Zacks investment ideas showcase strengths: Alibaba, Disney, TSMC, Adobe and Sea Limited – Yahoo Finance

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Chicago, IL – April 9, 2020 – Today, Zacks Investment Ideas presents the main features: Alibaba BABA, Disney DIS, TSMC TSM, Adobe ADBE and Sea Limited SE.

The fear trade may have ended, but that does not mean that we have bottomed out. The VIX, aka the “fear gauge”, is trading at less than 45, its lowest level in over a month. The S&P 500 has risen more than 20% from its March 23 lows. Some call it the end of a very short bear market and the start of a new bull market. Don’t be fooled, we’re not out of the woods yet, and I see another downside on the horizon. I would not suggest that you continue this market recovery. Be patient with this hectic market. Accumulate cash during “bearish rallies” and buy when the market breaks.

Bearish rallies are expected during market crashes, and this slowdown caused by a pandemic is no exception. Below you can compare the most important market crashes of the last century (this graph was created by a blogger and can be found via this link). The one thing these market crashes have in common is that they all experienced large bear gatherings throughout the market downturn.

You can see that the current pandemic crash (highlighted in orange) illustrated the fastest failure of the S&P 500 to rally. If history can be our guide, this is not the end of the market pain. It has been around 1.5 months since the market began to erode, and the impact of this virus on the wider market is beginning to be understood.

The new coronavirus has shut down economies around the world and completely halted global demand. Most of the world is in quarantine and businesses are already struggling to keep their finances afloat, less than a month after they close. The US government intervened with a $ 2 trillion stimulus bill and the Federal Reserve took unprecedented steps in monetary policy to support the economy, but will that be enough?

In short, I believe the answer is no. In the past two weeks, nearly 10 million Americans have applied for unemployment, and we haven’t even touched the worst of it yet. Bankruptcies will begin to run rampant longer than this economic closure will ensue. I think a wave of bankruptcies will be a catalyst for the next step.

Don’t worry about your top notch actions with healthy checkups. Companies at risk of default are those that had already suffered financial constraints before the pandemic. Over-indebted and illiquid businesses

The retail sale of bricks and mortar is an obvious loser during this period of store closings. Department stores are a dying breed and their balance sheets illustrate this. Credit bureaus continue to downgrade the credit ratings of these companies deeper into the junk bond territory due to their risk of default outbreaks. These massive overheads in stores, the over-indebted balance sheets and the lack of size online presence of these stores will be canceled.

Other non-essential businesses such as cruise ships and amusement parks may also fail. Six Flags is an example. She had already gone bankrupt in 2009 due to an over-indebted balance sheet and her current situation looks like deja vu. Today, the theme park giant has accumulated almost as much debt as it did before bankruptcy. Six Flags operates quarterly, simply hoping it will have enough income to cover the massive interest charges, which accounted for 63% of last year’s profits. The pandemic could be the catalyst for a second bankruptcy, and this time it could be a complete liquidation of assets (Chapter 7 of bankruptcy).

Cruise ships are forever taboo by the new coronavirus, with cruises around the world to incubate this virus and spread it over entire ships. I see the demand for this type of recreation collapsing after the pandemic. I suspect bankruptcy and consolidation are following among the big players like Carnival and Norwegian Cruise Line. These companies are not essential economic entities, and the government does not go above and beyond to save them from death.

I stick to first-rate names with healthy, liquid balance sheets. The prices I have set below are the prices at which I will start charging on these stocks. Remember not to buy suddenly, but rather to average with the market.

The biotechnology sector is expected to exceed $ 775 billion by 2024, as scientists develop treatments for thousands of diseases. They are also finding ways to modify the human genome to literally erase our vulnerability to these diseases.

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Past performance does not guarantee future results. The risk of loss is inherent in any investment. This material is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, nor a recommendation to buy, sell or hold a title. No recommendation or advice is given as to whether an investment is suitable for a particular investor. It should not be assumed that the investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the business as a whole. Zacks Investment Research does not carry out any investment banking, market making or securities asset management activities. These returns come from hypothetical portfolios made up of shares of rank Zacks = 1 which were rebalanced every month without transaction costs. These are not the returns of actual equity portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for more information on the performances displayed in this press release.

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The Walt Disney Company (DIS): free stock analysis report
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Sea Limited Sponsored ADR (SE): Free Stock Analysis Report
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Adobe Systems Incorporated (ADBE): Free Stock Analysis Report
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Taiwan Semiconductor Manufacturing Company Ltd. (TSM): free stock analysis report
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Alibaba Group Holding Limited (BABA): free stock analysis report
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The Walt Disney Company (DIS): free stock analysis report

Sea Limited Sponsored ADR (SE): Free Stock Analysis Report

Adobe Systems Incorporated (ADBE): Free Stock Analysis Report

Taiwan Semiconductor Manufacturing Company Ltd. (TSM): free stock analysis report

Alibaba Group Holding Limited (BABA): free stock analysis report

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