The sell-off is sparing only a handful of stocks, with Clorox among them

  • Only 11 stocks in the S&P 500 are avoiding correction territory. 
  • Consumers are turning to Clorox products for preventative measures against the spreading deadly virus. 
  • “Unlike other areas of virus preparedness that are one-time in nature, the anticipated pantry load and increased trial…hold promise to drive new usage and potential repeat, a lasting benefit to CLX,” Consumer Edge Research senior analyst Jonathan Feeney wrote to CNBC in an email. 

Consumer-staples giant Clorox, along with 10 other stocks have emerged as the definitive anti-coronavirus trades, as the only S&P 500 stocks avoiding correction territory.

While the broader market craters, the well-known maker of bleach and disinfection wipes is only 8.6% off its most recent high. Before the marketed open on Friday, Clorox was positive for the week. This compares to the S&P 500’s 14% plunge since Monday. Regeneron Pharmaceuticals is also being spared, as the only S&P 500 stock that is positive for the week.

It’s been a dismal week for stocks as fears of a possible pandemic escalate, with cases of the new coronavirus surging outside China. All three U.S. stock averages are deep in correction territory, and the Dow and S&P 500 are on pace for their worst week since the financial crisis. The Centers for Disease Control confirmed the first U.S. coronavirus case of unknown origin in Northern California on Wednesday and California Gov. Gavin Newsom said Thursday the state is monitoring 8,400 people for coronavirus.

Meanwhile, a handful of stocks are being spared, and they are all plays on the coronavirus. Consumers are turning to Clorox products for preventative measures against the spreading deadly virus.

“The recent tragic outbreak of Coronavirus is likely to drive demand for Clorox’s cleaning products,” Consumer Edge Research senior analyst Jonathan Feeney wrote to CNBC in an email. “Unlike other areas of virus preparedness that are one-time in nature, the anticipated pantry load and increased trial…hold promise to drive new usage and potential repeat, a lasting benefit to CLX.”

Of the 16 Wall Street analysts that cover the stock, Consumer Edge has one of the only two buy ratings on Clorox, according to FactSet. The firm has a $173 per share 12-month price target.

Streaming platform Netflix, which promotes staying in bed and binge watching television, is only down 5% this week. The “stay-at-home” stocks theme has emerged as trading narrative this week, like in-home cycling company Peloton and video conferencing provider Zoom Video.

Exchange company Cboe Global Markets, is benefiting from the surge in trading this week, as U.S. stocks lost $4 trillion in value ahead of the open on Friday. Cboe, the creator of the commonly used fear gauge or Volatility Index, said it has seen elevated volumes in its VIX futures products, according to Piper Sandler.

Health, clinical research and biotech companies are also in focus as they rush to find a treatment for the deadly coronavirus. Regeneron Pharmaceuticals, Quest Diagnostics and Allergan are all less than 10% from their recent high. Steris, one of the leading providers of infection prevention, is only down 5% this week.

Home construction company NVR could be getting a boost from the low interest rate environment, which could boost refinancings. Bonds yields have plunged this week as investors seek safe havens amid the massive uncertainty.

Tiffany& Co., the stock that is least from its 52- week high, is being sparred mainly because it is being acquired by luxury brand company LVMH.

— with reporting from CNBC’s Michael Bloom.

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Source: https://www.cnbc.com/2020/02/28/the-sell-off-is-sparing-only-a-handful-of-stocks-with-clorox-among-them.html

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