[Editor’s note: “10 Stocks to Invest In for a Post-Coronavirus Whipsaw” is regularly updated to include the most relevant information available.]
My two cents on the investment implications of the global coronavirus pandemic is simple: use the 2020 stock market dip to look for the best stocks to invest in for the long term.
Yes, Covid-19 is a big and scary thing. But it’s also a temporary thing. This is not the first pandemic the world has faced. Nor is it the first bear market or the first recession consumers have faced. Over the past 200 years, we have seen dozens of pandemics, bear markets and recessions. Through them all, the world, the U.S. economy and the stock market have not just survived, but thrived. Stocks have climbed an average of 6.5% (after inflation) for over 200 years … through crashes, pandemics, world wars and recessions. This time won’t be different.
The coronavirus pandemic will increasingly unwind as an economic headwind over the next few quarters. Consumers will bounce back. Economic activity will recover. And eventually, stocks will rebound in a meaningful way.
All of that is really just a long-winded way of saying today is the best time to look for stocks to invest in for the long haul. Knowing that, some of the best long-term stocks to invest in during 2020 market turbulence are as follows:
- Shopify (NYSE:SHOP)
- Okta (NASDAQ:OKTA)
- The Trade Desk (NASADQ:TTD)
- Pinterest (NYSE:PINS)
- Adobe (NASDAQ:ADBE)
- Beyond Meat (NASDAQ:BYND)
- Roku (NASDAQ:ROKU)
- Facebook (NASDAQ:FB)
- Square (NYSE:SQ)
- Chegg (NASDAQ:CHGG)
Best Stocks to Invest in 2020: Shopify (SHOP)
E-commerce solutions provider Shopify is a long-term winner because this company has transformed into the necessary backbone of the future of retail.
Long story short, shoppers are migrating online. As they do, physical storefronts are becoming less necessary, and online websites and social media pages are becoming more necessary. Just as every retailer needed a physical storefront back in 2005 in order to sell product, every retailer needs a website today in order to sell product.
Shopify makes those websites. And they are the best in the world at doing so. More than that, they equip retailers and merchants of all shapes and sizes with a plethora of online selling tools so that they can sell any product or service, through any online channel.
In this sense, Shopify is transforming into the backbone of modern e-retail.
Over the next 10 years, more and more shoppers will migrate online, more and more retailers will lean on Shopify’s online tools to drive sales, and Shopify’s revenues, profits, and stock price will all soar higher.
Best Stocks to Invest in 2020: Okta (OKTA)
Cloud security company Okta has developed a new and better way to secure a company’s online workflows and information. This cybersecurity breakthrough lays the groundwork for the stock to outperform over the next several years.
Specifically, Okta is relying on identity-based cloud security solutions. Instead of covering an entire company’s ecosystem with a “castle” of security — which can be limiting since, if people leave the castle, they are no longer protected — Okta employs a security system which outfits each individual in the ecosystem with their own “body armor” of security. The idea is that, if everyone in an ecosystem is protected, then the whole ecosystem itself is protected, too.
Enterprises love this idea. Identity-based security solutions maximize flexibility without compromising security, and maximizing flexibility is of increasing importance in today’s dynamic, mobile world (especially true in 2020 given that the coronavirus pandemic has forced everyone to work-from-home).
Long term, enterprise demand for Okta’s Identity Cloud solution will roar higher as the enterprise work world becomes increasingly dynamic, mobile, and flexible. As that happens, Okta’s revenues and profits will soar. So will OKTA stock.
Best Stocks to Invest in 2020: The Trade Desk (TTD)
Programmatic advertising leader The Trade Desk is ushering in a new and improved way to advertise. As this new method spreads across the whole ad landscape, TTD stock will continue to outperform.
Programmatic advertising is essentially using data and algorithms to improve and automate the ad transaction process. No more slow human negotiations. No more human error, or guess-and-check processes. Just tons of data informing several algorithms on where and when to put ads so as to optimize audience and reach metrics.
It’s a breakthrough in advertising. And The Trade Desk is a demand-side platform which is pioneering this change for advertisers.
Over the next several years, more and more advertisers will turn towards programmatic advertising and The Trade Desk to help them improve their ad efficiency. As they do, The Trade Desk will become an increasingly important part of the $1 trillion ad landscape, and TTD stock will stay on a winning trajectory.
Best Stocks to Invest in 2020: Pinterest (PINS)
Visual search platform Pinterest has promising long-term upside because all the pieces are in place for this company to become a huge digital advertising player within the next few years.
Pinterest has a huge global audience at over 300 million users. That audience is massively valuable, yet largely untapped from an advertising standpoint. Over the next few years, Pinterest will dramatically grow its ad business, and quite quickly, because as a hub for visual search, Pinterest is a natural place to put shopping, travel, and other experience-related advertisements.
As the company does grow its ad business, revenues will roar higher. Profits will, too, because the digital ad business is a particularly high margin business.
As go profits, so go stocks. So, as Pinterest’s profits roar higher in the coming years, PINS stock will roar higher, too.
Best Stocks to Invest in 2020: Adobe (ADBE)
Cloud services giant Adobe will only grow its reach in the consumer and enterprise cloud landscapes over the next few years. As the company does, Adobe’s revenues, profits, and stock price will all move higher.
Adobe already dominates in the visual and digital cloud worlds, where the company provides cloud-based creative media and digital document solutions. Those worlds are big today. They will only get bigger over the next few years.
Consumers will increasingly turn towards using visual media to communicate with one another. Corporations will increasingly value visual media in their customer experiences. Enterprises will continue on their paper-to-digital transformations.
In other words, the tailwinds supporting Adobe’s core businesses will only gain momentum over the next few years.
That means big revenue and profit growth are here to stay for a lot longer. So are big gains in ADBE stock.
Best Stocks to Invest in 2020: Beyond Meat (BYND)
Plant-based food maker Beyond Meat will continue to ride massive plant-based meat consumption tailwinds over the next several years to drive huge gains in its revenues, profits, and stock price.
There’s little denying that the shift towards plant-based meat will be one of the defining megatrends of the 2020s. Thanks primarily to social media increasing consumer awareness, consumers are simultaneously shifting their consumption decisions to be ESG-positive, or positive for the environment, society, and government.
A shift towards plant-based meat is a cornerstone of this massive consumer migration. For reasons ranging from “its better for the environment” to “you don’t have to hurt animals”, consumers are increasingly pivoting towards plant-based meat consumption. Yes, it’s still niche today. But as this trend picks up momentum in the 2020s, plant-based meat consumption will go from niche, to mainstream.
As it does, Beyond Meat — who is widely considered to be the co-leader in this space alongside Impossible Foods — will increase its presence across the whole food industry. Every fast food chain will inevitably roll-out multiple Beyond food options. Every grocery chain will have Beyond products on its shelf. And most consumers will shift at least some of their diet to plant-based meat, with some going “all in.”
As all that happens, Beyond’s revenues and profits will soar. Alongside soaring revenues and profits, BYND stock will soar, too.
Streaming device maker Roku is a pure play on the booming streaming TV trend that will take over media consumption in the 2020s.
Netflix started the streaming TV trend in the early 2010s. Now, not only are all consumers in the streaming TV channel, but all media companies are pivoting into that channel, too. Disney (NYSE:DIS), Apple (NASDAQ:AAPL), AT&T (NYSE:T), and Comcast (NASDAQ:CMCSA) are among the many media companies that have jumped into the streaming wars over the past few months.
In the 2020s, thanks to this influx of new supply into market, the streaming TV trend will take over the world.
Content will increasingly pivot into the streaming channel. As it does, there will remain little reason for consumers to stay connected to linear TV. They will pivot wholesale into streaming TV. Ad dollars will follow suit.
That’s great news for Roku, who has created the world’s largest ecosystem for accessing streaming TV content, akin to the “cable box” of the streaming TV world. Thus, as ad dollars jump into the streaming TV world over the next decade, a lot of those ad dollars will make their way into the Roku ecosystem.
Roku’s revenues, profits, and stock price will consequently all power higher over the next decade.
Owner of four of the world’s most used digital properties, Facebook is well positioned to keep turning its unparalleled digital reach into huge growth over the next few years.
All four of Facebook’s properties have over 1 billion active users. Facebook is only scratching the surface of how much it can monetize all those users. For example, only two of the four apps are fully loaded with ads (Facebook and Instagram), and none of the apps have successfully cracked the e-commerce code.
Over the next several years, Facebook will populate WhatsApp and Messenger with ad real estate. That will boost the company’s core digital ad business. At the same time, the company will leverage newly announced Shops on Facebook and Instagram to seamlessly integrate e-commerce into its ecosystem, and turn into world of the world’s biggest online retail marketplaces, matching buyers and sellers from across the globe.
As all that happens, Facebook will sustain 20%-plus revenue and profit growth. Sustained 20%-plus growth will drive FB stock higher.
A pure play on the shift towards a cashless world, Square looks well positioned to be a big winner in the 2020s.
Square makes card-reader machines which enable physical merchants of all shapes and sizes to accept card payments. That’s a big deal. Consumers don’t like cash anymore. It’s clunky, it’s easy to lose, and the transaction process takes a long time. Instead, consumers like cards. They are easy to store, convenient, and the checkout process takes seconds.
Over the next several years, cash usage will keep dropping. Card usage will keep rising. More and more merchants will turn towards Square’s card-reader machines. The volume of sales flowing through those machines will go up. Square’s revenues will keep roaring higher. So will profits, since this is a high-margin business.
Even further, Square has built an ecosystem of services surrounding its cashless payments processors, including Cash App (a P2P payments app that is gaining significant traction) and Square Capital (a “bank” of sorts that allows small businesses to tap into the capital markets). These adjacent growth businesses will only add more firepower to Square’s already robust profit growth trajectory.
As Square’s profits march higher in the 2020s, so will SQ stock.
Amazon (NASDAQ:AMZN) became the face of retail in the 2010s by making the shopping process digital and on-demand. In a similar fashion, Chegg will become the face of education in the 2020s by making the learning process digital and on-demand.
Chegg has created a connected learning platform which features things like tutoring, homework solutions, test prep services, so on and so forth. This platform is very popular among students for two reasons. First, it’s digital, and can be accessed from their phones, computers, or tablets. Second, it’s on-demand, and can be accessed whenever they want to access it.
Because of this, it seems inevitable that Chegg will become a huge part of the educational process over the next several years. Today, the platform only has about 4 million subscribers. There are 36 million high school and college students in the U.S. alone.
This delta between where the company is today (4 million subs) and where it could be in a decade (36 million subs) represents a huge opportunity for Chegg. If the company correctly capitalizes on that opportunity, then CHGG stock will be a big winner over the next few years.
Luke Lango is a Markets Analyst for InvestorPlace. He has been professionally analyzing stocks for several years, previously working at various hedge funds and currently running his own investment fund in San Diego. A Caltech graduate, Luke has consistently been recognized as one of the world’s top stock pickers by various other analysts and platforms, and has developed a reputation for leveraging his technology background to identify growth stocks that deliver outstanding returns. Luke is also the founder of Fantastic, a social discovery company backed by an LA-based internet venture firm. As of this writing, Luke Lango was long TTD, PINS, BYND, FB, SQ, and CHGG.