The stock market isn't done falling. While your quality, long-term holds are going to rebound - after giving you a nice chance to buy even more shares - some stocks are going to fare much, much worse.
You don't want these companies anywhere near your portfolio right now.
Like Carnival Corp. (NYSE: CCL). While the Dow is now in bear market territory - down 20% (and growing) from its 2020 high in February, Carnival and other travel stocks have lost nearly half their value on the year.
Boarding a tightly packed international cruise ship is the absolute last thing consumers are going to spend their money on right now. And once news broke the coronavirus had spread through cruise passengers, the company's stock tanked.
For most people, it's not wise to sell your entire portfolio and sit on cash. That could end up costing you even more money. It depends on your goals and financial needs.
But there are some stocks to toss. These are stocks that can poison your portfolio... companies the coronavirus is going to hurt the most, just like Carnival.
The companies we're about to show you are facing similar threats. The losses will get even worse as coronavirus cases rise in the United States.
These are stocks falling harder than the rest of the market and are likely to have a much longer recovery time than others.
Depending on the scope of the pandemic, some of these stocks might not bounce back for months, if not years.
We haven't seen the end of the damage yet. Consider dumping these stocks while you can...
First up is Wynn Resorts Ltd. (NASDAQ: WYNN). The stock is down 30% on the year, and it could get even worse.
Two of Wynn's biggest properties are in Macao, a city in southern China. With China being the epicenter of the coronavirus outbreak, travel within the country has been limited as the government tries to get the pandemic under control.
Macao closed all its casinos for two weeks in February, but business is unlikely to spring back to life quickly even though they're able to open again.
China's response has included quarantining cities of millions of people and shutting down travel routes on airlines and trains. That, combined with the economic effects of the virus, puts a damper on leisure travel to China's premiere casino resorts. Plus, international travelers are less likely to choose China as a destination with the outbreak ongoing.
It could be months before the pandemic is eradicated and China's reputation recovers. That's a long time to see earnings take a hit.
Wynn's Las Vegas casino resorts won't be a backstop for the company's revenue, either. Americans are also less likely to congregate in confined spaces like casinos or the airlines they need to get there. And Las Vegas relies heavily on international tourists, including those from China. About 4% of Las Vegas's international visitors are from China.
Wynn's latest report explained, "A significant portion of our U.S. business relies on the willingness and ability of premium international customers to travel to the U.S., including from mainland China."
Until the outbreak is completely under control and we see signs of travel and tourism growing again, Wynn isn't worth the risk of owning.
American Airlines Inc. (NASDAQ: AAL) is next on our list. Travel bans, fears of a pandemic spreading across borders, and travelers preferring to stay home rather than risk travel are all obvious reasons shares of American Airlines stock are down nearly 45% on the year.
But the coronavirus is hitting the airlines especially hard due to their business model.
Warren Buffett once said, "The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money."
He was talking about airlines.
And with American Airlines' razor-thin margins of just 3%, well below the industry average of 9%, it's no wonder Buffett said investors would've been done a favor if Orville Wright never made it off the ground.
Thanks to the high competition from low-cost carriers, huge capital costs, and susceptibility to shocks like the coronavirus, airlines have been notoriously hard to make money on.
Even worse, American Airlines was rated the worst airline for long-haul travel last year. That already meant American Airlines was battling for coveted long-distance passengers. Now even fewer people are willing to book air travel until the pandemic is over.
With the virus continuing to spread in the United States, American Airlines may not have seen the worst yet. We'd stay away until they can show consumers are coming back to air travel, and even then rivals like Delta Air Lines Inc. (NYSE: DAL) or Southwest Airlines Co. (NYSE: LUV) might be better plays.
But you know exactly why resorts and airlines are hurting the most from this outbreak.
Our next stock to avoid might surprise you.
In fact, it was one of the most popular stocks of the last year...
The Walt Disney Co. (NYSE: DIS) was one of the breakout stars of 2019. The stock soared by nearly 40% last year after the unveiling of the Disney streaming service as a new competitor of Netflix Inc. (NASDAQ: NFLX).
But Disney is giving those gains back in the wake of the coronavirus.
It might not seem like it, but Disney is exposed to the pandemic on two fronts. That makes this stock a tough one to hold onto right now.
Disney gets about a quarter of its revenue from its parks, experiences, and products segment. That includes traveling shows like "Disney on Ice" and destinations like the Walt Disney World Resort in Orlando, Fla., and Disneyland in Anaheim, Calif. Plus, Disney operates its own cruise line.
As we mentioned above, customers aren't flocking to these big-ticket destinations as long as the coronavirus is still spreading. The same catalyst tanking Carnival and Wynn right now is lopping off a huge section of Disney's revenue, too.
Disney's studio segment is also taking a hit. The company makes 45% of its revenue from its media and studio products. Disney owns film studios like Pixar, Disney Animation, Marvel Studios, Lucasfilm, Searchlight Pictures, and 20th Century Fox.
Movie studios are facing grim prospects as customers are avoiding theaters. Even worse, China and the international box office are now the biggest source of revenue for studios, which means a movie flopping in China is as bad as it flopping in the United States. With the coronavirus weakening the Chinese economy and making both Chinese and American consumers less likely to head to crowded, public spaces like theaters, moviemakers will see their profits take a hit.
The latest James Bond movie - "No Time to Die" - just had its release date pushed all the way back to November. The film was initially supposed to debut in April. The studio is afraid fears about the virus will hurt revenue. You can expect to see more studios follow suit, including studios Disney owns.
It will take months for Disney's revenue and earnings to recover, and we don't know if we've seen the worst of it. It the virus continues to spread in the United States, we might not see companies with exposure to it recover until a vaccine is widely available and the public feels comfortable again. That won't be until next year.
This is one to avoid right now.
So now you know what to ditch... how do you find the profit opportunities?
The coronavirus has taken a sledgehammer to stocks, sparking the fastest market correction in history.
The COVID-19 epidemic could cut global economic growth in half.
When we'll return to "normal" is anybody's guess, and volatility is here for the long haul.
Right now, folks need guidance from an expert who knows how to chart a path in this choppy market.
Money Morning Chief Investment Strategist Keith Fitz-Gerald has been showing his paid Money Map Report subscribers how to navigate the market while managing risk since 2008 - right before the financial crisis.
His advice was a lifeline for Money Map Report member Wallace Connors, who said: "I was down over $325,000 when the market tanked... Thanks to you and your team, I made it all back and I'm up over $80,000.
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One is set to surge on a $5 billion hypersonic missile initiative. The other offers a hedge against the coronavirus epidemic - and a way to profit on assets typically off limits to retail investors.
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