Beyond COVID-19

This is not yet another doom and gloom or hand waving analysis of the Coronavirus. Instead, we are going to look for opportunities as we emerge from the big scare.

It all started in China and has since loomed large across many countries. Lately, China is reporting fewer new Coronavirus cases every day. Whether we believe these numbers or not, there’s little doubt the Chinese authorities are looking to manage the fallout of the disease. Given the Chinese economy is heavily dependent on manufacturing, there is tremendous pressure to revamp the manufacturing base sooner rather than later.

Assuming China’s manufacturing will begin to slowly come back online in the near future, we have investigated which companies would benefit most. We asked our machines to find companies listed on US exchanges with over 20% exposure to a Chinese supply chain and/or end market. We double-clicked on companies whose stocks are in deep correction territory (i.e. down over 10% from recent highs). Out of ~4,000 publicly traded companies, 96 stocks were identified in deep correction territory which have at least 20% exposure to China. Our algorithms sorted this list based on our machine-generated 12-month forward-looking fundamentals predictions (assumes demand is mostly deferred, not eliminated due to the Coronavirus).

Below we list the top 20 companies that may be poised for big returns when the situation in China begins to normalize. Fundamentals of these companies will improve at different rates depending on the exposure and the industry.

Ticker Company name Industry Market cap ($MM) China exposure Change from 52-week high
AMD Advanced Micro Devices Semiconductors 56,834 25% -26%
POWI Power Integrations Semiconductors 2,532 55% -24%
CRUS Cirrus Logic Semiconductors 4,022 78% -27%
IMAX IMAX Corp. Movies/Entertainment 922 29% -43%
STAA STAAR Surgical Co. Medical Specialties 1,339 42% -35%
NVDA NVIDIA Corp. Semiconductors 162,817 24% -22%
ZNH China Southern Airlines Airline 9,588 78% -48%
PI Impinj Electronic Production Equipment 513 47% -46%
FLEX Flex Ltd. Electronic Components 5,388 25% -32%
ATHM Autohome Internet Software/Services 8,655 97% -39%
AVY Avery Dennison Containers/Packaging 10,064 25% -17%
INTC Intel Semiconductors 238,528 27% -26%
OLED Universal Display Corp. Electronic Components 7,354 32% -35%
TPIC TPI Composites Electrical Products 758 27% -43%
MOMO Momo Information Technology Services 5,877 100% -33%
MPWR Monolithic Power Systems Semiconductors 7,407 59% -22%
OXFD Oxford Immunotec Global Medical Specialties 343 27% -34%
AMAT Applied Materials Semiconductors Equipment 53,096 28% -23%

 Source: Big Data Federation, Inc.

 

Disclaimer: Big Data Federation, Inc. and its subsidiaries currently hold no positions in above mentioned companies or stocks.