Author(s)

Jiayi Tang, Wenjun Li, and Boyang He

Corresponding Author

Jiayi Tang

ABSTRACT

According to Dolbenva Deniza V’s [1] research, the main impacts of the COVID-19 to the global economy include but not limited to a decline in exchange indices a sharp drop in oil prices, a slowdown of the development of the mental market a reduction in output a significant decrease in revenue of airlines and maritime transport, shopping and entertainment centers, the tourism industry, a decrease in the population’s incomes a growth in revenues of the pharmaceutical industry and the global industry of gaming, educational and other online applications, and an increased investor demand for less risky assets. This paper aims to help novices who want to make a stock investment during COVID-19 develop a suitable investment strategy. This article mainly researches three healthcare companies: Abbott Laboratories, Boston Scientific Corp, and Intuitive Surgical Inc. We then conduct further calculations, comparison, and analysis to explore which company is more worthwhile to invest. We also include these three companies’ financial statements. There are two methods- the relative valuation method and absolute valuation- that are used to compare data collected from financial statements of three companies and develop a simple and accessible investment method for stocks. We find that Intuitive Surgical Inc. is more worthwhile to invest by using this method system as for radical investors. The results suggest that the novices should choose the P/E, P/S, and P/B ratio to analyze and identify which is value stock and which is growth stock. Then they should select the best value stock during the value stocks and the same for growth stocks by using the relative valuation method. In the meanwhile, novice investors should analyze the highest value of all stocks according to DuPont analysis. Finally, we offer suggestions for investors based on the different inclinations. If the growth stocks analyzed by DuPont analysis are ranked above the value stocks, and the growth stocks will rise in the future according to the general environment, then, it is recommended that activists invest in the growth stocks. Conversely, if the value stocks are ranked above the growth stocks or the growth stocks will fall in the future, then it is recommended that radicals reconsider. As for conservative investors, it is suggested to invest in the best stock in value stocks.

KEYWORDS

Healthcare companies, Stock investing, Valuation modeling