Fears surrounding the resurgence of COVID-19 cases worldwide are expected to exert downward pressure on the stock market in the near term. So, we think it could be wise to avoid Airbnb (ABNB), AMC Entertainment (NYSE:AMC), United Airlines (UAL), and Norwegian Cruise (NCHL) because they are vulnerable to significant price declines on their weak financials and bleak growth prospects. So, let’s evaluate these names’ prospects more closely.The COVID-19 Delta variant has already driven up infections internationally. And this month the United States also witnessed a resurgence of COVID-19 cases, through the spread of the Delta variant. According to CDC data, the United States has averaged more than 26,000 new cases per day over the past seven days, up from an 11,000 cases per day seven-day average a month earlier.
Although there has been solid progress on the vaccination front in the U.S., investors are concerned about the possibility of the hyper-infectious variant of the COVID-19 virus delaying economic recovery. Based in-part on this concern, the stock market has been witnessing the most intense selling pressure since October, with airlines, hotels, and travel-related stocks the most affected. All three major benchmark indexes have seen a level of correction over the past week.
Against this backdrop, we think investors should avoid fundamentally weak stocks Airbnb Inc. (ABNB), AMC, Entertainment Holdings Inc. (AMC), United Airlines Holdings Inc. (NASDAQ:UAL), and Norwegian Cruise Line Holdings Ltd . (NYSE:NCLH). They could suffer a major pullback on their weak fundamentals and growth prospects.