Learn from Jim Cramer: Revised COVID-19 Index and Stocks to Consider Buying Now (June 2020 Ver.)

Focus of today’s article is Cramer’s Covid-19 Index as of June 29, 2020. The Index is made up of 100 stocks that are expected to show good performance even in an economy under the coronavirus pandemic. This Index was first introduced on “Mad Money” in April 2020, and was partially revised on May 26, 2020. On June 29, 2020, the index was further revised.

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1. Historical COVID-19 Index

1.1 Original COVID-19 Index (April 2020)

As explained in below article, Jim Cramer introduced “Cramer’s COVID-19 Index” in his show, “Mad Money w/ Jim Cramer” on April 27, 2020.

The Cramer’s COVID-19 consists of around 100 stocks (17 sectors) whose prices have been rising even during pandemic, or expect to rise further after the pandemic ends.

1.2 May 2020 version of COVID-19 Index

During the May 26, 2020 episode, 10 stocks were removed from Camer’s original COVID-19 Index, and added 10 new stocks, instead.

2. Revised “Mad COVID-19 Index” by Jim Crmer(from June 29, 2020 Mad Money Episode)

2.1 COVID-19 Index (June 2020; Revised Ver.)

During June 29, 2020 episode, second revision was made to the COVID-19 Index. This time, three stocks were replaced with three other stocks. Following table shows latest COVID-19 Index which reflect both May 26, 2020 revision and June 29, 2020 revision.

In the table, stocks which were added in May are shown in blue, and stocks added in June were shown in green. (There was no discussion regarding to which sectors each of new stock should belong in May and June episodes. Therefore, assignment to each sector are made based on my judgement.)

  Sector Company Name (Ticker Symbol)
Beverages PepsiCo (PEP), Boston Beer (SAM)
Cloud software Salesforce (CRM), Adobe (ADBE), Zoom Video (ZM), RingCentral (RNG), Slack (WORK), CrowdStrike (CRWD), Okta (OKTA), Zscaler (ZS), Cloudflare (NET), Coupa Software (COUP), DocuSign (DOCU), Everbridge (EVBG), Veeva Systems (VEEV), Twilio (TWLO), VMWare (VMW), Fastly (FSLY)
Consumer packaged goods Clorox (CLX), Colgate-Palmolive (CL), Procter & Gamble (PG)
E-commerce Chewy (CHWY), EBay (EBAY), Shopify (SHOP), Prologis (PLD), Etsy (ETSY)
Financials MarketAxess (MKTX), Tradeweb (TW), Square (SQ), PayPal (PYPL), S&P Global (SPGI)
Video games Activision Blizzard (ATVI), Electronic Arts (EA), Take-Two Interactive (TTWO)
Home entertainment providers Netflix (NFLX), Spotify (SPOT), Akamai Technologies (AKAM), The Trade Desk (TTD)
Health care Abbott Laboratories (ABT), AbbVie (ABBV), Centene (CNC), UnitedHealth Group (UNH), Gilead Sciences (GILD), Regeneron (REGN), Sanofi (SNY), Danaher (DHR), Thermo Fisher (TMO), Eli Lilly (LLY), DexCom (DXCM), Johnson & Johnson (JNJ), Masimo (MASI), Perrigo (PRGO), Pfizer (PFE), ResMed (RMD), Zoetis (ZTS), Emergent BioSolutions (EBS)
Mega-cap technology Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Microsoft (MSFT)
Samll-cap tech Citrix Systems (CTXS), Logitech (LOGI), DataDog (DDOG), Splunk (SPLK), Wix.com (WIX), Palo Alto Networks (PANW)
Packaged food Campbell Soup (CPB), Conagra (CAG), General Mills (GIS), Hormel (HRL), J M Smucker (SJM), McCormick (MKC), Mondelez (MDLZ)
REITs American Tower (AMT), Crown Castle (CCI), CoreSite Realty (COR), Equinix (EQIX)
Restaurant survivors Chipotle (CMG), Domino’s Pizza (DPZ), Wingstop (WING)
Retail survivors Costco (COST), Walmart (WMT), Dollar General (DG), Home Depot (HD), Target (TGT)
Semiconductors Advanced Micro Devices (AMD), Nvidia (NVDA), Marvell Technology (MRVL)
Safety stocks Dominion Energy (D), Verizon (VZ)
‘Exotics’ (Catch All) BioNTech (BNTX), Moderna (MRNA), Livongo (LVGO), Teladoc Health (TDOC), Barrick Gold (GOLD), Beyond Meat (BYND), Peloton (PTON), Chegg (CHGG), Newmount Mining (NEW)

参照:(1) Mad Money April 27, 2020 Episode (Original COVID-19 Index)
(2) Money May 26, 2020 Episode (Revised COVID-19 Index)
(3) Mad Money June 29, 2020 Episode (Re-Revised COVID-19 Index)

2.2 Revisions made from May 2020 Version 

Below is a list of stocks which were removed or added to the Index during June 29, 2020 episode.

2.3 Top Performing Stocks in COVID-19 Index

In June 29, 2020 episode, Mr. Cramer identified “Top Performer since Update on May 22, 2020”, i.e., stocks whose prices went up during May 22 to June 29.

As shown below, I took the liberty of reviewing to what extent price of each stock has been increased during May 22 and June 29. In this analysis, I used closing price published in Yahoo Finance. PE Ratio in the list is also taken from Yahoo Finance as of June 29, 2020.

(Ref.)
12/31/2019
Closing price
5/22/2020
Closing price
6/29/2020
Closing price
5/22 vs 6/29
growth rate
(Ref.)
PE Ratio
Zoom Video (ZM)$68.04$171.06$248.5645.3%1470.77
Spotify (SPOT)$149.55$190.17$265.1439.4%N/A
Zscaler (ZS)$56.09$76.94$105.3937.0%N/A
DocuSign (DOCU) $74.11$133.00$171.6729.1%N/A
Etsy (ETSY) $48.81$77.48$102.8932.8%167.3
The Trade Desk (TTD) $259.78$307.06$406.1532.3%159.03
Livongo Health (LVGO) $24.16$58.46$71.5622.4%N/A
Square (SQ) $74.69$81.49$103.6827.2%156.85
Peloton (PTON)$28.40$45.81$57.2124.9%N/A
Cloudflare (NET)$17.06$28.26$35.1124.2%N/A

2.4 Value Stocks in COVID-19 Index

Having said that, since price of stocks listed 2.3 above have risen so much, it might be a bit late to buy now (it is possible that the price of those stocks might decline if they are purchased now). Also, most of the stocks listed above related to technology sectors. Therefore, it seems Mr. Cramer thinks that considering economic cycle, we can expect higher risk-rewards if we purchase the stocks which belong to the sector which might recover from now on.

“As the pandemic flares up again, get ready after the industrial rotation ends. It’s time to circle back to the blue-chip Covid stocks that are still way off their highs. That’s what offers the best risk-reward,” he said. “I love a rotation. They throw out the good, they buy the bad and then they change their mind two days later.”

(Reference: https://www.cnbc.com/2020/06/29/cramer-adds-new-stocks-recommends-buying-12-laggards-in-his-covid-19-index.html)

For such reason, in June 29, 2020 episode, Mr. Cramer listed following stocks as “Blue-chip Under-performers to Consider Buying”.

Similar to 2.3, I checked to what extent price of those stocks have been changed during May 22 and June 29. Same with above, I used closing price of each company which are published in Yahoo Finance. PE Ratio of each company in the list is also taken from Yahoo Finance as of June 29, 2020.

(Ref.)
12/31/2019
Closing price
5/22/2020
Closing price
6/29/2020
Closing price
5/22 vs 6/29
growth rate/(rate of decline)
(Ref.)
PE Ratio
Crown Castle (CCI)$142.15$156.20$162.303.9%91.69
UnitedHealth Group (UNH)$293.98$289.94$289.76-0.1%20.28
Procter & Gamble (PG)$124.90$112.60$117.664.5%63.39
Conagra Brands (CAG) $34.04$32.68$33.703.1%21.4
Campbell Soup Company (CPB) $49.42$48.35$49.251.9%9.76
Barrick Gold (GOLD) $18.59$26.32$26.13-0.7%10.84
Verizon (VZ) $61.40$54.10$54.691.1%12.35
Walmart $119.40$124.33$119.06-4.2%22.64
AMD (AMD) $45.86$55.17$50.28-8.9%118.03
Johnson & Johnson (JNJ)$145.87$144.37$139.04-3.7%21.7
Pfizer (PFE)$39.18$37.50$32.64-13.0%11.66
Centene (CNC)$62.87$64.84$62.59-3.5%33.63

Please note that the above information is that of as of June 29, 2020, and stock prices as well as situations surrounding the companies constantly change. In this respect, please make individual decisions regarding when to buy any stocks. Also, please understand that this article does not recommend investments in any particular stock.

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