman2/quotes/209116881/delayed UK:BATS | -24% | -21% | 38% | 8.28% | $58 |
| ServiceNow Inc. | /zigman2/quotes/202729495/composite NOW | -29% | -10% | 59% | 0.00% | $48 |
| Source: FactSet | ||||||
You can click on the tickers for more about each company.
You have to scroll the chart to the right to see all the data, which includes dividend yields.
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AMZN
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CSCO
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ADBE
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NVDA
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ABT
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CVX
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MCD
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GILD
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LIN
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MDLZ
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UK:BATS
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NOW
