[Editor’s Note: “9 Stocks to Buy as People Are Still Stuck at Home” was originally published in March 2020. It is regularly updated to include the most relevant information.]
With the rate of the novel coronavirus having slowed down dramatically, most states are now gradually relaxing their stay-at-home restrictions. However, the new concern now is that many Americans are not taking social distancing guidelines and other recommended precautions seriously. Therefore, we could see another wave of infections, making stocks to buy which jumped on the quarantines still relevant.
Over the Memorial Day weekend, crowds packed beaches and other public events in Florida, Maryland, Georgia, Virginia and Indiana. Many of these folks refused to wear masks and worse yet, were situated elbow-to-elbow with thousands of others. As some people explained, they were tired of sitting at home, especially as the weather got warmer.
Certainly, I can understand their frustration. And on the surface, this dynamic doesn’t support the thesis for stay-at-home stocks. While event organizers recommended safety protocols, they didn’t enforce them. As well, police officers found themselves overwhelmed. When you have crowds swarming a particular area, there’s only so much they can do.
Nevertheless, I wouldn’t give up on so-called quarantine stocks to buy. Though the U.S. infection rate decline is encouraging, infectious disease experts warn that Covid-19 cases are still rising nominally in much of the U.S. You got to figure that these jam-packed events aren’t helpful, as Mardi Gras celebrations may have demonstrated.
Also, don’t forget that economic powerhouse states like California currently have only regional or heavily restricted reopenings. For residents in these states, not much has changed since the lockdowns first started.
Here are nine stocks to buy as many are still waiting to finally go outside.
Streaming giant Netflix (NASDAQ:NFLX) seems like a ridiculously logical play on the coronavirus outbreak. And by ridiculous, I just mean that it seems too good to be true. With schools and businesses shutting down, many have nothing left but time on their hands. What better way to spend it then binge-watching your favorite shows? That’s the intuitive narrative behind NFLX stock.
The thing is, everybody knows this. And when all the gamblers bet on the same horse, the reward is usually minimal. But that’s not the case at all with Netflix stock. Instead, Netflix shares are up double digits for the year, despite some turbulent waters to start the month of March.
Of course, there’s something to be said about losing your hostage audience once the coronavirus fades. But so far, that hasn’t impacted NFLX stock, which continues to dominate the markets. Primarily, Netflix added a whopping 16 million subscribers in the first quarter.
I think there’s a good chance that the company keeps much of these gains. Compared to traditional TV services, Netflix is cheap and flexible, attributes that will drive shares higher over the long run. Therefore, this remains a top name among stocks to buy.
Trade Desk (TTD)
For those in the know, Trade Desk (NASDAQ:TTD) is an incredibly compelling name that will advantage the transition from linear television to connected TV. With the cord-cutting phenomenon accelerating, advertisers are scrambling to effectively reach their audience under this paradigm shift. Trade Desk specializes in maximizing those ad dollars through a combination of market research and data science.
Unsurprisingly, TTD stock has ranked highly among most lists of stocks to buy. Furthermore, the underlying company blitzkrieged their latest earnings report, exceeding targets for both profitability and revenue. As well, management promised to make strong investments in high-growth areas, including global expansion.
Sounds great, except for this coronavirus deal. However, in an email that I received from Trade Desk’s team, they reported during the initial phase of the pandemic that advertisers were still advertising. When you consider the remarkably strong performance of TTD stock in April and a great start to May, this sentiment appears to still be valid.
Plus, the cord-cutting trend predates the coronavirus pandemic by many years. Therefore, TTD is one of the best long-term stocks to buy in any circumstance.
Streaming has many advantages, among them the ability to watch content when you want to. Further, streaming platforms provide flexibility, where you only pay for the content you actually watch. And these are the core reasons why Roku (NASDAQ:ROKU) has consistently topped lists of stocks to buy in the over-the-top market. With coronavirus, ROKU stock may enjoy a surprising catalyst.
As with Netflix, many folks will of course tune into Roku’s intuitive platform. When you’re hunkering down, mimicking your favorite characters from “The Walking Dead,” you quickly realize that self-quarantining is boredom personified. Nothing helps whittle away the hours more than streaming your favorite programs.
But those who are on traditional TV services will quickly realize that they’re limited in their options. In contrast, platforms like Roku facilitate on-demand viewing. This coronavirus-led downtime may help people realize what they’re missing out. Theoretically, this augurs well for ROKU stock.
Though shares have been volatile recently, I’d focus on the long-term picture. As everyone comes out of the quarantines, they’ll recognize the cost savings associated with cutting the cord. That will be a huge lift for ROKU.
As a blue-chip stalwart, Disney (NYSE:DIS) you’d expect DIS stock to benefit from some mitigation from the volatility. Fundamentally, though, Disney has hit every branch of the ugly tree as it relates to its core business. Not unexpectedly, then, its present recovery effort looks a bit uninspiring, if I’m being honest.
Given the technical posture of DIS stock, I’d be surprised if it didn’t drop further. So, why am I including it in this list of stocks to buy? Primarily, investors justified the premium in Disney shares well before the coronavirus struck. Stated differently, the coronavirus will someday fade, meaning that any dips over the next few months are huge discounts.
Second, DIS stock is a comprehensive investment. Yes, the shelter-in-place orders have devastated Disney’s resort and movie businesses, along with ESPN due to sports leagues shutting down. However, Disney still offers its Disney+ streaming business. Furthermore, when society fully reopens, you’d expect a surge from pent-up demand. After all, who wouldn’t want to see competitive games on TV (or in person) again?
It’s a tired statistic but I’m going to mention it anyways. Thanks to the mass proliferation of e-commerce, online revenue represents more than 11% of all retail sales. It’s one of the pivotal reasons why Amazon (NASDAQ:AMZN) is found in galleries featuring the best long-term stocks to buy. Additionally, the company is the ultimate disrupter, sticking its nose into everything from cloud computing to groceries.
As such, you might want to buy AMZN stock just so that you don’t get steamrolled. While Amazon is sucking the life out of the mom and pops, there’s no stopping this behemoth.
The company’s dominance also got me thinking: self-quarantining for many folks – particularly the younger generation – may not be a bad gig. After all, digitalization for retail focuses almost exclusively on bringing commerce into the comfort of your living room. Since Amazon shopping addicts self-quarantine anyways, AMZN stock looks to avoid the worst of the coming volatility.
Plus, I think it’s worth mentioning that Amazon stock had a tremendous run in April and May isn’t looking bad at all.
Alphabet (GOOG, GOOGL)
Two things come to mind when I think about Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) as a possible candidate for stocks to buy: SEO and advertising. Although I didn’t check, I’m sure that inquiries regarding the coronavirus have dominated Google’s search engines. I myself probably contributed to a good 10% of those searches. And that intense interest leads to advertising opportunities.
Invariably, after a user is done reading about the coronavirus, he or she is bombarded with supposed protections against the outbreak, such as a face mask. The spike in interest has allowed entrepreneurs – or should I use the term scalpers? – to raise premiums to absurd levels. You can say what you want about price gouging, but for GOOGL stock, it’s all money in the bank.
As well, people who are stuck at home won’t have much to do. This encourages more web surfing, and thus more opportunities for online advertisements. Even for a huge company like Alphabet, the increased traffic should be notable, thus driving the case for GOOG stock.
Robert Half International (RHI)
During this crisis, companies like Twitter (NYSE:TWTR), Alphabet, and Amazon offered some of their employees to work from home, even before states’ shelter-in-place orders. Now, it seems like this tactical adjustment will become permanent, at least for leading tech firms.
This is tremendous news for gig economy names like Fiverr (NYSE:FVRR). As the mainstream accepts remote work, FVRR should see long-term gains. However, shares are also overheated, which makes traditional employment agency Robert Half International (NYSE:RHI) comparatively more attractive.
Of course, RHI stock comes across as a yesteryear investment, particularly because of the paradigm shift that has impacted the working environment. However, it’s fair to note that Robert Half has adjusted its business model, accommodating remote interviews and giving its corporate clients access to a network of remote professionals.
Moreover, because of the horrific losses in the labor market, very few people are in a position to turn down opportunities. Thus, “ghosting” won’t be an issue, providing another potential lift for RHI stock.
Slack Technologies (WORK)
Due to the advent of software innovations and cloud computing, it’s easier than ever to work from home. Now, most employees would prefer telecommuting, but they often run into resistance with their bosses. Call me cynical, but I believe most employer-employee relations operate on a leery, skeptical platform. However, the coronavirus may shift this thinking toward a productive path. As well, it may also move the needle for Slack Technologies (NYSE:WORK) and WORK stock.
One of the reasons given for rejecting telecommuting is the lack of communication and accountability. Obviously, when you’re not in the office, no one knows what the heck you’re doing. But with Slack’s digital office tools, project leaders can assign tasks and responsibilities through a communication portal. Among the many benefits is that it prevents (in theory) people from asking stupid questions: whatever documents or information you need can be placed in an organized folder.
Interestingly, WORK stock is up big this year despite some recent turbulence. The outbreak may have added another catalyst to the underlying thesis.
Among the stocks to buy on this list, Uber (NYSE:UBER) is probably the riskiest for the nearer term. Although ride sharing is one of the most innovative concepts forwarded in the digitalization era, we must remember that we’re still far away from fully automated taxis. Thus, the human element still exists for UBER stock and that’s not a positive during a health crisis.
Furthermore, Uber actually requested that riders stay at home during this crisis. You want to talk about a new normal? I never thought I’d see the day that a publicly traded company would urge its clients not to use its service.
Still, a lot can go wrong with this idea. In particular, the company widened its quarterly net loss to $2.9 billion. As well, the ride-sharing outfit has laid off several thousand people. Undoubtedly, this will be a trying investment.
At the same time, Wall Street loves cost cuts. Thus, the case for UBER stock isn’t completely invalid, though you’ll want to be vigilant.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.