Worried About a Winter Coronavirus Lockdown? Buy These 3 Stocks Now

Stocks tumbled this week as fears of another wave of coronavirus infections swept the market.

Over the weekend, the number of daily cases rose to record highs in the U.S. and have stayed elevated throughout the week. Much of the Midwest and Mountain West have been at record levels for weeks, and in some areas, infections are straining hospital capacity…

In Europe, daily new cases continue to push into record levels, and some countries have begun imposing lockdown measures, including France, which now has a 9 p.m. curfew across most of the country.

Those data points, along with previous warnings from epidemiologists about the risk of widespread outbreaks in the fall and winter, could lead to incremental restrictions in much of the country and even a full-on lockdown, squeezing the economic recovery. For investors, such an event is likely to push stocks lower since they’re already trading near all-time highs.

But there are a few companies that look like winners even if the U.S is forced into another lockdown. Keep reading to see why these three — Polaris Industries (NYSE:PII)Pinterest (NYSE:PINS), and The Michaels Companies (NASDAQ:MIK) — all could still benefit, despite a coronavirus-related lockdown.

1. Polaris Industries: A winter recreation boom

Recreational vehicle sales and stocks spiked over the summer as the pandemic sparked a surge in demand when Americans sought socially-distant alternatives to typical vacations.

A spike in COVID-19 cases during the winter, including lockdowns, could do the same for winter recreation equipment, including snowmobiles (and off-road vehicles (ORVs) in warmer parts of the country). That’s good news for Polaris.

Polaris is the No. 2 maker of snowmobiles in North America, behind Ski-Doo parent Bombardier, and is the market share leader in ORVs in North America. It also owns the Indian motorcycle brand and makes boats, but ORVs and snowmobiles are its primary source of revenue.

The stock is down 10% year to date since the company’s second-quarter performance was hammered by dealer shutdowns. Revenue in the quarter was down 15%, but there are signs that the company sees a strong second half of the year, with management noting “unprecedented retail demand for our Off-Road Vehicles and Motorcycles through May, June and now July.”

In the third quarter, sales rebounded to a 10% increase (up 15% in North America), while earnings per share jumped 70% to $2.85, easily beating the analyst estimate of $2.19. Management also raised its full-year EPS guidance to a range of $7.15 to $7.30, giving the stock a price-to-earnings ratio under 13, which looks like a bargain considering its pandemic-fueled demand.

Despite the broader economic woes, retail sales have been strong in general, and Americans are likely to spend even on discretionary items like ORVs and snowmobiles if a winter lockdown eliminates other options for spare time and money.

2. Pinterest: A time for escapism

It’s no secret that screen time and the escapism that comes with it have grown during the pandemic, and while a number of stocks have benefited from this trend, Pinterest is head and shoulders above the rest.

Unlike other social media outlets, Pinterest focuses on positivity. It bans political advertising, helping it avoid the tumult over the presidential election, and management says that people come to the site for self-improvement, not necessarily to connect with others. That has been an…

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