Few companies emerged unscathed from the stock market’s epic first-quarter bloodbath. The roller-coaster ride began in late February as the coronavirus pandemic reached well beyond China. By the time the quarter ended, the S&P 500 was down 20 percent. One of its worst showings, ever.
But wait. What is that? A handful of companies bucking the trend?
Yes, even in this, the fiercest of storms, equity investors found some kind of shelter. Some companies, including several in Massachusetts, saw their shares rise while everyone else’s headed downward.
Should you bet on them now? Peter Cohan, a business-strategy lecturer at Babson College, offers this advice: probably not. By the time these companies’ shares have risen enough to be noticed, he said, it’s often too late for everyday investors to hop on board. Besides, what happens if this pandemic gets resolved quickly, as everyone hopes? Maybe these stocks will no longer outshine.
However, it’s still instructive to take a closer look at our local winners, as an indicator of where the smart money gets placed, with the companies believed to be best positioned to ride out the hurricane.
Moderna (first-quarter return +53.1%): It’s hard to find another company whose stock rose more during this crisis than Moderna, the Cambridge biotech. Its shares were up more than 50 percent in the first quarter. Why? Well, the answer is easy: So far, Moderna is among the leaders in the race for a coronavirus vaccine. Phase 1 human trials began in the Seattle area last month. Chairman Noubar Afeyan told CNBC last week that Phase 2 trials could begin this spring. Unfortunately, public distribution still probably won’t happen until 2021.
Everbridge (+36.1%): In a public emergency, who you going to call? Everbridge, the Burlington provider of emergency preparedness software, was certainly on the shortlist of investors. The company has won numerous contracts recently with states to upgrade their 911 systems, and it announced a contract last month with Massachusetts to operate the Commonwelath’s mass-notification system, known as COMMalert. Everbridge recently said it has sent more than 15 million alert messages related to the pandemic.
BJ’s Wholesale Club (+12.0%): Anyone who has waited in line at a BJ’s club won’t be surprised to know the stock was among the biggest gainers during this crisis. The Westborough-based retail chain even outperformed rivals such as Walmart and Costco. We don’t yet know the impact all the grocery shopping in recent weeks has had on their revenues.
Another unknown: how the strict policy that BJ’s put in place last weekend, limiting the number of shoppers inside the stores to 20 percent of their capacity, will affect its bottom line.
Vertex Pharmaceuticals (+8.7%): No, Vertex isn’t jumping into the COVID-19 race. But the Boston biotech had reassuring news for investors as recently as March 27. That’s when the company reconfirmed its business outlook for the year and pledged that its supply chain for its cystic fibrosis treatments would remain uninterrupted. The only downside cited: Enrollments in certain clinical trials would need to be put on pause, in part to reduce the burden on the health care system.
Biogen (+6.6%): Biogen’s brand might have been hurt by its association with one of the first prominent coronavirus outbreaks in the United States. But not its stock, apparently. Like Vertex, Biogen isn’t working on a COVID drug. (Biogen, of Cambridge, specializes in multiple sclerosis and spinal muscular atrophy drugs and is developing an Alzheimer’s treatment.) And like Vertex, Biogen had reassuring news last month: No supply-chain interruptions expected. However, Biogen also warned that could change, depending on the pandemic’s impact.
Akamai Technologies (+5.9%): More people are at home working, taking online classes, playing games, and binging on Netflix than ever before. Guess who benefits? Companies such as Akamai that handle Internet traffic and website optimization. Akamai CEO Tom Leighton told WBUR last week that he’s seeing “historic traffic levels . . . across the board.” Goldman Sachs analyst Heather Bellini said Akamai could get a boost as more businesses shift their work online; she upgraded the stock late last month.
While they didn’t see gains in the first quarter, Boston Beer (-2.7%) and American Tower (-5.1%), were among those companies whose shares didn’t take huge hits, either. American Tower is essentially a real estate company, but its portfolio doesn’t consist of offices, malls or apartments. Instead, it’s a network of cellphone towers — and no one expects the demand for those to dissipate anytime soon.
The brewer of Samuel Adams beers, meanwhile, has been hurt by all the restaurant shutdowns. But sales at stores soared as beer drinkers packed their home fridges, according to Nielsen data. An analyst at MKM Partners upgraded the stock, noting that beer tends to hold up well in times of economic weakness. We’ll raise a glass to that — and to getting back to normal soon.