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COVID-19 Pushes Citizens to "Pandemic Pantries": 3 Winners

Manaswita Ghosh Dutta
·4 min read

The coronavirus outbreak has thrown many Americans into fits of “panic buying” to prepare for a home isolation, should the need arise. Of course, the only people under official quarantine are those who contracted the flu-like disease or who came in contact with the infected. Nonetheless, the panic stashing of groceries, drugs and other essential products is expected to aggravate, given the heightened fears among consumers.

In such a scenario, companies providing necessary supplies are expected to do well owing to the nature of their products and services. One could therefore glance through such stocks from an investment perspective.

Stashing “Pandemic Pantries” Buoy Demand

Consumers in the United States went into a frenzy to stockpile their supplies as they anticipate the coronavirus outbreak to worsen. After all, with the current COVID-19 death toll crossing 3,400 globally, this is an expected response not just from Americans but also from consumers who belong to other virus-hit countries, per a Nielsen report.

Going by the report, the hoarding of emergency products started in China and Italy, where the number of coronavirus cases significantly shot up. However, the trend has now spread to other affected countries as well, including the United States.

Consumers are also changing their food habits, prompted by the current scenario. Demand for perishables could be lower as consumers are suspicious of products that have been transported over long distances while that for non-perishable ones could surge. For example, consumers are focusing more on frozen fruits instead of buying fresh fruits and vegetables.

Consumers are particularly stocking products, such as hand sanitizers, medical masks, household masks, aerosol disinfectants, pet medicine, thermometers, first-aid kits, toilet papers, diapers, non-perishable food products, such as oat milk, dried beans, baby food, pretzels, bakery items, nuts, water and energy beverages, etc. This stashing in turn, boosted demand for these items as supply runs short regularly.

3 Stocks Riding the Wave of Essential Products Purchase

We therefore handpicked three stocks for investors that offer the range of consumer staples and pharmaceutical products mentioned above. These stocks are expected to benefit from the nationwide ‘panic stashing’ of essential items, each carrying a Zacks Rank #1 (Strong Buy) or 2 (Buy).

The Simply Good Foods Company SMPL is a producer and marketer of branded nutritional foods and snack products. The Zacks Consensus Estimate for Simply Good Foods Company’s current-year earnings has moved 17.9% north in the past 60 days. Shares of this Zacks #1 Ranked company, which belongs to the Zacks Food - Confectionery industry, have surged 36.1% compared with the S&P 500’s rise of 13.7% over the past two years.You can see the complete list of today’s Zacks #1 Rank stocks here.

AmerisourceBergen Corporation ABC is a provider of pharmaceutical products. The company offers pharmaceuticals, vaccines, pet medicines, diagnostics and several other products to consumers. The Zacks Consensus Estimate for AmerisourceBergen’s current-year earnings has moved 2.7% north in the past 60 days. Shares of this Zacks Rank #2 company, which belongs to the Zacks Medical - Dental Supplies industry, have risen 13.9% compared with the S&P 500’s rise of 12.6% over a year.

SunOpta Inc. STKL is a major manufacturer of food and beverage products. The company offers organic food products, beverages, shelf stable and refrigerated juices, specialty beverages plus natural and organic frozen fruits and vegetables among other such items.

The Zacks Consensus Estimate for SunOpta’s current-year earnings has moved 10.7% north in the past 60 days. Shares of this Zacks #2 Ranked company, which belongs to the Zacks Food - Miscellaneous industry, have rallied 18.4% against the S&P 500’s decline of 3% on a year-to-date basis.

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Click to get this free report AmerisourceBergen Corporation (ABC) : Free Stock Analysis Report SunOpta, Inc. (STKL) : Free Stock Analysis Report The Simply Good Foods Company (SMPL) : Free Stock Analysis Report To read this article on Zacks.com click here.