Market Commentary

Coronavirus stocks

  • Kevan Matheson

    Prior to starting Edge, Kevan was an Institutional Analyst at RBC Global Asset Management, one of North America’s largest fund managers, with assets under management in excess of $400 billion. After spending the majority of his career focused on large market capitalization public companies, Kevan became attracted to the risk/reward proposition of growth stocks and cryptocurrency. In 2017 Kevan published a book on investing in cryptocurrency, where he speculated on the coming growth in NFT’s and the underlying tokens that power their ecosystems. Known in the growth stock community as Small Cap Kev, his current passion is finding stocks in disruptive industries like blockchain, psychedelic medicine, plant-based meat alternatives & much more. Follow Small Cap Kev & his team on Instagram, TikTok, YouTube & this newsletter. If you like this content, please share it with your friends!

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It’s been 211 days (roughly 7 months) since the initial launch of the pandemic portfolio, and as of market close on October 29th

The blended return is sitting at 240.75%.

Keep in mind that this update is coming on the cusp of the US Federal Election, as the market digests volatility prior to the outcome, so these figures are due to change rapidly.

We started following our newest portfolio addition, CloudMD Software, on August 11, 2020, and are officially adding it to the roster in our End of October update – since we began our analysis, the company is up nearly 250%. Keep following along for all of the best up-and-coming small-cap stocks around.

The objective was (and still is) to identify companies that are well-positioned to not only weather the storm, but capitalize on the new, emerging trends that will shape our behaviours and lifestyles going forward.

This portfolio of coronavirus stocks is hypothetical, and mostly an exercise in trend following. We hold many, though not all of the stocks listed.

COMING SOON!

The Pandemic Portfolio will undergo a significant update, with additions and removals based on the current state of the market, the possibility of a vaccine approaching, and new stocks that have been placed in our field of view.

The Pandemic Portfolio

Ten Stocks for COVID-19

Remote Work Technology

Zoom (ZM)

Zoom is a video conferencing app that broke onto the mainstage during COVID, and has now become a staple for communication in both business and social settings. During the lockdown, Zoom massively increased market share and revenue, though the share price took off even faster. Their latest quarterly earnings exceeded expectations by a wide margin, and propelled the stock even higher.

  • $144.50 price on April 1st
  • $489.68 on October 29th
  • 239% gain since initial post
  • $132.33B market cap

CloudMD Software (DOC.V)

CloudMD is a SaaS (software-as-a-service) company that has found a way to integrate telemedicine with artificial intelligence (AI) to help serve patients and medical professionals more efficiently. This company executes upon themes that we’ve been following for a while, such as AI and the automation of inefficiencies in our society. After listing on the TSX.V at the beginning of June 2020, the company has experienced extreme growth.

  • $0.84 on August 11th
  • $2.93 on October 29th
  • 249% gain since initial post
  • $374.45M market cap

Slack (WORK)

Slack is already a staple productivity tool, and has impressed the market with their extremely rapid growth, even before COVID19. Though they have likely been too dismissive about their incoming rival Microsoft Teams, Slack has a relatively sticky userbase, making them a potentially great acquisition target. Their path to profitability is credible and they still have a healthy balance sheet.

  • $26.15 on April 1st
  • $26.74 on October 29th
  • 2.3% gain since initial post
  • $14.61B market cap

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Social Distancing

Very Good Food Co. (VERY)

With 70% of the global population now reducing their meat intake, veganism has become a lifestyle choice for many. By 2026, the global meat market is projected to be worth over $24 billion, with nutrition-focused players ready to rise to the top. As a newly-public company whose biggest challenge has always been keeping up with their demand, VERY is ready for explosive growth in the near future. Their newly announced mega-facility in California is capable of producing ~68X their current production volume, setting this company up for substantial growth.

Curious why they’re included under social distancing? VERY has a premier eCommerce platform for their products and is currently one of the only direct-to-consumer plant-based meat alternatives to capitalize on this competitive advantage.

  • $0.25 at IPO on June 18th 
  • $3.15 on October 29th
  • 1,160% gain since IPO
  • $267.08M market cap

Netflix (NFLX)

In spite of the increased competition in the streaming wars, Netflix has been experiencing incredible user growth. There’s no doubt that the lockdowns have been a critical factor, though their prior focus on in-house developed content seems to also be paying off.

  • $376.05 on April 1st
  • $504.21 on October 29th
  • 34% gain from initial post
  • $209.47B market cap

Amazon (AMZN)

COVID was the final nail in the coffin for most traditional retail, sending a handful of well-known brands into bankruptcy. Ecommerce has clearly emerged on top, and Amazon is still the king (though Shopify has become a beast of its own). Even after the pandemic subsides, new shopping behaviours will likely persist, as many consumers who were forced to alter their shopping habits will likely continue online shopping due to the convenience.

  • $1,932.97 on April 1st
  • $3,211.01 on October 29th
  • 66% gain from initial post
  • $1.52T market cap

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Disease Prevention

Clorox (CLX)

People are stocking up on consumer staples in mass quantities, and the Clorox Company is an obvious beneficiary of this spending spree. Over a third of the company’s product portfolio is cleaning supplies like bleach, and while sales in its cleaning supplies segment were flat last quarter, shareholders can expect a hefty boost thanks to the coronavirus.

  • $171.88 on April 1st
  • $208.73 on October 29th
  • 21.44% gain from initial post
  • $26.20B market cap

Magnetic North Acquisition Corp. (MNC)

Magnetic North Acquisition Corp is a publicly traded firm, with a private equity investment style. A portfolio holding of theirs is a sanitization product company called Previcare, that has recently signed a nearly $100m sales contract. Their products are highly reviewed, and are completely sold out online. It’s hard to find a more pure play investment in disease prevention than that, particularly one with such a massive opportunity to rapidly scale.

  • $0.115 on April 1st
  • $0.67 on October 29th
  • 483% gain from initial post
  • $39.56M market cap

3M (MMM)

The CEO Mike Roman pegged potential revenue from coronavirus-related respiratory products to be similar to that from the H1N1 outbreak, around $250 million. Production volumes are being significantly ramped up around the world as they continue to provide critical medical supplies. As the outbreak persists, it seems as if masks and other medical supplies are going to be in demand for longer than expected.

  • $132 on April 1st
  • $158.50 on October 29th
  • 20% gain from post
  • $91.24B market cap 

ImmunoPrecise Antibody (IPA.V)

IPA is a relatively under the radar drug development company based in Canada. They have worked with 10 out of the top 20 big pharma companies in the last year alone, and have posted consecutive record quarterly revenues this year. Though their core business is developing new drugs for big pharma, the exciting upside potential is their 100% owned initiative to develop an antibody for COVID-19.

  • $0.88 on initial IG post (May 15th)
  • $20.40 on December 30th (following 1:5 stock consolidation)
  • 329.47% gain from updated post
  • $315.84M market cap

DisclaimerThe Very Good Food Company is a communications client of Edge Investments, and we own shares in the company.  

This article was originally published on April 1, 2020, and is no longer updated regularly. Most recent major update published on October 29th, 2020.

  • Kevan Matheson

    Prior to starting Edge, Kevan was an Institutional Analyst at RBC Global Asset Management, one of North America’s largest fund managers, with assets under management in excess of $400 billion. After spending the majority of his career focused on large market capitalization public companies, Kevan became attracted to the risk/reward proposition of growth stocks and cryptocurrency. In 2017 Kevan published a book on investing in cryptocurrency, where he speculated on the coming growth in NFT’s and the underlying tokens that power their ecosystems. Known in the growth stock community as Small Cap Kev, his current passion is finding stocks in disruptive industries like blockchain, psychedelic medicine, plant-based meat alternatives & much more. Follow Small Cap Kev & his team on Instagram, TikTok, YouTube & this newsletter. If you like this content, please share it with your friends!

    View all posts

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