A humorous look at the companies that caught our eye, for better or worse, this week
Costco Wholesale (STAR)
Panic selling: What’s happening on the stock market. Panic buying: What’s happening down at your local Costco. Fearing that the coronavirus will render them housebound if they get ill or face quarantine, millions of shoppers emptied Costco’s shelves of hand sanitizer, disinfecting wipes, bottled water, canned goods and toilet paper. Costco’s same-store sales soared 12.1 per cent in February, the company said, attributing about one-third of the increase to coronavirus fears. With the lineups only getting longer in March, investors apparently think it’s time to load up on Costco’s stock.
S&P 500 (Star)
Everyone knows the stock market is volatile, but this is getting ridiculous. After plunging 11 per cent the previous week – its biggest weekly drop since the financial crisis – the S&P 500 surged 4.6 per cent on Monday, plunged 2.8 per cent on Tuesday, rebounded 4.2 per cent on Wednesday and skidded 3.4 per cent on Thursday. “In the index’s history dating back to 1927, we’ve never had a week of alternating gains and losses of more than 2 per cent from Monday through Thursday,” Bespoke Investment Group said. The good news is that, even after Friday’s 1.7-per-cent decline, the S&P 500 eked out a small gain for the week. Are we having fun yet?
Gilead Sciences (STAR)
The novel coronavirus may be bad for the global economy, but it’s been good for shareholders of Gilead Sciences. The company’s experimental antiviral drug, remdesivir, was originally developed as a treatment for Ebola. But after showing effectiveness against other coronaviruses in lab experiments – as well as in cases where remdesivir was provided on a “compassionate” basis to severely ill COVID-19 patients – the drug is now in formal clinical trials in China and the United States, with more countries to follow. When the results are known in April, Gilead’s stock price will tell you everything you need to know about whether the drug worked or not.
Spin Master (DOG)
Investors’ heads must be spinning after all the bad news from Spin Master. In January, the toy maker warned that gross product sales would fall 1 per cent in 2019, down from a previous estimate of low single-digit percentage growth. In February, it announced the departure of two senior executives. And this week, the company posted a fourth-quarter net loss of US$17.2-million and said it expects 2020 gross product sales to fall “toward the higher end of the mid-single-digit range“ in part because of “supply chain and other disruptions” from COVID-19. Who knew toys could make people so unhappy?
InterRent REIT (STAR)
Think apartment rents are outrageous? Apartment real estate investment trusts aren’t exactly a bargain, either. Driven by high occupancy levels and a dearth of new supply, residential REIT unit prices have been surging as apartment owners spruce up their units and jack up prices for incoming tenants. Shares of InterRent continued their dizzying climb this week, lifted by strong fourth-quarter results. But with the units now trading at more than a 20-per-cent premium to the REIT’s net asset value, investors might want to think twice before signing a lease.