Finding diamonds in the rough.
That's the goal of Jim Cramer's "Mad Covid-19 Index," a collection of roughly 100 stocks that investors can look to for returns during the coronavirus pandemic.
The index devised by the host of CNBC's "Mad Money" includes names such as Netflix, Home Depot and Roku. It climbed more than 7% last week and has a nearly 27% percent gain for the year.
Todd Gordon, managing director at Ascent Wealth Partners, said Netflix was one of his top picks given the benefits of the stay-at-home environment for the company.
Netflix reported strong user growth in its April earnings release, doubling its expected subscriber growth with 15.77 million global paid net additions.
"The chart looks really solid," Gordon told CNBC's "Trading Nation" on Friday. "There's been sort of three higher lows leading to this recent 2020 breakout at 420. Resistance is broken. We like it and we hold it."
Gordon also saw potential in Zoetis, saying that "millennials in the new social distancing digital age ... are likely to own more pets." The company is a spinoff of Pfizer that specializes in pet medicines, vaccines and diagnostic products.
"We spend 100 billion a year on our pets. A third of this goes to vet care," Gordon said. "So if you look at the chart, it's had a very strong pattern pre-Covid. Obviously, we sold off. The bounce back has been solid."
"We're sort of caught in a range at about 135 and if we can push through, we should be good to go," Gordon said.
John Petrides, portfolio manager in the wealth division of Tocqueville Asset Management, said in the same interview that Cramer highlighted a key investment theme in his index: "growth plus income."
"On the growth side, I think that we've been moving towards a cashless society," Petrides said. "I think one of the trends post-Covid-19 is we're going to move to more of a cashless society, and that favors PayPal, which owns Venmo."
As for the income approach, Petrides said the possible depths of the recession and lower-for-longer interest rates have him looking at "staple stocks that pay out a very high dividend" such as Verizon and biopharmaceutical company AbbVie.
"We like things like Verizon, where we have the data components of the business with a strong business model with a dividend yield above 4%," he said. "And then AbbVie, who in the next couple of weeks will close the transaction of Allergan, and AbbVie is paying investors north of [a] 5% dividend yield."
Disclosure: Petrides and/or his family own shares of PayPal, AbbVie and Verizon. Ascent Wealth Partners owns shares of Netflix and Zoetis.
