The market undoubtedly had a bad week with the majority of stocks down. People are panicking and scrambling to keep their losses low and selling to avoid any more losses.
Keep in mind that most major drops always bounce back. The best way to think about the drop: many sound investments are at a discount and should be bought up, so when the market bounces back, massive gains can be made. Blue-chip stocks, growing companies, even S&P 500 tracking ETFs are great possible investments during this downturn.
ARK Innovation ETF (ARKK)
ARK Innovation ETF run by the famous or infamous, depending on your stance on her thesis, Cathie Wood, saw a tremendous run last year. The price increased a whopping 265.33% in 2020 outperforming many individual stocks and growing companies, which is often rare to see from an ETF.
Woods and her team actively manage the fund and invest in companies that follow the investment theme of “disruptive innovation”. Although many investors sing their praises for Cathie Woods, some believe that her revolutionary fund may not be so genius after all.
Some say all the stocks the fund has bought are already stocks that everyone else buys like Tesla, Square, and Roku. They also attribute her recent exposure in major news networks and TV appearances as mere publicity stunts to drive more attention to her ETF, one that has quite the expense ratio compared to other ETFs.
The fund price was at $130.36 as of Friday 8 pm which is a massive decrease from its recent high of $156.58 on February 12th. This could be the perfect opportunity to buy although no-one knows for sure how much lower the market will continue to drop.
Needless to say, this recent drop brings a plethora of entering opportunities making it a great time for investors to make their picks on players they believe have a strong future.
Novavax (NVAX)
Companies are scrambling to be the next Moderna or Pfizer and release their Covid vaccine to the world. This dire, but profitable situation has got the healthcare and vaccine industry in a race against their competitors. Novavax, however, seems to be next in line.
This American vaccine development company headquartered in Gaithersburg, MD has seen great success in developing the vaccine from its recent UK phase 3 testing with results showing an impressive 89.3% efficacy.
Novavax’s closest competitor is Johnson & Johnson, which received FDA approval Saturday. Despite their, lead, Johnson & Johnson’s vaccine results show little improvement upon Novavax’s variant.
For example, their South African strain efficacy beat Novavax’s by 4% with 64% efficacy. However, when compared to the difference in efficacy for the UK strain, Novavax delivered 89.3% efficacy versus Johnson & Johnson’s reported 66%. If Novavax continues to develop then it is sure to next to the market, mastering both the South African and Brazilian variants.
The stock was trading at $231.23 as of Friday 8 pm, a massive increase since the start of the year when it was trading at $111.51. The recent vaccine developments have most certainly pushed the price beyond expectations and could continue to do so with further developments. The best thing for Novavax now would be to improve on the different variants so that its efficacy trumps all other competitors.
Square (SQ)
Square is a payment and solutions company that has been consistently growing for many years. Its revenue has grown at a compound annual growth rate of 40.9% over the last five years.
The company’s share price is currently up 140% on the year and reached its highest price on February 19th. A big chunk of Square’s current growth comes from the application Cash App.
In the third quarter, Cash App’s gross profits jumped 212% year over year, accounting for $385 million, or 48.5%, of Square’s total $794 million gross profit.
This week Square is actually down $46 dollars since Monday. This was caused by the drop in Bitcoin prices this week. They are both in similar sectors of the market as square deals with online money transactions. If considering this stock, buying the dip might be a good option.
