Road to Recovery: Stock Hotlist for The Week of April 20th, 2020

Markets roared higher last week on news Gilead’s (GILD) coronavirus drug produced “rapid” recovery in patients. In fact, a University of Chicago Phase 3 drug trial found that most of its patients had “rapid recoveries in fever and respiratory symptoms” and were then discharged from the hospital in less than a week, as reported by CNBC.  

“An effective treatment is a huge deal and would create a path to open the economy and resume normal ‘social activities’ way sooner than a vaccine,” said Tom Lee, head of research at Fundstrat Global Advisors, as also quoted by CNBC. “A treatment is safer and more scalable because it is only given to people who need to be treated.”

With 2.17 million global cases, and 146,071 unfortunate deaths, this welcomed news could put us one step closer to finding a solution.

However, Gilead wasn’t the only vaccine stock with big, market-driving news.  

Gilead isn’t the only vaccine stock surging on COVID-19 news, though.

Shares of Moderna (MRNA) are racing higher after winning an $843 million U.S. award to develop a vaccine.  “By investing now in our manufacturing process scale-up to enable large scale production for pandemic response, we believe that we would be able to supply millions of doses per month in 2020 and with further investments, tens of millions per month in 2021, if the vaccine candidate is successful in the clinic,” commented CEO Stéphane Bancel.

As we wait to see what happens next, here are top stocks piquing our interest.

Opportunity No. 1 – Zynga (ZNGA)

As governments around the world encourage social distancing to slow the spread of the coronavirus, video game stocks have been some of the top beneficiaries.  “Videogames could see increased engagement as folks fight off cabin fever. Online gaming often includes voice chat, a way friends can keep in touch and hang out virtually amid self-quarantines. Anecdotally, increased network data from Telecom Italia, suggesting such increased online use in Italy. Plus, as Americans avoid vacations, dining out and attending events, they will have more money to spend on videogames and their digital add-ons,” says Cowen analysts, as quoted by Barron’s.

Opportunity No. 2 — Slack Technologies Inc. (WORK)

Slack is one of the top companies benefiting as people work from home at the moment.  While it hasn’t seen the same upside Zoom Video Communications has seen, it’s still pushing higher.  Cantor Fitzgerald analysts also just covered the stock with an overweight rating. “We believe the company and platform have a number of unique, positive attributes, including its ability to drive customer productivity and efficiency, applicability across all industries and business sizes, and a growing ecosystem to facilitate seamless integration,” notes the firm, as quoted by Barron’s. “We expect these attributes to lead to increased market penetration and margin.”

Opportunity No. 3 – Moderna Inc. (MRNA)With a vaccine under development, as noted above, MRNA could run to $55, near-term.  As reported by FierceBiotech, “If all goes well, Moderna aims to start a phase 2 study of the vaccine in the second quarter, with a phase 3 study that could begin ‘as soon as fall, 2020.’ The company plans to scale up manufacturing of the vaccine this year.”

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