{"id":173601,"date":"2020-06-09T20:20:30","date_gmt":"2020-06-09T20:20:30","guid":{"rendered":"https:\/\/stockchase.com\/discover\/?p=173601"},"modified":"2020-06-09T20:20:30","modified_gmt":"2020-06-09T20:20:30","slug":"covid-rally-stocks","status":"publish","type":"post","link":"https:\/\/stockchase.com\/discover\/covid-rally-stocks\/","title":{"rendered":"Covid Stock Rally : Top 3 Stocks to Buy on Weakness"},"content":{"rendered":"<p><span lang=\"en-CA\"> A month ago, I would have been crazy to write a column recommending stocks to buy on a pullback. How things have changed in a short time. The Nasdaq and Dow have returned to pre-lockdown levels while the TSX is reaching for 16,000. It&#8217;s Covid Stock Rally time.<\/span><\/p>\n<p><span lang=\"en-CA\">Driving this optimism are countries and cities around the world as the number of Covid-19 cases declines. On Monday this week, the epicentre, New York City, began to reopen, while New Zealand completely reopened after declaring itself free of Covid-19. Further encouraging investors were <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.bbc.com\/news\/business-52938993\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">May&#8217;s unemployment numbers<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\">, which came in far better than expectated (though still harsh at over 13% unemployment in Canada and the U.S.). <\/span><\/p>\n<p><span lang=\"en-CA\"> So, the rally continues though no one is ruling out volatility ahead. (Tuesday morning saw profit taking.) <\/span>Tech, staples, energy and financials have already enjoyed a revival and now even the battered airlines are soaring. Where does that leave buyers? As incredible as it sounds, it&#8217;s time to consider buying stocks on a <span lang=\"en-CA\"><i>pullback.<\/i><\/span><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-173743\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/06\/ECL-N-1-760x254.jpg\" alt=\"Top Covid Rally Stocks : Ecolab\" width=\"860\" \/><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Discover What&#039;s Inside<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/stockchase.com\/discover\/covid-rally-stocks\/#Top_Covid_Rally_Stocks_1_Ecolab_ECL-N\" >Top Covid Rally Stocks : #1\u00a0 Ecolab (ECL-N)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/stockchase.com\/discover\/covid-rally-stocks\/#Top_Covid_Rally_Stocks_2_Savaria_SIS-T\" >Top Covid Rally Stocks : #2 Savaria (SIS-T)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/stockchase.com\/discover\/covid-rally-stocks\/#Top_Covid_Rally_Stocks_3_Mondelez_International_MDLZ-Q\" >Top Covid Rally Stocks : #3 Mondelez International (MDLZ-Q)<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Top_Covid_Rally_Stocks_1_Ecolab_ECL-N\"><\/span>Top Covid Rally Stocks : #1\u00a0 Ecolab (ECL-N)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"ECL-N stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/ECL-N\/chart?labels=tru\" width=\"125\" align=\"right\" \/><\/p>\n<p><span lang=\"en-CA\">You may recognize this name from its hand sanitizers. Indeed, <a href=\"https:\/\/stockchase.com\/ECL-N\">Ecolab<\/a> supplies the healthcare, government, education and retail industries with specialized cleaning products. The company also helps keep manufacturing, food and beverage, chemical, mining and power generation companies clean. Big customers include <a href=\"https:\/\/stockchase.com\/WMT-N\">Walmart<\/a>, <a href=\"https:\/\/stockchase.com\/KO-N\">Coca-Cola<\/a>, <a href=\"https:\/\/stockchase.com\/UN-N\">Unilever<\/a> and <a href=\"https:\/\/stockchase.com\/MCD-N\">McDonald<\/a>&#8216;s. Lately, <a href=\"https:\/\/stockchase.com\/ECL-N\">Ecolab<\/a> received <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/finance.yahoo.com\/news\/ecolabs-advacare-disinfectant-receives-first-132501762.html\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">EPA approval for a new anti-Covid disinfectant<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> that commercial and industrial laundries can use.<\/span><\/p>\n<p lang=\"en-CA\">At the start of the pandemic, <a href=\"https:\/\/stockchase.com\/ECL-N\">Ecolab<\/a> stock tanked like so many, but since the March 23 trough, <a href=\"https:\/\/stockchase.com\/ECL-N\">ECL<\/a> has nearly doubled from $125. Currently, it trades at 52-week highs around $225 and trades over 37x earnings. As places continue to reopen, <a href=\"https:\/\/stockchase.com\/ECL-N\">Ecolab<\/a> may be hover around this level, but I doubt that demand for its products will decrease anytime soon. Healthy habits have been entrenched in the last three months and won&#8217;t disappear anytime soon. Though Covid-19 cases are declining, you will be greeted by more of those <a href=\"https:\/\/stockchase.com\/ECL-N\">Ecolab<\/a> hand sanitizer bottles at store entrances during the reopening.<\/p>\n<p><span lang=\"en-CA\"> Further, if there was a second wave of cases, then <a href=\"https:\/\/stockchase.com\/ECL-N\">Ecolab<\/a> would be a serious candidate to buy on a dip. In any case, 90% of its revenues come from recurring sources, so that offers stability. <a href=\"https:\/\/stockchase.com\/ECL-N\">Ecolab<\/a>&#8216;s profit margin is 10.46% and boasts a one-year return of 14.38%. and 101% over five years. Though <a href=\"https:\/\/stockchase.com\/ECL-N\">Ecolab<\/a> pays only an 0.82% dividend, it has raised it for 25 straight years. Lastly, <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.startribune.com\/bill-gates-investment-firm-ups-its-ownership-in-ecolab\/476699613\/\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">Bill Gates<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> owns more than 10% of this company.<\/span><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-173745\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/06\/SIS-T-1-760x254.png\" alt=\"Top Covid Rally Stocks : Savaria\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Top_Covid_Rally_Stocks_2_Savaria_SIS-T\"><\/span>Top Covid Rally Stocks : #2 Savaria (SIS-T)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"SIS-T stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/SIS-T\/chart?labels=tru\" width=\"125\" align=\"right\" \/><\/p>\n<p><span lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/SIS-T\">Savaria<\/a> builds elevators in the homes of seniors who can&#8217;t climb stairs. This stock is a play on the current scandal surrounding long-term care homes. <\/span><\/p>\n<p><span lang=\"en-CA\">Specifically, <a href=\"https:\/\/stockchase.com\/SIS-T\">Savaria<\/a> is a reaction against the scathing report by the Canadian army detailing the appalling conditions of five long-term care facilities (LTCs or retirement homes) where our soldiers served at the depth of the pandemic. Specifically, <a href=\"https:\/\/stockchase.com\/SIA-T\">Sienna Senior Living<\/a> is facing <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.cp24.com\/news\/20m-class-action-lawsuit-filed-against-scarborough-long-term-care-home-that-was-part-of-military-report-1.4964609\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">two class-action lawsuits<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\">, and a <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.newswire.ca\/news-releases\/leaked-audio-recording-reveals-nothing-has-changed-at-sienna-senior-living-corporation-825612010.html\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">top executive has been fired<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> for allegedly ridiculing those claims. (Needless to say, <a href=\"https:\/\/stockchase.com\/SIA-T\">Sienna<\/a> is <\/span><span lang=\"en-CA\"><i>not <\/i><\/span><span lang=\"en-CA\">a stock recommendation). Demographics work in <a href=\"https:\/\/stockchase.com\/SIS-T\">Savaria<\/a>&#8216;s favour as our population ages and become less and less mobile. The company has met or beat three of its last four earnings reports. Since the March 23 market bottom, <a href=\"https:\/\/stockchase.com\/SIS-T\">Savaria<\/a> has soared twice as far as the TSX, up 60%. <\/span><\/p>\n<p><span lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/SIS-T\"> Savaria<\/a> is no slam-dunk, however. Last year&#8217;s numbers disappointed in the wake of some acquisitions that the company had trouble integrating. Those troubles appear to be behind them now, and even detractors, such as analyst <a href=\"https:\/\/stockchase.com\/expert\/view\/15\/Gavin-Graham\">Gavin Graham<\/a>, applaud <a href=\"https:\/\/stockchase.com\/SIS-T\">Savaria<\/a>&#8216;s performance over the last five years. Though its three-year return is -19.55%, <a href=\"https:\/\/stockchase.com\/SIS-T\">Savaria<\/a>&#8216;s five-year is 135.55% and 8.35% over one-year. Its profit margins stands at 6.17%, with revenue growth YoY at 56.46%. Around $13.75, the stock currently trades above its 50- and 200-day moving averages ($12.45 and $12.62, respectively), and trades at a 25x PE.<\/span><\/p>\n<p><span lang=\"en-CA\"> <a href=\"https:\/\/stockchase.com\/SIS-T\">Savaria<\/a> clearly has momentum, rising 23% in the past month, and continued reopenings could drive sales further. At least, investors are paid a 3.36% dividend to wait. <\/span><span lang=\"en-CA\"><i>(Disclosure: I own shares of <a href=\"https:\/\/stockchase.com\/SIS-T\">Savaria<\/a>.)<\/i><\/span><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-173744\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/06\/MDLZ-Q-1-760x254.jpg\" alt=\"Top Covid Rally Stocks : Mondelez International\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Top_Covid_Rally_Stocks_3_Mondelez_International_MDLZ-Q\"><\/span>Top Covid Rally Stocks : #3 Mondelez International (MDLZ-Q)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"MDLZ-Q stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/MDLZ-Q\/chart?labels=tru\" width=\"125\" align=\"right\" \/><\/p>\n<p lang=\"en-CA\">Like many Canadians during this lockdown, I&#8217;ve been fetching groceries for my elderly parents, and one of the big items was Ritz Crackers. <a href=\"https:\/\/stockchase.com\/MDLZ-Q\">Mondelez<\/a> sells these and other popular snacks, such as Oreos, to make them the world leader. The long shelf life and affordability of their products has made them popular items among those stuck at home. Again, buying habits will extend past the lockdown, so sales of <a href=\"https:\/\/stockchase.com\/MDLZ-Q\">Mondelez<\/a> snacks should continue.<\/p>\n<p lang=\"en-CA\">In fact, analyst <a href=\"https:\/\/stockchase.com\/expert\/view\/1274\/Christine-Poole\">Christine Poole<\/a> notes that 15-20% of the company&#8217;s current consumers are new. Further growth may come internationally, adds <a href=\"https:\/\/stockchase.com\/expert\/view\/1008\/Paul-Harris-CFA\">Paul Harris<\/a>. Around 40% of sales come from emerging markets. Meanwhile, speculation of a merger with Kraft has kept the stock afloat. <a href=\"https:\/\/stockchase.com\/MDLZ-Q\">Mondelez<\/a> pays a 2.17% dividend and trades at 21x. Though its one-year return is -2.17%, its five-year is 29.8%. Since the March 23 trough, <a href=\"https:\/\/stockchase.com\/MDLZ-Q\">MDLZ<\/a> has rallied 23%, though the Nasdaq has soared 43%.<\/p>\n<p lang=\"en-CA\">That said, the Nasdaq is loaded with tech powerhouses like <a href=\"https:\/\/stockchase.com\/AAPL-Q\">Apple<\/a> and <a href=\"https:\/\/stockchase.com\/META-Q\">Facebook<\/a>. I wouldn&#8217;t back up the truck on <a href=\"https:\/\/stockchase.com\/MDLZ-Q\">Mondelez<\/a>, but it is a fairly safe harbour to park your boat. \u00a0Mondelez was also recently chosen as a Top Pick in our <a href=\"https:\/\/stockchase.com\/discover\/kids-stock-market-picks\/\">Kids Top Stock Picks Challenge<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A month ago, I would have been crazy to write a column recommending stocks to buy on a pullback. How things have changed in a short time. The Nasdaq and Dow have returned to pre-lockdown levels while the TSX is [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":173746,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cwp_meta_box_check":"No","cwp_rev_product_name":"","cwp_rev_product_image":"","wppr_links":[],"cwp_rev_price":"","wppr_options":[],"wppr_pros":[],"wppr_cons":[],"footnotes":""},"categories":[17],"tags":[],"class_list":["post-173601","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lists"],"wppr_data":{"cwp_meta_box_check":"No"},"_links":{"self":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/173601","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/comments?post=173601"}],"version-history":[{"count":0,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/173601\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media\/173746"}],"wp:attachment":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media?parent=173601"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/categories?post=173601"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/tags?post=173601"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}