What are epicenter stocks? Originally coined by Fundstrat’s Tom Lee, “epicenter stocks” are companies that were hit hardest during the pandemic, but stand to benefit the most from an economic reopening. Now, it appears that new daily infections are on the decline with the global vaccine rollout. Many are jumping on the assumption that the pandemic may be over soon, if so, you may want to check out the top epicenter stocks to buy right now.
The current bull argument is that top epicenter stocks could be looking at the biggest recoveries once the pandemic comes to an end. Logically, positive vaccine news would incentivize investors to turn towards epicenter stocks. Of course, the idea of betting on epidemiological trends can be risky. While the infection data seems encouraging, no one can say for sure if the vaccines could offer full protection against the new variants.
That said, some protection is better than no protection. After all, vaccine rollout has been crucial in addressing the prior surge in coronavirus cases. And now, the Israeli studies show that the Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) COVID-19 vaccine appeared to stop the vast majority of recipients in Israeli from becoming infected. This provides the first real-world indication that immunization will curb transmission of the coronavirus. With global vaccines continuing to roll out, we could very well be on the road to recovery. If that’s the case, you might want to put up a list of the best epicenter stocks to buy before we can indeed confirm a recovery.Best Epicenter Stocks To Buy [Or Sell] Now
- American Airlines Group (NASDAQ: AAL)
- Royal Caribbean Group (NYSE: RCL)
- TripAdvisor Inc. (NASDAQ: TRIP)
- AMC Entertainment Holdings (NYSE: AMC)
First up, American Airlines seems ready for take-off after gaining nearly 10% while the broader market took a hit. If you have been following our feeds on StockMarket.com, the story here should be familiar. Airline stocks took a major hit during the onset of the pandemic. And with the COVID-19 situation improving amid a global vaccine rollout, investors are starting to pay attention to the aviation space.
What really triggered a spike among top airline stocks was the sector-wide upgrade from Deutsche Bank’s analyst, Michael Linenberg. While he appears to have some reservations about the valuation of the stock, he believes airline stocks have considerable upside. More travelers will fly when it is safe to do so.
It is not a matter of if, but when. Therefore, airlines and their stocks will eventually recover. The question is in getting on board early enough. What’s more, with the recent vaccine news from Israel, the road to recovery for AAL stock may be a smooth one.
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Coming up next, Royal Caribbean Group is another epicenter stock bucking the trend when the market goes south. Royal Caribbean Group is the largest cruise line company in the entire world. Additionally, it is the second-largest cruise line in the world by passengers. The company holds more than 14% of the cruise line market by revenue and 19% by passengers. That makes it a top candidate for recovery if this sector is able to perform better.
The company’s shares were surging Monday following the release of the company’s fourth-quarter results. This came amid a smaller-than-expected loss from the company. To top it all off, Royal Caribbean CEO says booking data for cruises suggests a surprisingly positive post-COVID-19 recovery, and investors were delighted.
“We thought almost everybody was going to be an experienced cruiser because they’re the ones who understood cruising and were anxious to come back. “Yet, in our Singapore operation, 80% of our guests have been first-timers. So we’re getting a lot of surprising data as things come out, and it’s mostly positive.”- Richard Fain, CEO of Royal CaribbeanTripAdvisor Inc.
Another epicenter stock worth putting on your watch list is TripAdvisor. The company has been steadily climbing since November amid strong vaccine efficacy data and approvals. Following positive news on the vaccine front, the online travel booking site could see a very strong upside once COVID-19 is relatively under control. That said, the company is not resting on its laurels while waiting for the pandemic to be over.
The real reason why TRIP stock soared on Monday’s trading was because of its new direct-to-consumer subscription offering, TripAdvisor Plus. Bernstein analyst Richard Clarke, who rates the company outperform, raised his price target on the shares to $45 from $40. “Despite being in beta stage, confined to certain areas of the U.S., and without a full basket of direct supply, it is still something to get excited about.” Clarke said of the Plus subscription product, according to Bloomberg.
Should the company be able to successfully monetize Tripadvisor Plus, it would serve as a meaningful driver of user monetization on the platform. In case you are wondering, TRIP stocks are up more than 35% just this month alone. With the introduction of the new offering, besides the reopening tailwinds, would you add TRIP stock to your watch list right now?AMC Entertainment Holdings
If you have been trading in the stock market in recent months, AMC stock needs no introduction. The cinema operators’ stock was on everyone’s radar next to GameStop (NYSE: GME) amid brinkmanship between Wall Street banks and retail traders. But today, the rise in AMC stock is no longer about retail frenzies. Rather, it came after Governor Andrew Cuomo said movie theaters could reopen in New York on March 5.
Of course, the reopening plan comes with some stipulations. Having said that, cinema can only operate at 25% capacity, while the number of guests will be limited to a maximum of 50 people per screen. According to Cuomo, assigned seating, social distancing, and other health precautions will be in place. Nevertheless, investors must have breathed a sigh of relief at the news.
The ability to reopen its venues in a key market is certainly welcome news. You could almost say it is a reprieve for the struggling movie theater chain. Of course, that does not mean that the company is out of the woods yet. The question is, would you bet on AMC stock in anticipation of more venues reopening?