The first wave of the pandemic was enough to shake the world to its core, decimated whole economies and laying waste to industries and the job market. And even though most people knew that the first wave wasn’t the end of it, and we might have to live through multiple waves of the pandemic, it doesn’t make the second wave any less of a force.
Our defenses and measures are woefully incomplete without a proper vaccine. But the good news is that the vaccine might not be as far away as medical experts first predicted. U.S.-based Moderna, a biotech company, is very close to a working vaccine, and the CEO says if their clinical trials go well, they would be able to mass-produce and distribute the vaccine by the end of November.
If Moderna’s timeline is correct, and another vaccine comes from Pfizer around the same time, it can boost morale and dissipate fear among the population, giving the economy and the stock market strong new legs to stand upon. Several stocks might benefit from a vaccine, but there are two that might skyrocket once the vaccine is available.
A food group company
Restaurants and food businesses, especially ones that rely upon the foot traffic, have suffered terribly during the pandemic. MTY Food Group (TSX:MTY) is one of the companies that saw their stock take a dive down the cliff. In March, the stock price fell about 73% from its pre-pandemic high. That’s about three-fourth of the valuation gone in two months.
Despite the fact that the business took a serious hit, the stock did manage to recover a bit and grew about 163%. Though it’s still far below its pre-pandemic valuation, the stock is on its way up there. And a vaccine could expedite the pace exponentially. The company’s franchises and locations might start seeing foot traffic increase, and sales go up once the fear of the virus is gone.
A gaming company
The Great Canadian Gaming (TSX:GC) is an entertainment and hospitality company with a lot of physical locations like Casinos and race tracks to its name. If it were a computer gaming company or purely an online entertainment company, the pandemic would have been a boon for business. But since it also relies on foot traffic and people visiting its locations, the company’s stock suffered when the pandemic hit.
The share price dropped about 58%, and after a meager recovery, it’s still trading at a price that’s 45% lower than its pre-pandemic value. Unlike MTY, this stock is well poised for recovery-driven growth. And if a vaccine nudges people towards entertainment that this company is providing, after being cooped up in their homes because of lockdowns, the sales and stock could skyrocket.
One danger associated with either stock, especially the great Canadian Gaming Company, is that the market crash might arrive before the vaccine. That might crush the nascent recovery both companies have seen in the last few months and may lessen its chances of recovery and growth. But if the vaccine comes first, it can create a powerful and positive investor sentiment around the company.