Yesterday, Pfizer announced the results of its COVID-19 vaccine trial, and data showed it had an efficacy rate of over 90%. If this vaccine is approved for emergency-use authorization from the FDA, this will be a significant step in the fight against the coronavirus…
This news sparked a market rally and the Dow Jones and S&P 500 indices touched record highs. This rally was led by several companies in beaten-down industries including airlines, energy, hospitality, entertainment, and brick-and-mortar retail surged higher.
Here, we look at three such stocks that should stage a rebound in the next few months if the vaccine is approved for widespread use.
An airline company
The passenger airline space was one of the hardest-hit industries in 2020 as international borders were closed and air traffic came to a standstill. The airline industry is a capital-intensive one and companies including Southwest Airlines (LUV) burnt millions of dollars at a time when revenue declined at a massive rate.
However, Southwest Airlines gained close to 10% on November 9 on the vaccine news and is a stock to keep on your radar in the next year. Prior to the pandemic, Southwest was one of the best performing airline stocks and returned 390% in the last decade between 2010 and 2019.
Southwest experienced a 68% year-over-year revenue decline in Q3. While its revenue of $1.79 billion was in line with consensus estimates, Southwest’s adjusted loss of $1.99 per share surpassed Wall Street forecasts of a loss of $2.35 per share.
Southwest ended Q3 with a cash and investment balance of $14.6 billion while debt and lease liabilities stood at $12.6 billion. Its liquidity position is robust and the company has maintained a fundamentally strong balance sheet to tide over these uncertainties. It will take at least two years for air traffic to reach pre-COVID-19 levels and Southwest’s strong financials will help it overcome a tough period with minimum damage.
A dividend giant
Stocks in the energy sector also traded higher yesterday. Shares of midstream heavyweight Kinder Morgan (KMI) rose 7.1% to close trading at $12.30. The company operates over 38,000 miles of pipelines and 180 terminals in North America.
Though Kinder Morgan remains relatively immune to oil prices, the stock is still…
Continue reading at STOCKNEWS.com
