2 Stocks to Buy for the Pandemic and Beyond

By newsfeedback@fool.com (David Jagielski)8 days ago


Are you worried that the pandemic might not end for a while? Regardless of your outlook, the stocks listed here have performed well amid the pandemic, and will probably continue to be good buys long after it ends.

Both SmileDirectClub(NASDAQ:SDC) and recently listed Petco Health and Wellness (NASDAQ:WOOF) are businesses that have proven their resilience during a tough year. Although they have been underperforming the S&P 500 over the past 12 months, these stocks are great buys right now, as they have some exciting long-term growth opportunities ahead.

Image source: Getty Images.

1. SmileDirectClub

SmileDirectClub's flexible online business makes it well-suited to meet the needs of consumers who are stuck at home. Rather than physically visiting the dentist to get fitted for aligners, you can simply use an impression kit at home to start mapping a treatment plan for your teeth. And if offices are open, you can go to the company's SmileShops to do an in-person scan. Either way, SmileDirectClub can continue serving customers regardless of whether stay-at-home orders are in place.

Last year, the company's sales of $656.8 million declined more than 12% from its prior-year total of $750.4 million. But its net loss of $78.4 million was also 32% smaller as the company was able to bring down its selling, general, and administrative costs by more than 40%. For the fourth quarter ending Dec. 31, 2020, the company did see progress on its top line with sales of $184.6 million rising 10% from the previous period. And for the next quarter, the healthcare company anticipates that sales growth will be around 5% to 7%. Although SmileDirectClub's bottom line isn't great right now, with strong gross margins at around 70%, a lot of that additional revenue will trickle through and help cover its operating expenses, eventually creating a path to long-term profitability.

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