Aug 13, 2021
It’s been a crazy week for Moderna shareholders.
After soaring spectacularly over the past couple of months, shares of the pharmaceutical giant — and COVID-19 vaccine provider — crumbled 16% on Wednesday on serious concerns over its valuation.
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Bank of America analyst Geoff Meacham called Moderna’s nearly $200 billion market capitalization “ridiculous” and “unjustifiable on a fundamental basis,” prompting investors to head for less-expensive areas of the market.
Moderna’s recent weakness could be a prime trading opportunity for aggressive contrarian investors. But for those on the conservative side looking to profit from a post-COVID recovery, Moderna’s stomach-churning stock may not be appropriate.
Here are three lower volatility stocks for investing in the post-pandemic world.
The Walt Disney Company (DIS)
Entertainment giant Disney is one of the more obvious post-COVID reopening stocks, but it hasn’t exactly shown obvious signs of recovery -- until today.
In the company’s quarterly report this morning, adjusted earnings of $0.80 per share easily topped estimates while revenue jumped 45% to a whopping $17 billion.
Management also said that Disney+ -- the company’s key streaming service -- now has 116 million subscribers, nicely ahead of the 114.5 million that analysts were expecting.
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“We’re pleased to see more encouraging signs of recovery across our businesses, and we remain focused on ramping up our operations while also fueling long-term growth for the Company,” said CEO Bob Chapek in the report.
With the stock still essentially flat for 2021 and trading a cheapish price-to-sales of 5.5, now might be an opportune time to bet on that optimism.
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Comcast (CMCSA)
Telecom behemoth Comcast is another “blue chip” stock that is benefitting from the steady relaxation of COVID restrictions.
The company is best known for being a cable provider, but its diverse portfolio also includes film studio and theme park assets, which both saw a nice bump last quarter.
In Q2, adjusted EBITDA at NBCUniversal improved 13% while theme parks delivered their first profitable quarter since Q1 2020, driven primarily by Universal Orlando.
Management even repurchased 8.8 million of its common shares for $500 million.
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“I have great confidence in our strategy and our ability to execute, which is reflected in our decision to restart our share repurchase program during the quarter, earlier than previously planned,” said Chairman and CEO Brian Roberts.
Comcast shares are only up 5% over the past months, so there might be plenty of room left to run.
Hilton Worldwide Holdings (HLT)
No post-pandemic stock list would be complete without mentioning a hotel operator. And with 6,500 properties in 119 countries, Hilton Worldwide Holdings is one of the biggest and best-run of the bunch.
Wider distribution of vaccinations and the easing of travel restrictions have given Hilton’s financials a much-needed boost, and the trend should only continue.
In the most recent quarter, system-wide comparable revenue per available room -- a key metric in the industry -- spiked 234% on higher occupancy.
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The company also approved 25,900 new rooms for development, bringing Hilton’s development pipeline to greater than 400,000 rooms.
“While the pace of recovery varies by region, particularly with the uncertainty surrounding coronavirus variants, we expect continued strength in leisure demand and further upticks in business travel to drive continued resurgence in the back half of the year,” said President and CEO Christopher Nassetta.
Hilton shares have risen just 4% over the past three months.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
How to get in the game
You don’t need a whole lot of money to invest in these stocks.
If you’re working with a smaller budget, you may want to use an investing app that allows you to buy “slices” of shares for big-name companies like the ones mentioned — especially one that comes with no fees or commissions.
Another low-budget option is using an app that allows you to invest with just your “spare change," rounding up to the nearest dollar on all your purchases to help you build a diversified portfolio over time.
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Brian is an editor for Moneywise. A long-time stock junkie, his work has appeared in The Motley Fool, Seeking Alpha, and Yahoo Finance. He believes in owning "Forever Stocks" — a rare group of businesses that have paid out dividends for decades. Brian holds the Chartered Financial Analyst (CFA) designation.
