Throughout this pandemic, there have been some winners and many losers. We've already done an article talking about three sectors that benefitted, now it's time to talk about the ones that have been badly hit.
Essentially all three sectors we're talking about today have been damaged because of lockdown and social distancing procedures
#1: Airlines & Aircraft manufacturers
With most of the world in lockdown and not going anywhere anytime soon, many airlines have been tremendously affected and this can be seen in their respective share prices.
American Airlines, Boeing, Southwest Airlines, just to name a few, have seen their share price drop more than 50% since the start of the pandemic.
Without a definitive end in sight to lockdown restrictions and consumer sentiment towards travel at arguable all-time lows, we're going to have to wait a while before we see this sector rebound back to the strength at which it used to be at.
#2: Real Estate
Again, another sector of business that has been heavily affected by the lockdowns and implemented social distancing laws.
In order to adapt to the situation, agents have come up with some ingenious ways to still provide their clients with a tour experience, such as hosting live tours and/or agents taking angles of different rooms that potential buyers request images and videos of. However, a virtual experience still falls short to the much preferred in-person experience, as clients are better able to really understand and feel the makings of the property, which is especially important since it won't be a light investment.
Different renters, small businesses, and big-box retailers alike are having trouble dealing with store closures and rent management. Many Canadian REIT's as of right now have shown significant share price drops because of this, making for discounted stocks. However, the silver lining to this is that certain REITs have been forced to cut back on their dividend yield because of decreased, so make sure to research if your specific REIT is deciding to cut back on dividends because of the changing climate.
#3: Tourism/Vacation-based Companies
At this point in time, consumers aren't exactly looking for vacation spots to travel this summer.
With many countries in lockdown and some not even allowing entrance, the tourism market globally has taken quite a substantial hit. Take Carnival Corporations, for instance, currently trading for around $14.34 after being knocked down from its high in mid-February of around $43.34. However, the corporation plans to resume cruises on August 1, with its first batch of sailing set to start in China, and so we'll see how post-pandemic operation procedures look.
Royal Caribbean, a cruise holding company, is also experiencing the same problems with a lack of passengers. Both companies, and many other cruise companies, cannot sail in US waters until July, as ordered by the CDC. This is a real concern, as the companies are forced to sit and stagnate until the whole thing blows over.
These three sectors, along with many others, have been impacted by covid-19 and the ensuing pandemic. With no clear plan set as to when businesses will return back to normal, we can only sit and hope that share prices can rebound back to what they once were. Now would be the time to take a look at stocks in these sectors, and in a year or two, possibly double, or even triple your investment. Who knows.
Any thoughts? Feel free to comment below