April Showers and Flowers: 4 Covid Vaccination Stocks to Buy and Sell

Covid Vaccination Stocks

So far, April is bringing rain to markets. Tech as well as reopening stocks are surging higher and making new highs. With vaccination rates rising, investors are looking at recovery plays and covid vaccination stocks that will benefit from a return to normal.

Though the TSX scaled fresh heights on April 1 and 5, fuelled by bank and oil stocks, the American economy remains the key driver of overall markets. Ever-increasing vaccinations in the States are adding jobs and propelling manufacturing activity. Canada’s vaccination rate remains embarassing low, but is finally showing signs of life. It should accelerate in April to battle the stronger, new Covid variants and, in turn, unleash consumer pent-up demand.

What follows are two picks and two sells to navigate this trading period with a focus on stocks that will benefit from the vaccine and reopening that we have named covid vaccination stocks.

Canada Goose (GOOS-T)

Canada’s luxury coat-maker had swooned even before Covid struck, and its recovery has been cautious since bottoming a year ago when the last thing people were buying were posh goods. Then, China recovered early, and now the States are coming to life. The brand has endured and is set to benefit as a covid vaccination stocks. GOOS is increasing its exposure across Asia by opening more stores in China and collaborating with Chinese designer Angel Chen on a new collection.

In early February, GOOS stock reported a blow-out beat of its Q3 revenues and profits, and shares popped nearly 30%. Much credit goes to its e-commerce channel, where online sales have jumped 39.3% in that quarter to allowed Canada Goose to post revenue growth for the first time during Covid. Keep in mind that GOOS had to close 25% of its stores during lockdowns and will benefit as a covid vaccination stock once shoppers can return to stores.

The worldwide march towards mass immunization offers GOOS stock a continuing tailwind to sail higher. The street agrees. Eight analysts rate it a buy and four more a hold as they target $62.28 or 23% upside. This amounts to a return of its 52-week high.

Ballard Power Systems (BLDP-T)

I own green energy, but don’t own this stock. Because a family member recommends it, I’ve been tracking it, but remain unconvinced that Ballard is little more than a speculative hydrogen fuel cell play that’s never made money. Its volatility scares me, with a beta of 1.83.

BLDP stock pays no dividend and the EPS is negative. The stock narrowly missed earnings in the last three of four quarters (the fourth was in-line). Ballard is a polarizing stock where the bulls see a 38% gain in these shares to nearly $42. Why not? BLDP stock jumped to $50 two months ago, but then slid to its current $30 range.

Maybe President Biden’s clean energy initiative will fuel Ballard. Maybe the growing ESG movement will attract more buyers. But where is the growth?

European Residential REIT (ERE.UN-X)

These days, REITs are split into two camps: residential (buy) and office/retail (don’t). ERE.UN stock falls into the former and is helmed by the same folks at CAP REIT, one I strongly recommend (and own, for disclosure’s sake). ERE.UN operates multi-family residential homes in crowded, rent-controlled Holland.

This translates into steady, though unspectacular growth. If you’re looking for Tesla gains, buy Tesla. If you want assured 4% annual growth plus the 3.81% dividend yield (held in a TFSA preferrably), then ERE.UN stock is it. This is ideal for seniors seeking income, for those who want to sleep at night, and those who want to balance their spec plays with a steady Eddy covid vaccination stock. Bay Street foresees nearly 10% upside at a $4.75 target, based on two buys and one hold. I agree.

Power Corp (POW-T)

Insurers will benefit whenever interest rates rise. When this happens is anyone’s guess, but likely not this year. Until then, there’s little to recommend POW stock, which I owned years ago. For the past five years, POW stock has traded within a strict range between, plunging to the mid/low-20s and rising to $33 which is its current level. In that time, POW stock’s EPS has been -$4.32%. Meanwhile, Power pays a safe 5.42% dividend based on a 71% payout ratio. That’s basically it.

If POW stocks were trading a few dollars lower, then buying it purely for the dividend could be justified, but at current highs, no. There isn’t much catalyst in terms of it being a covid vaccination stock either. Bottom line: the Desmarais family has done nothing to inspire investors.

POW won’t tank anytime soon, but it won’t soar either. If you want a Canadian financial that pays a dividend, then consider any of the big banks.