As the coronavirus continues to affect the stock market, Apple, Nike & Disney have taken a hit. But is now the best time to invest?
COVID-19 is the only thing people are talking about right now, not only because it has the potential to affect the health of loved ones but also to affect daily life and habits. The stock market crash is a cause for concern for anyone, with the Dow Jones Index falling below 20,000 for the first time in 3 years, on Wednesday, March 18. We ask, is this a good opportunity for investors to take a stab at some of the bigger names in their watchlist?
The past few weeks have certainly been a headache for those at Apple (NASDAQ: AAPL) HQ. Amidst it’s threatened supply chains due to the outbreak of coronavirus in China, Apple is also to be fined a record-breaking $1.23bn for breaching French antitrust regulations. Needless to say, Apple stock dropped dramatically, a decrease of close to 25% in the past month as of March 18.
But now might be the time to buy as Apple remains one of the most profitable companies in the world. Despite recent and worrying times, Apple will probably bounce back in time for the next quarter as China’s lockdown has now been lifted and it can get to work on those new tech-heavy iPad Pro’s that were leaked on the 17th of March, not to mention the rumors hinting at a potential Apple buyout of Disney (NYSE: DIS) who’s own stock fell 30% this month (but this is only wild speculation).
With stock prices relatively low and new, flashy products on the horizon, taking a bite out of this apple could reap better rewards than previously thought.
Nike (NYSE: NKE) has been hit hard by the coronavirus crisis too. Shops closing across North America, Western Europe as well as New Zealand and Australia meant that Nike’s stock has dropped more than 32% since the start of the calamity. With major sports events now being canceled another of Nike’s main sales drivers is off the table too.
Despite this, Nike is likely to recover well. It is one of the most recognized global brands and despite its temporary store closures, Nike can continue to sell products online. Additionally, Nike has had a 22.7% return on invested capital since 2007 (and this includes the last financial crash of 2008). These strong gains show that investing in Nike could be a solid choice for anyone who sees a potential new health craze fad after Coronavirus has run its course. My advice: Just do it.
Regardless of any truth behind Apple’s potential takeover bid, Disney is not so happy at the moment, with a 30% stock drop since last November, after it saw a rise due to the release of Disney+. Disney has suffered at the hands of COVID-19 with the closures of its parks, cruises, and shops in China, and now worldwide, all of which represent more than 34% of its revenue.
The main problem for Disney over the next few months is the expected closures of the domestic market. Some analysts believe the company could lose more than half-a-billion dollars due to the virus. However, for the beloved ‘House of Mouse’, all is not lost as Disney+ will launch in several European countries including the UK, Spain, Germany, and Italy on March 24 and then in India on the 29th. Investors can probably expect some fluctuation in the stock price over the next few months.
It is worth keeping an eye on Disney as it will ultimately bounce back once parks and cinemas are open again, and it is able to spread happiness to those of us who are sadly isolated for the foreseeable future.
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.