Which Firms Will Survive The Coronavirus Disease COVID-19 Crisis?

Dear Reader,

The global economy is basically in free fall due to the coronavirus disease COVID-19 shutdown.

So which firms and sectors will survive and later thrive after the current crisis goes away?

Which firms will find it difficult to survive in the current environment?

I believe food and other groceries retailers like Walmart, Costco, Tesco, Sainsbury's etc. will do relatively better in the current coronavirus disease COVID-19. By doing better I mean their stock market capitalization will fall less than the overall market measured by major US, European and Asian indices. Food producers will also relatively do better.

Even after the crisis ends, their stock will trade at higher multiples than before the crisis. Make no mistake, the population will remember the coronavirus scare for a long time and investors will reward essentials companies like Walmart and Tesco.

Pharmacy chains like Walgreens Boots Alliance and pharmaceuticals producers like Pfizer, Eli Lilly, Johnson and Johnson, GlaxoSmithKline, Bristol Myers Squibb, AstraZeneca, Bayer etc. will also do better than the overall market. And later pharmaceuticals producers will trade at higher Price/Earnings, Price/Sales and Price/Book multiples than before the crisis. People will just value their services more, at least in the mid term.

Telecommunications companies like AT&T, Verizon, Sprint, T-Mobile, Deutsche Telecom, Vodafone, Telefonica etc. will also do better than the major stock market indices since their services - telephone calls and internet are absolutely essential for the economy to survive and later recover.

Utility companies that provide us with water, electricity and gas will also preserve a lot of their value

So which companies are the losers from the coronavirus disease COVID-19 crisis? Hotel chains, restaurant chains, especially upscale ones, air carriers, transportation companies, tourist operators, consumer discretionary goods chains, oil producers, base metals miners, construction companies, industrial goods producers will be hurt horrendously during the current crisis. Banks, brokerages and insurance companies will also suffer a lot if the crisis goes on for two or three months more.

 So now is the time for real value investing. The companies that provide life's essentials like food, water, electricity, internet, telecommunications, medicine will survive this horror. Others from other sectors like Travel and Leisure, Consumer Discretionary, Commodities, Financials etc. mentioned above will face tremendous difficulties.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich