Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
2020 has been a roller coaster year, but it is slowly coming to an end with optimistic news to round it off. This is reflected in global stock markets, which have generally picked up following the end of the US election.
Stocks That Could Gain From the Vaccine Distribution
One of the hopeful developments is the news of Pfizer’s COVID-19 vaccine, which supposedly has a 90% success rate. Though it could take a few months for operations to be in full swing, it bodes well for specific companies. The following are the stocks that stand to benefit from the vaccine distribution.
Carrier Global Corp is a company known for manufacturing and distributing heating, ventilating, and air conditioning (HVAC) systems. However, in more recent times, it has branched out to include commercial refrigeration products. And it is these cold storage solutions vertical that has a role to play in the vaccine distribution.
Carrier Global partnered with Amazon’s AWS in October with the end goal of creating a digital platform called Lynx. The company explicitly stated that this would help in the delivery of vaccines. The technologies provided would enhance visibility and increased connectivity across cold chain operations for temperature-sensitive cargo.
The company introduced the cold storage Carrier Pods products in late October, expressly designed to help with the distribution of the COVID-19 vaccine.
Carrier is also working on improved air-conditioning solutions for a post-pandemic environment, which, the company expects, will reach $10 billion in market value.
The largest industrial gas company by market share and revenue, Linde PLC, works in numerous fields including healthcare, manufacturing, and chemicals. However, in the context of the COVID-19 pandemic, the company’s supply of dry ice is what matters. It is also worth noting that Linde is ranked 483th on the Fortune Global 500.
The company, being one of the largest manufacturers of various chemical substances, comes into the picture for its large scale of operation. Vaccine deliveries require dry ice in thermal containers to remain viable — which is where Linde comes in.
The company beat expectations with its Q3 earnings report, with an earnings per share of $2.15.
The performance continues the company’s growth over the last year; it has beaten EPS for four quarters straight.
The company has outperformed the S&P 500 with a growth of over 10% YTD.
FedEx needs little introduction, being one of the most well-known delivery service companies. With a global presence, FedEx is in a strong position to distribute vaccines globally through its already established network. Another major feature in its favor is that the company is one of the US government’s top contractors.
And as one of these contractors, FedEx will likely be tapped into to handle logistics. There are already reports emerging that Pfizer will work with the company in addition to UPS to distribute the vaccine. It is also worth noting that other companies are developing vaccines and could work with distributors like FedEx.
The company has had a phenomenal year, boasting a growth over 85% YTD.
FedEx is also outperforming peers in the category, and with a COVID-19 deal, even more growth may be on the horizon.
Revenue is also up to $2.3 billion from the same time last year, with the company reporting $19.3 billion in the quarter.
The upcoming few quarters could be some very interesting months for the global stock markets. Other asset classes, like Forex, are also showing good signs going forward. Whatever the case, keep an eye on ancillary stocks that could benefit from the vaccine and the general economy.
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What do you think about the companies listed here? Do you think they’re going to benefit in the short term? Let us know in the comments below.
Disclosure:Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firms specializing in sensing, protection and control solutions.