Mad Money

Jim Cramer reveals top four stock picks amid coronavirus uncertainty

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Key Points
  • "I don't want to profiteer off an epidemic that's already killed 2,000 people, but we need to acknowledge how this coronavirus outbreak is changing the world," CNBC's Jim Cramer said.
  • "And, yes, some companies are benefiting from that, because they benefit from keeping us healthy," the "Mad Money" host said.
  • "You've got Clorox, Zoom Video and Teladoc on reality, Gilead on hope. That's about it," he said.
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Top stock picks amid coronavirus uncertainty

CNBC's Jim Cramer on Tuesday laid out a shortlist of companies that can benefit from the coronavirus outbreak.

"I don't want to profiteer off an epidemic that's already killed 2,000 people, but we need to acknowledge how this coronavirus outbreak is changing the world," the "Mad Money" host said. "And, yes, some companies are benefiting from that, because they benefit from keeping us healthy."

"While this virus has been a colossal contributor to a slowdown in the global economy, it simply doesn't lend itself to goods that are working," he added. "You've got Clorox, Zoom Video and Teladoc on reality, Gilead on hope. That's about it."

Volunteers in protective suits disinfect a factory with sanitizing equipment, as the country is hit by an outbreak of the novel coronavirus, in Huzhou, Zhejiang province, China February 18, 2020.
China Daily | Reuters

Clorox

A cure has yet to be discovered for the novel flu-like virus. Consumer are likely to turn to Clorox disinfecting products — bleach and wipes — that can kill germs to play their part in keeping the coronavirus at bay, Cramer said.

He added that Clorox's cleaning business, which makes up 34% of the company's revenue, can offset weakness in the company's household segment. The household segment suffered double-digit declines in two of its past three quarter, according to FactSet.

"You can't afford not to have wipes of some sort because of the surface issue," the host said. "You also know that bleach can kill it on contact on your clothes if they touch the virus."

Clorox CEO told Cramer in an interview earlier this month that the company has not seen an "impact on sales just yet," but that it would build inventory "should consumers, customers and communities need it."

"Clorox is incredibly well run, the cost savings from their restructuring are coming through and I think the stock is a buy, which is why it's an integral part of my charitable trust, as I've been telling members of the ActionAlertsPlus.com club," Cramer said.

Zoom Video

Demand for Zoom Video Communication's videoconferencing and collaboration tools that allow employees to work from home has shot up because of the coronavirus epidemic in China, the company's CEO Eric Yuan said in a "Mad Money" interview earlier this month.

Businesses closed operations in China, particularly in the outbreak's epicenter of the Hubei province, to limit their employees' chances of coming in contact with the disease. Zoom Video shares are up almost 42% year to date, including a roughly 10% gain since the Feb. 3 interview.

Cramer thinks the stock is set to break through its all-time high of about $107 it set in June. The stock is within $11 of the mark.

"I can't imagine their sales slowing down just when the virus starts to spread beyond its epicenter," he said.

Teladoc

Shares of Teladoc Health, the telemedicine company that connects patients with a doctor remotely, are up 40% in 2020.

"People are starting to realize that it stands to benefit, which is why the stock roared almost 5% today," Cramer said.

Gilead

Cramer said he would take a chance on Gilead, a biotech company that is working on a coronavirus drug. The stock pays investors a 4% yield, he noted. At $67.01, the stock is more than $2 off its June closing high.

"If any drug company is going to solve the puzzle of what to give people who've been hospitalized with COVID-19, I bet it's Gilead," Cramer said. "Even if they fail, the stock's too cheap to ignore here."

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Some companies are benefiting from the coronavirus outbreak, Jim Cramer says

Disclosure: Cramer's charitable trust owns shares of Clorox.

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