Grading 3 Pandemic-Era Stocks That Are Making Surprise Comebacks
I'm buying these three names as they see resurgences after remarkable rises during the COVID-19 pandemic.
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Just over five years ago, the COVID-19 pandemic was officially declared. At that time, a handful of previously unknown and/or unpopular stocks suddenly gained traction with investors, skyrocketing to spectacular gains.
For most of those pandemic-era stocks, the gains didn’t last. After peaking in 2021, many of these names fell back to earth, leaving investors disenchanted.
Now, after a few quiet years, a handful of pandemic-era stocks are gaining momentum again. Some are even outperforming the major stock indexes.
Let’s take a look at three names from the pandemic era that rose, fell and are now rising again:
1. Teladoc Health (TDOC)
What’s up, doc? Not Teladoc TDOC.
The U.S.-based virtual healthcare company has lost 87.87% of its value over the past five years. The stock has fallen by over 95% since reaching its all-time closing high of $294.54 back in 2021.
Like a phoenix rising from the ashes, Teladoc is finally forming higher highs and higher lows. The stock is trading well above its 50-day (blue) and 200-day (red) moving averages, and recently reached a six month high.
Teladoc’s rally has been accompanied by a surge of volume (shaded yellow), an indication that institutional investors may be buying the stock. If the stock can climb past $16.82, it could fill a gap from last February (point A), placing the stock at $20.50.
Teladoc is scheduled to report earnings on February 26.
GRADE: B+
2. Pinterest Inc. (PINS)
Once high-flying Pinterest is now a beaten-down stock. Pinterest PINS shares have lost 57% since reaching an all-time high of $89.15 four years ago.
Pinterest gapped higher earlier this month after reporting earnings, and since then the stock has formed a flag pattern (black dotted lines). The pattern projects Pinterest to the $45 area. The gap occurred on heavy volume (green arrow), a positive sign.
GRADE: B+
3. Zillow Group (Z)
Four years ago, in February of 2021, Zillow Z touched $200 for the first time, marking its all-time high. Today, the stock trades 60% below that level but the U.S.-based online real estate marketplace is once again gaining traction.
Shares of Zillow have gained 43% over the past six months. Over that time, the stock has maintained a bullish trendline (black dotted line). Zillow’s 50-day (blue) and 200-day (red) moving averages are trending higher along with the stock.
Earlier this month, the stock dipped after Zillow narrowly beat analysts’ estimates for earnings and revenue. If Zillow can break above $89, its next major resistance point is $103.
GRADE: B+
I'm opening positions in all three names, and will add to those positions if and when appropriate. Since Teladoc is reporting earnings soon, I'm starting with a smaller initial position in that stock.
At the time of publication, AUTHOR was long TDOC, PINS and Z.
