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News of faster-than-expected positive results in the search for a COVID-19 vaccine is the topic of the week. If we can get a vaccine out as soon as this fall, then we may not see the total collapse of some threatened industries.
Even better, some of the best stocks will surge higher once investors know the virus threat is in the rearview mirror.
The economy will still experience a recession, but a vaccine could eliminate the possibility of a longer-lasting full-blown depression.
U.S. Biotech company Moderna Inc. (NASDAQ: MRNA) reported this week that its vaccines produced antibodies in human subjects and kept the virus that causes COVID-19 from replicating in mouse lungs.
Scientists at Oxford University are conducting trials on a vaccine and have reported positive results as well.
While Moderna has faced scrutiny since its announcement, its CEO said this morning that a vaccine is possible by the end of the year.
Partnerships are being formed throughout the pharmaceutical and biotech industries to speed up the development and distribution of a coronavirus vaccine.
Fall is a best-case scenario, but it is far better than the mid-2021 best-case targets for vaccine delivery that were being discussed earlier in the crisis.
Some of the economy and stock market segments that have been decimated by the pandemic will come roaring back once a vaccine is widely available. Even though many of these hard-hit stocks have jumped this week, they have a long way to go before they reach last year's high watermarks.
Travel will come roaring back when a vaccine allows the economy to function at full speed. Some cruise lines are reporting strong bookings for cruises in late 2020 and into 2021.
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The Walt Disney Co. (NYSE: DIS) is shooting to reopen its theme parks on July 1. People like to travel and love their vacations, after all.
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Online travel agency Expedia Group Inc. (NASDAQ: EXPE) had turned to private equity for cash to keep the business running.
Silver Lake and Apollo Global teamed up to invest $1.2 billion in Expedia back in April. Expedia also sold $2 billion of new debt in the range of 6% to 7% to further bolster its balance sheet.
Expedia leaped higher on the announcements of a possible vaccine, but the company is still trading way below its 52-week high. The stock would have to rise by 80% to match that level.
A normalized economy has a much higher probability of happening than anyone thought a few weeks ago. And when a vaccine is found, EXPE should start racing back to pre-COVID valuation levels.
Best Stocks to Buy Before a Vaccine, No. 2
Liberty Tripadvisor Holdings Inc. (NASDAQ: LTRPA), part of John Malones Liberty Media Group, also turned toward private equity for a lifeline during the pandemic.
The company accepted an investment of $325 million for private equity funds managed by Certares Management to pay off a margin loan.
Liberty Tripadvisor has been hard-hit with its stock falling by more than 80% in the past year.
To get back to the 52 weeks, the shares of the beaten-down travel services company would have to increase five times.
But Liberty Trip Advisor is the world's largest travel platform. So, a return to normal would lead to huge gains in the stock price. A 500% or more increase is possible.
Upper-end hotel and resort stocks should also experience significant rebounds once a vaccine is available. While many have bounced significantly this week, many of the stocks have to double or more in value to reach pre-pandemic levels.
And our top stock that will go up after the coronavirus threat is over could give you 200% gains…
Best Stocks to Buy Before a Vaccine, No. 1
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.