Health scares can really spook the market, as February's coronavirus-sparked market drubbing illustrates. But we still have portfolios to manage, even if it seems like the world is ending, and that includes hunting down the best stocks for whatever the market might throw at us.
It's never reassuring when you see news footage of quarantined tourists stuck on a cruise ship, or when the Homeland Security agent gives your passport an extra-hard look for recent visits to China. But now that the Centers for Disease Control and Prevention have admitted that a U.S. outbreak has gone from a question of "if" to one of "when," it has become much more real.
We're not health experts, so we won't pretend to know what's next. What we do know is: This isn't the first global flu scare, and it's not likely to be the last. We also know that while the data on coronavirus is still patchy, it doesn't appear to be exceptionally lethal. The death rate is about 2.3%, and the real rate could be lower. We have no way of counting early carriers of the virus who might have been misdiagnosed with flu or the common cold. For perspective, the "regular" flu kills only about 0.13% of those that catch it, but the SARS and MERS viruses had death rates of 9.6% and 34.4%, respectively.
But while the coronavirus is far less deadly, its effects on the economy will likely be much worse. When SARS hit the Chinese economy in 2003, China accounted for just 4.2% of the world economy, according to IHS Markit. Today, it makes up 16.3%. Thus, any pronounced Chinese slowdown will be felt around the world.
We'll get through this. But in the meantime, we have to deal with a stock market that could suffer considerably at the hands of this worldwide health scare.
Here are 11 of the best stocks to buy if the coronavirus scare continues to escalate. Some are buy-and-hold plays that looked appealing under normal circumstances but also possess strengths that make them an even better fit for this situation. A few others have fundamental long-term issues and are best viewed as shorter-term (read: a few months) swing trades. And while all of them are bound to take a few lumps on broad-market selloffs, they also have certain qualities that give them higher upside potential i
Stocks have started to crater as the novel coronavirus spread to Europe and other parts of Asia. Fortunately, Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.B), was on hand Feb. 24, telling viewers on CNBC that folks should never sell based on headlines.
As always, the world's greatest investor dispensed excellent advice. Indiscriminate selling is too often a good way to lock in losses or forgo gains.
But that doesn't mean that investors shouldn't be looking for stocks to sell. They should, as part of a natural pruning to weed out lousy holdings and free up cash for better opportunities. To that end, some stocks looked like serious duds even before the Dow Jones Industrial Average tumbled almost a thousand points.
To find stocks Wall Street is most bearish on, we scoured the Center for Research in Securities Prices' (CRSP) total U.S. market index for companies with a minimum market capitalization of $500 million. Our stocks also had to have coverage by at least three analysts. Next, we turned to S&P Global Market Intelligence's recommendation roundup.
S&P Global surveys analysts' stock calls and scores them on a five-point scale, where 1.0 equals a Strong Buy and 5.0 is a Strong Sell. Scores between 3.5 and 2.5 translate into a Hold recommendation. Any score higher than 3.5 means that analysts, on average, believe the stock should be sold. The closer a score gets to 5.0, the higher their collective conviction.
Here are 11 stocks to sell that rank among the worst names listed on any major U.S. exchange. If you're still holding any of the names after the latest market selloff, you might want to rethink your commitment.SEE ALSO: 16 Stocks Warren Buffett Is Buying and Selling