The stock market had been on a massive 11 year bull run with minimal signs of slowing down. Then a once in a lifetime pandemic takes over the world. The market inevitably came crashing down. I’m going to cover 3 High risk, high reward stock to take advantage of during the Covid-19 pandemic.
High Risk High Reward
Nearly all sectors of the economy felt the grips of Covid-19 when the Coronavirus spread around the world. Airlines, cruises, and hospitality groups all felt the effects. Possibly more so than others particularly because operations have been halted.
January and February saw most companies at the peak of their stock prices, only to see 52 week lows on March 23. Since then a lot of stocks have recovered immensely. Some however are still down 70% in some cases.
This industry was probably hit the hardest. Not only were Carnival cruise ships stranded at sea, but crew and passengers in the Grand Princess and Diamond Princess Carnival cruise ships were diagnosed positive for the Coronavirus. In all, there have been 1500 confirmed cases and 39 deaths over nine ships.
On April 9, 2020 the Center for Disease Control and Prevention (CDC) declared a no sail order of 100 days for all cruise ships, or until public health is back to normal.
Carnival Cruise Line (CCL) had a low of $7.97 per share on April 2 down from $47.52 per share in January 2020. Right now Carnival sits at $12.56.
If you are a believer in the cruise industry, right now might be a good time to grab some shares. Customers who frequent cruises will admit they are addicted to them. If cruise lines can weather the storm I don’t see them not getting back to normalcy in the future.
The next high risk high reward stock to pick up during the pandemic are airlines. Flights have literally been grounded since shelter in place orders were made. You can travel at your own risk, but wisely many have opted not to. Those that have no choice but to fly are often the only passenger on the flight.
With airline travel down 95%, the likes of Delta (DAL) and other carriers have been crippled. On the plus side however airlines are being bailed out by the federal government. They are being given a 70% cash grant and a 30% short term loan.
Stock market mogul and business tycoon Warren Buffett recently sold a nice portion of Delta stock as well as Southwest Airlines, delivering another blow to the industry. A lot of smart investors watch Buffetts moves and follow suit. Some speculate that Buffett opted to sell these stocks to get under the 10% stakeholders threshold so he doesn’t have to publicly share when he buys or sells more of said stock.
Delta saw a low of $21.35 on March 20 down from $62.03 on January 17, 2020. Right now Delta sits at $23.82. The hot take right now is that Delta is too big to fail. If you feel the same this may be an incredible time to buy.
Hospitality and Tourism Industry
Without airlines, cruises, and most importantly people the hospitality and tourism sector has also been decimated. One high risk high reward stock I would consider snagging is Disney (DIS). The theme park giant has been losing $30 million per day, in the US alone and just announced the likely park closure until 2021!
Disney has theme parks all over the world. They also have docked cruise ships and shuttered movie theaters. Disney owned ESPN is also hurting, having no sports to talk about. The one shining star is Disney+, the companies movie streaming service.
Disney saw a stock price of $85.76 on March 23 from a fall of $146.50 on January 3, 2020. Right now you can snatch a share of Disney for about $103. I think Disney will find a way out of this mess, if you feel the same, now might be a perfect time to get in.
Never forget, future millionaires are made in times of crisis. If you liked this article check out Recession Proof Dividend Stocks You Need To Buy.
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