A recent research note from strategists at JPMorgan (NYSE: JPM) suggests traders should consider shorting these companies once progress on a coronavirus vaccine has been scientifically established.
They are at the “upper echelon of momentum and have crowded positioning, that could see the second derivative of their profit growth decrease as consumer / corporate activity normalizes,” the JPM team explained.
The encouraging results from Pfizer (PFE) and BioNTech’s (BNTX) COVID-19 vaccine study, which according to Pfizer CEO Albert Bourla has a 90% effectiveness rate, it’s a good reference to JPMorgan’s list that includes some obvious names like Zoom Video Communications, Inc. (ZM) and Fiverr International (FVRR), whose stocks saw a 507% and 556% spike, respectively, amid the pandemic.
But the list also includes companies such as direct-to-student learning platform Chegg, Inc. (CHGG), up 100% year-over-year (y/y), interactive fitness provider Peloton Interactive, Inc. (PTON), up 305% y/y, the e-commerce business firm Wayfair Inc. (W), up 182 y/y, and Central Garden & Pet Co. (CENTA) and Vista Outdoor Inc. (VSTO) that aren’t as well known.
It should be noted that JPMorgan’s list should not be viewed as a fundamental call but as a tactical bearish trade opportunity for the stay-at-home stocks which are clearly sensitive to current market factors affecting their movement.
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