Looking Ahead to Recovery From Coronavirus

Beyond COVID-19

This is not yet another doom and gloom or hand waving analysis of the Coronavirus. Instead, we are going to look for opportunities as we emerge from the big scare.

It all started in China and has since loomed large across many countries. Lately, China is reporting fewer new Coronavirus cases every day. Whether we believe these numbers or not, there’s little doubt the Chinese authorities are looking to manage the fallout of the disease. Given the Chinese economy is heavily dependent on manufacturing, there is tremendous pressure to revamp the manufacturing base sooner rather than later.

Assuming China’s manufacturing will begin to slowly come back online in the near future, we have investigated which companies would benefit most. We asked our machines to find companies listed on US exchanges with over 20% exposure to a Chinese supply chain and/or end market. We double-clicked on companies whose stocks are in deep correction territory (i.e. down over 10% from recent highs). Out of ~4,000 publicly traded companies, 96 stocks were identified in deep correction territory which have at least 20% exposure to China. Our algorithms sorted this list based on our machine-generated 12-month forward-looking fundamentals predictions (assumes demand is mostly deferred, not eliminated due to the Coronavirus).

Below we list the top 20 companies that may be poised for big returns when the situation in China begins to normalize. Fundamentals of these companies will improve at different rates depending on the exposure and the industry.

Ticker	Company name	Industry	Market cap ($MM)	China exposure	Change from 52-week high
AMD	Advanced Micro Devices	Semiconductors	56,834	25%	-26%
POWI	Power Integrations	Semiconductors	2,532	55%	-24%
CRUS	Cirrus Logic	Semiconductors	4,022	78%	-27%
IMAX	IMAX Corp.	Movies/Entertainment	922	29%	-43%
STAA	STAAR Surgical Co.	Medical Specialties	1,339	42%	-35%
NVDA	NVIDIA Corp.	Semiconductors	162,817	24%	-22%
ZNH	China Southern Airlines	Airline	9,588	78%	-48%
PI	Impinj	Electronic Production Equipment	513	47%	-46%
FLEX	Flex Ltd.	Electronic Components	5,388	25%	-32%
ATHM	Autohome	Internet Software/Services	8,655	97%	-39%
AVY	Avery Dennison	Containers/Packaging	10,064	25%	-17%
INTC	Intel	Semiconductors	238,528	27%	-26%
OLED	Universal Display Corp.	Electronic Components	7,354	32%	-35%
TPIC	TPI Composites	Electrical Products	758	27%	-43%
MOMO	Momo	Information Technology Services	5,877	100%	-33%
MPWR	Monolithic Power Systems	Semiconductors	7,407	59%	-22%
OXFD	Oxford Immunotec Global	Medical Specialties	343	27%	-34%
AMAT	Applied Materials	Semiconductors Equipment	53,096	28%	-23%

 Source: Big Data Federation, Inc.