• DOW saw a fall of 1191 points in Spring 2020. It was the biggest one day drop that the index witnessed in its history. 

The world of stock markets registered a whopping 30 per cent loss by March 2020. Notably, within four minutes, the S&P 500 plummeted by 7 per cent on March 9, 2020, after it opened. It triggered a circuit breaker post the financial crisis of 2007-08.

Trading halted for almost fifteen minutes. At the day’s end, every stock market in the world was done and dusted. They all had a bad beating. The STOXX Europe 600 fell by more than 20 per cent.

The DOW Jones broke all fall records by plummeting by 2,014 points, a 7.8 per cent loss.

• Globally, UK equities were the weakest of the major regional equity market indices because of a 25% fall in the FTSE 100 index, an index showcasing the share price of the largest public companies on the London Stock Exchange, which suffered its worst quarter in three decades, with UK company shares also falling by 25% despite hitting a record high in January.

• The coronavirus-induced restrictions in activity wiped out revenues for companies in several industries, most notably tourism and travel and the energy sector. The pandemic has hit blue-chip companies in Quarter 1 2020 particularly hard because of a combination of the fall in demand in tourism and travel brought on by a global lockdown.
• The fall in the supply of oil because of the price war between Russia and Saudi Arabia, and reduced exporting of large firms because of affected operations.
• The behaviour of UK financial corporations and the rest of the world are similar during periods of uncertainty and market volatility. This is evident in the large increase in deposits and loans activity in Quarter 1 (Jan to Mar) 2020, the Bank of England’s so called “dash for cash”. Along with government securities (“Gilts”), currency and deposits are popular when the outlook of the economy and the stock market is perceived to be poor,  since these investments carry relatively little risk.

What stocks to buy in post-covid era?

1. Airbnb, Inc. (NASDAQ: ABNB

Airbnb, Inc. (NASDAQ: ABNB), the online platform that connects renters with those who need short-term lodging, can power through the coming few months with strong recovery momentum behind it. On June 21, investment advisory Baird maintained an Outperform rating on the stock with a price target of $200. 

A founder-led firm, we believe the company has an excellent management team, a very attractive growth profile with many levers at their disposal.

At the end of the first quarter of 2021, 52 hedge funds in the database of Insider Monkey held stakes worth $2.4 billion in Airbnb, Inc. (NASDAQ: ABNB).

2. The Walt Disney Company (NYSE: DIS), is also expected to be one of the big gainers of the year as theme parks reopen in tandem with relaxed social distancing rules and easing mask mandates. According to investment bank UBS, theme parks could be back to pre-COVID operating levels as early as the holiday season this year. However, UBS has cautioned that full-year recovery for the sector is not expected for at least another two years. The company’s shares have returned 62% to investors in the past year. The firm, an entertainment and mass media conglomerate, was able to weather the COVID-19 impact better than competitors as it had an internet streaming platform, named Disney+, to offset some of the pandemic losses. As the economy reopens, and theme parks welcome visitors again, the company can benefit a lot from the increased activity. 

On May 26, investment advisory maintained a Buy rating on The Walt Disney Company (NYSE: DIS) stock with a price target of $215, implying an upside potential of over 20%. UBS also named Disney among the high conviction picks with strong growth potential in the coming months.

At the end of the first quarter of 2021, 134 hedge funds in the database of Insider Monkey held stakes worth $12.5 billion in The Walt Disney Company (NYSE: DIS).

3. Comcast Corporation (NASDAQ: CMCSA)

Number of Hedge Fund Holders: 88

Comcast Corporation (NASDAQ: CMCSA) is a telecommunications firm with significant stakes in the broadcast and entertainment businesses. It is ranked third on our list of 10 stocks to buy to profit from post-COVID economic recovery. The stock has returned 45% to investors in the past year. The firm recently launched the Peacock internet streaming platform which has already signed a deal with Amazon Fire TV for distribution. Comcast has a market capitalization of over $250 billion. 

On April 20, investment advisory Oppenheimer upgraded Comcast Corporation (NASDAQ: CMCSA) stock to Outperform from Perform with a price target of $75 on the back of growth outlook for the firm as the COVID-19 pandemic waned. 

Out of the hedge funds being tracked by Insider Monkey, New York-based firm Eagle Capital Management is a leading shareholder in Comcast Corporation (NASDAQ: CMCSA) with 38 million shares worth more than $2 billion. 

With the relaxation of lockdown rules, another stock that could benefit is Comcast Corporation (NASDAQ: CMCSA), the telecom firm that owns several broadcast channels and film studios. The relaxations would allow the company to resume filming, and as cinemas reopen, another source of revenue would be added to the money pipeline that would strengthen the firm in the coming weeks and months.

4. Hilton Worldwide Holdings Inc. (NYSE: HLT)

Number of Hedge Fund Holders: 47    

Hilton Worldwide Holdings Inc. (NYSE: HLT) is a company that owns and runs several hotels and resorts across the world.

• The company’s shares have offered investors returns exceeding 74% over the course of the past twelve months. The company has been investing heavily in Las Vegas in recent years, doubling its footprint in three years with plans to expand to 30 hotels in the area by the end of this year. 

On June 15, investment advisory Argus maintained a Buy rating on Hilton Worldwide Holdings Inc. (NYSE: HLT) stock with a price target of $145. The investment advisory also raised the 2021 earnings per share estimate on the hotel firm to $2.6 from $2.56.

5. Live Nation Entertainment, Inc. (NYSE: LYV)

Number of Hedge Fund Holders: 37    

• Live Nation Entertainment, Inc. (NYSE: LYV) is an entertainment company that manages ticket sales for different kinds of live events. Over the past few weeks, the stock has climbed close to 17% as concerts resume and bring in much-needed revenue for the company after a disappointing 2020. The stock has offered investors returns exceeding 117% over the course of the past twelve months.
• On May 14, investment advisory Wolfe Research initiated coverage on Live Nation Entertainment, Inc. (NYSE: LYV) stock with an Outperform rating and a price target of $97 on the back of expectations of strong growth as the economy reopened following the pandemic.
• Out of the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Live Nation Entertainment, Inc. (NYSE: LYV) with 5.4 million shares worth more than $462 million. 

 6. Hess Corporation (NYSE: HES)

Number of Hedge Fund Holders: 26     

Hess Corporation (NYSE: HES) is a global energy company. It is ranked first on our list of 10 stocks to buy to profit from post-COVID economic recovery. The stock has returned 82% to investors in the past year. After a torrid 2020, with oil prices at record lows, the firm has bounced back as travel resumes and oil prices pick up again, with further growth expected as airlines resume operations and international borders reopen. 

• Hess Corporation (NYSE: HES) posted earnings for the first quarter of 2021 on April 8, reporting earnings per share of $0.82, beating market predictions by $0.47. The revenue over the period was close to $2 billion, up 40% year-on-year. 
• Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Hess Corporation (NYSE: HES) with 3.3 million shares worth more than $235 million.  

• HOWEVER, In its Q2 2020 investor letter, Massif Capital, an asset management firm, highlighted a few stocks and Hess Corporation (NYSE: HES) was one of them. Here is what the fund said:
• We took a short position in Hess (HES) during the first quarter due to what we believed to be a weakness in their assertion that the Bakken would serve as a cash engine, along with their Gulf of Mexico assets, to pay for the development of their offshore Guyana fields. Our analysis suggested that not only was their fracking in the Bakken unprofitable but that it was unlikely ever to be so. The market very quickly told us that although we might be right in our analysis of the fundamentals, it did not care. We suspect that much of this has to do with the fact that Hess had hedged nearly 100% of their production in 2020 during the relatively high priced 2019 period, but we cannot be certain
• One thing that seems increasingly true of the environment we are investing in is that bad capital allocation by management teams can be easily forgiven if there is plenty of liquidity, even if access to liquid capital imperils long-term solvency.”

Risk analysis:

Top risks for businesses in the post covid world:

• Businesses need to watch three drivers of risk: political, technological and societal.
• The pandemic has shown the importance of public-private collaboration.

Tthree critical drivers of risk – political, technological and societal.

Small and medium-sized business, hard hit during the pandemic, may find the recovery cycle unkind as well. In the US alone, 43% of micro-, small, and medium enterprises (MSMEs) closed between January and April – and numerous others still face the potential of permanent closure.

Many governments are also increasingly shifting towards protectionism in order to create more self-sufficient and self-sustaining economies. Partly in response to COVID-19, during which border closures, lockdowns and export restrictions choked extended supply chains, companies must keep an eye on shifts in domestic policies that focus on national security and self-sufficiency. Such policies could hamper access to foreign talent and investment, as well as future merger and acquisition opportunities.

Technological drivers are also accelerating and disrupting the business landscape. The pandemic has precipitated an unheralded tech revolution for big and small businesses alike. Rapid digitalization transformed social and work interactions overnight. E-commerce, virtual conferencing, gaming and streaming all underwent unprecedented growth. It has been estimated that worldwide internet usage in 2020 increased by 30% while e-commerce grew by upwards of 20%.

This rapid digitalization also has exponentially increased companies’ cyber exposures and created more complex and potentially less secure networks. The Global Risks Report 2021, in fact, highlights the failure of cybersecurity measures as a top short-term risk. And throughout 2020, we’ve seen increasing cyber-attacks on government agencies and companies globally – many leveraged the COVID-19 crisis to infiltrate networks. Globally, the attack volume doubled from the second half of 2019 to the first half of 2020.