- So right now, two sectors have sold off massively.
One of them is travel, and the other one is energy.
And in particular, we have seen
massive sell-offs taking place with airlines,
as well as cruise lines, casinos, hotels,
and other travel related industries.
And if you know anything
about Warren Buffett style of investing,
one of the things that he says is to "Be greedy
"when others are fearful,"
and there are certainly a lot of fear
and pessimism in the market.
Now that being said, guys, there is nothing telling us
that this is the bottom.
Stocks could definitely fall further,
and that is always the risk you run
when you buy into a bleeding market.
But if you're up for the risk,
there could be massive upside with some of these stocks.
So what we're gonna cover in this video
is three particular stocks, or industries,
And then two particular stocks that might be a good hedge
against said virus.
Now before we get into that, guys,
I just have to make this statement,
that I am not a financial advisor.
This is not financial advice.
And you should always do your own due diligence
before you invest in the stock market,
or anything out there.
But that being said, guys, let's get into the video.
All right guys, so here we are, inside of my portfolio.
This is the M1 Finance Investing Platform,
and this is my main brokerage.
If you guys wanna check this platform out,
it is great for dividend investors, and longterm investors,
and they also have expert built portfolios
that are completely free to invest in.
I have a link to them down in the description below,
and I also have a link to a free 30 minute video training
I did that shows you step-by-step
how to invest with M1 Finance.
Full transparency here guys, I am affiliated
with M1 Finance, so if you do use my link,
I may earn a small commission in the process.
That being said, guys, the first category of stocks
I wanna talk about is airline stocks,
since that was a new addition to my portfolio,
and I bought shares of American Airlines earlier this week.
Now we're gonna talk about four main airline stocks
very briefly, and take a peek at the charts.
But in a nutshell, all of these airline stocks
are down massively right now, because of travel fears.
A lot of countries have travel bans going on right now,
and pretty much nobody is looking to travel right now
for vacation or leisure,
because of fears of contracting the virus.
So as a result, these airline stocks have absolutely tanked,
and some more than others.
And overall, if you look at the market today,
this was another very red day in the market.
I'm recording this on Thursday, and as you can see here,
we had another big correction in the stock market.
The DOW is down about 3.5%, S&P down about 3.5,
this has been another very red day in the market,
and a lot of these airline stocks have just tanked today.
So let's go over a couple of these now.
So the first one here is American Airlines.
This is the stock that I purchased,
and if we jump over to my portfolio quick,
and look at my holdings,
I'll show you guys, just to be transparent with you,
I bought shares at a cost basis of 17.84,
so right now I am down about 10%
on my shares of American Airlines,
and this is what you might run into,
is that even though this stock is down massively,
there is no saying
where stocks are going to go in the short term.
I just know that I personally believe
American Airlines is worth a lot more
than the current valuation of the market,
but in the short term,
I have no idea where that share price is going to go,
and if it continues to fall, I will simply buy more stock,
and average down, because I would love to own
even more of this stock.
I have a very small starting position here,
of around $2,000.
But if we look at the last six months here,
American Airline stock is down 33%.
And this is a stock that has a P/E ratio of 4.7,
which is extremely low.
And they are a dividend payer.
Now we're gonna do more of an in-depth analysis
of American Airlines, in my next stock portfolio update,
so we're not gonna cover much about them right now.
I'm just gonna make you aware
of a couple of these airline stocks
that have fallen massively in the short term.
Next up we have
another massive airline here, Delta Airlines,
currently trading at a P/E of just 6.3,
with a slightly higher dividend yield.
And over the last six months,
this stock has not fallen nearly as much,
but they are down 16.65%.
One of the reasons why American Airlines
has fallen so sharply
is because this company has a pretty sizeable debt load,
which makes them a higher risk play.
So that's why I personally bought American Airlines.
I feel there's more upside,
but there's also more risk,
because that company has more debt,
which means in a bad economic condition,
this company has a lot more debt that they are servicing,
than these other airlines,
which means these other airlines
are in better shape financially.
However, that makes them less risky,
with less potential upside, in my opinion.
Next up, we have another massive airline here,
United Airlines, trading at a P/E of five,
which is closer to American Airlines,
but slightly more expensive.
And over the last six months,
this stock is down just about the same
as American Airlines, down 30.72%.
Now I'm not familiar with United Airlines,
I'm not sure what the debt load of this company is.
I would have to take a peek at the balance sheet.
But if you are looking to buy an airline stock,
these are the common ones people pick,
and then the last one on the list here
is going to be Southwest, which we'll take a peek at now.
And this company trades at a P/E of of 10.6.
Now, this is a fantastic company,
as far as their track record.
And they're one of the best companies out there
as far as their operating history,
and their dividend history.
But as a result, they trade at a pretty high valuation.
I'm not saying high, in terms of the market,
but if you look at this stock,
compared to other airline stocks,
it's about two times as expensive as American Airlines,
and United Airlines, based on that P/E ratio.
But that being said, even this stock fell sharply today.
And if you look at the last six months here,
they are down 10.64%.
So I personally went with American Airlines,
because I see more potential risk,
but also more potential upside.
Whereas if you're looking for
a more conservative airline pick here,
you might want to consider Southwest Airlines,
or Delta Airlines, since they haven't fallen as sharply.
Okay, so next up on my list here,
the second group of stocks to consider
is these cruise line stocks,
because they are down massively.
You have Norwegian Cruise Line, Royal Caribbean,
and Carnival Cruise Line,
probably not a stock or industry
I'm going to invest in personally,
but it is an area that has sold off massively,
and the reasons are pretty simple guys,
there was a virus outbreak on a major cruise line,
and as a result, pretty much every one of these cruise lines
has canceled cruises that were bound for Asia,
and I don't know anybody right now
that's chomping at the bit to get on a cruise.
So, again, it's concerns
about the future happens for this company,
based on people's fears of travel,
these stocks have sold off massively.
So if you look at Norwegian Cruise Line here,
over the last six months, they are down 36.91%,
currently trading at a P/E ratio of 7.8.
Next up we have Royal Caribbean,
trading at a slightly higher P/E ratio of 8.7,
and boy was this a nasty day.
16.29%, down today, and over the last six months,
this stock is down 25.79%.
So this stock hasn't sold off as much
over the last six months.
But it also has,
I mean if you look at the last three months here,
it's been even a more substantial sell-off,
'cause they had a bit of an uptrend here,
but yeah, over the last three month,
they're down about 35%,
in a similar trading range as Norwegian Cruise Lines.
And then finally we have Carnival Cruise Lines here,
down 14% today, and over the last six months,
they are down 28.04%.
So between airlines, and between these cruise lines,
you pretty much have a 30% sale going on,
maybe even more with some of these companies,
based on the debt load, or unique characteristics
of each company.
And based on your risk tolerance,
you know, you may wanna go with one
that has sold off massively,
or you may wanna be more conservative,
and pick one of these companies
that has a better financial situation,
you know, based on their balance sheet.
But the general idea here with these airline stocks,
and with these cruise lines,
is that these fears of the virus
are going to blow over at some point,
and we are going to see it under control.
And so long term, the values of these companies
should not be affected.
So you gotta ask yourself, do you think that
American Airlines is 30% less valuable
than it was six months ago.
If you think it is, then it's not a stock you would buy.
But if you're thinking
that this just a overblown sell-off here,
this is where opportunities could lie.
All right, moving on for the third stock,
I just have one company to mention here.
There are a number of different stocks you could purchase,
involved in the oil and gas industry.
But I chose Exxon Mobil
because they're on the DOW Jones Industrial Average.
I don't personally know much about this company.
It's another industry I'm just not really a fan of.
I don't know much about it,
so I probably wouldn't be a buyer.
But this is a stock that has sold off massively
over the last couple of years.
And it now pays a dividend of upwards of 6.5%.
And right now, as crazy as it sounds,
Exxon Mobile is trading at about a 15 year low,
which means this stock is really been battered
in the last couple of years,
and even over the last decade.
If we look at the last six months here,
this stock is down 25%.
And we can see there was a pretty sharp sell-off here
as soon the virus fears spread.
And the reason behind this is pretty simple.
With the disruptions in trade,
and the fear of traveling,
well that's gonna cut down on consumptions of oil,
so that could create a surplus on the market,
affecting oil prices.
So these things all kind of snowball together.
And that is why we saw the oil industry,
the energy industry, and the travel industries
really hit the hardest,
because they are all related to each other.
All right, next up, number four here,
here's a stock that could actually do well,
based on sales of the medical masks.
So as I'm sure you guys have seen,
medical masks are in a massive shortage right now.
You have people trying to sell them for 20 to $30 per mask,
on Amazon we see price gouging going on.
But a company that will benefit from this is 3M.
They are the largest manufacturer of these medical masks.
And multiple articles have said that 3M
is ramping up their production,
but they're still unable to meet that demand,
and this stock has sold off over the last three months.
It's down 6% over the last six months, about the same.
So this was a stock that was trading in recent years,
over the last year at a high of 220,
now down to 150 per share.
A pretty solid dividend payer,
and they're also part of my investment portfolio.
Now 3M is involved in many different cyclical businesses,
and they are going to be hurt
by some of this easing of trade,
and not as many people out and about.
But they are going to do well,
and certainly sell more masks than anticipated.
So this could be an interesting hedge
for someone who's looking to buy a company
poised to do well, in the current conditions.
And then lastly, guys, I have one more stock here,
another hedge against the virus concerns,
and that is the Clorox Company.
And this is evident right here, guys.
The market sells off, 3.5%.
Clorox stock is up almost 2%.
And if you look at the last six months,
I don't even know if this stock is down.
In fact, they're not.
Over the last six months, they're actually up 6.3%,
and that's because people are diving into this stock,
because they realize that as people are concerned
about the virus spreading and germs,
well, what are they gonna be buying?
They're gonna be buying Clorox bleach,
a known chemical that can kill this virus,
and other germs, and other products that Clorox owns.
So, if we do see this virus spreading
across the United States,
we will definitely see more sales of cleaning products,
which could definitely benefit the Clorox Company.
But anyways guys, that is going to wrap up this video.
I hope you enjoyed it.
Of the stocks I mentioned in this video,
the only ones that I own are American Airlines,
and I also own 3M.
Like I said, I don't know a lot about the cruise lines,
probably not a stock I would buy personally.
Same things goes with Exxon Mobil,
and other oil and energy stocks.
But they are industries
that have sold off massively right now,
and it may be an area
that you want to consider investing in.
Let me know what you guys think about this
down in the comment section below.
I would love to hear what you guys think.
Like I said, if you wanna check out that free training,
for M1 Finance, that is down in the description below.
But thank you so much for watching, guys.
And I will see you in the next video.
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