Today we are watching…
1. Amazon (#amzn)
The most underrated area to invest during coronavirus might be carrier cargo. It’s the only thing flying. Trade hasn’t stopped. The airlines are resorting to non-human cargo, but there are also pure-play stocks transporting e-commerce goods and medical supplies around the world. There’s demand for transporting pigs, and other livestock to China after an outbreak of swine flu decimated hog herds. The other area is private jets because private planes offer a potentially distanced flight, and if you’re that rich that you own a private jet, you don’t care about the recession.
2. Simon Property Group (#simonp)
This sudden lockdown is a test for balance sheets, and naturally, scores of companies have moved into defense. If any kind of workout was announced pre-corona, companies are claiming material adverse changes (MACs) to renegotiate or wriggle out, post-corona. There have been some deals that have gone ahead, some that have been called off, and some that still sit in limbo. Simon Property Group has escaped a merger with Taubman Centres. It was a hugely political break-up between the two mall companies, and it’s not done yet. Taubman is protesting how Simon Property Group is just walking away. If a court agrees it has a case, its stock could soar as the offer is put back on the table.