PK - About to Buy Penny Stocks? Look at These 3 Companies First
High-risk investors should forget about penny stocks, those micro-caps that are perpetually small. In a market that's been crushed by the COVID-19 pandemic, it's a wonderful time to buy major companies that have fallen down into small-cap territory. If you think (as I do) that our society is over-reacting to the coronavirus, there are some amazing opportunities to make money right now.
What companies have been hit the hardest? Well, let's flip that question around. What companies are relatively immune to COVID-19? And the answer is e-commerce retailers and stay-at-home stocks. Think of stocks like Shopify, Amazon, or Netflix. Shopify is up 13% in 2020, Amazon is up 3%, and Netflix is up 9%. That's pretty good in the middle of a stock market meltdown!
So if the stay-at-home stocks are doing all right, what's getting killed? That's right, the out-of-the-house stocks. For instance, Booking Holdings is down 36% in 2020 (worse than the market). That's because people aren't traveling. The real deep value stocks right now are in hotels, restaurants, cruise lines, and airlines. These stocks have been pounded. But the underlying companies are otherwise sound, and the hit should be temporary. Here are three such stocks that ought to skyrocket once the COVID-19 self-quarantine is over: