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Have you had the bright idea of investing in U.S. stocks that got beaten down during the coronavirus pandemic on the belief things will get back to normal soon?
You’re not alone — and that means stock pickings are getting slim. “It is getting harder and harder to find opportunities in these hardest hit ‘center of the storm’ industries, as stocks have increasingly blown past pre-COVID (valuation) levels as equities continue to rally,” wrote Raymond James analysts in a research note out Tuesday.
Fully 60 out of 87 companies they cover in the sectors hardest hit by the pandemic stay-at-home orders have already returned to their valuations as of December 31, 2019, the analysts noted. Only 27 still have upside to get back to pre-COVID values, and of those, only 16 have strong “buy” or “outperform” ratings from Raymond James analysts.
See: 3 ETFs for the reopening trade
The sectors include the retail, restaurant, and hotel industries, along with healthcare service and equipment companies that have “meaningful exposure to elective procedures.” The “sweet sixteen” are noted in the table below.
They’re mostly airlines, the analysts acknowledge, while “restaurants are largely recovered with only one stock in this list, as most appear to be pricing in permanent improvement, we presume from the destruction of small, family restaurants and the growing importance of delivery. “
| Company name and ticker | Stock price change to pre-COVID valuations |
| SkyWest, Inc. SKYW, -1.12% | 59% |
| Alaska Air Group, Inc. ALK, -2.35% | 25% |
| Boston Scientific Corp BSX, -0.81% | 19% |
| Alimentation Couche-Tard Inc. ATD.B, -1.56% | 13% |
| ARKO Corp. ARKO, +1.84% | 12% |
| Autozone, Inc. AZO, -0.05% | 4% |
| United Airlines Holdings Inc. UAL, -2.32% | 28% |
| Copa Holdings, S.A. CPA, -3.15% | 21% |
| Dine Brands Global DIN, +3.42% | 21% |
| PROG Holdings, Inc. PRG, +1.35% | 17% |
| Hill-Rom Holdings, Inc HRC, +2.64% | 13% |
| Baxter International, Inc BAX, -0.79% | 8% |
| Advance Auto Parts, Inc. AAP, +1.41% | 7% |
| Becton, Dickinson & Co. BDX, -1.03% | 6% |
| O’Reilly Automotive, Inc. ORLY, +0.17% | 3% |
| Southwest Airlines Co. LUV, -2.03% | 1% |
| Source: Raymond James |
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