With the coronavirus pandemic still in full force, striking fear and panic into the hearts of society around the globe, citizens have scrambled to get ahold of as many cleaning products as possible, leaving many store shelves empty, as consumers hoard disinfectants and cleaners. One beneficiary of all the hoarding, however, is Clorox, whose stock has launched higher in mid-march.
Clorox was already a highly regarded company, but the trepidation the coronavirus has generated in both consumers and investors sent shares rocketing roughly 24% in just a few days. Despite this, investors and analysts say the spread of the coronavirus is a specific situation and the surge the company is receiving from it will end eventually.
“Based on conversations with retail buyers, we estimate COVID-19 related demand could boost baseline disinfectant category trends by three to five times in the next few months as retailers work to rebuild inventory and stay in stock,” Swiss-based UBS Group analyst Steven Strycula told Yahoo Finance on March 16.
In the latest trading session, Clorox closed at $181.51, marking a +0.07% move from the previous day. The stock outpaced the S&P 500’s daily loss of 0.16%. Meanwhile, the Dow lost 0.12%, and the Nasdaq, a tech-heavy index, lost 0.33%.
While some analysts see this as a possible short-term play, disinfectants actually make up only about 25% of Clorox’s sales. Clorox also makes plenty of other products that consumers can use in their houses every day, including Kingsford charcoal, Liquid-Plumr drain cleaner, Hidden Valley Ranch salad dressing, Fresh Step cat litter, and Burt’s Bees lip products, helping the company endure once the coronavirus fades.
For ETF investors who are interested in playing the consumer goods company, ETFs like the iShares Core S&P U.S. Growth ETF (IUSG), the Vanguard Russell 1000 ETF (VONE), the iShares Core S&P 500 ETF (IVV), and the SPDR S&P 500 (SPY) are all good places to start exploring.
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