[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.]
Up until recently, the mood of the nation took on a decidedly positive turn. First, we enjoyed a pair of positive economic indicators in the form of the May jobs report and retail sales. Second, all states initiated their reopening measures, bringing hopes of a quicker-than-expected recovery from the novel coronavirus. Thus, “stay-at-home” stocks to buy seemingly lost their relevance.
Unfortunately, in the last few days, the narrative again shifted negatively. Hot spots have sprouted in many states, causing total cases in the U.S. to hit a daily record. In a bid to restore control of the situation, Texas halted its reopening protocol. Also, California Governor Gavin Newsom reinstated a stay-at-home order for Imperial County, the hardest-hit county of the Golden State.
What’s perplexing is that before Covid-19 cases surged, evidence indicated that the U.S. had not flattened the infection curve. Even as states began reopening, the number of cases settled at an unusually high threshold. Therefore, you don’t want to give up on so-called quarantine stocks to buy just yet.
I’m not suggesting that people should panic. Further, the Trump administration indicated that the federal government will not shut down the country, irrespective of rising cases. Still, people can choose to voluntarily quarantine to protect themselves, given that this situation is no longer fake news. So, that’s another reason to closely monitor stay-at-home stocks to buy.
Also, nationwide protests calling for social equity and justice have sparked concerns about spreading the coronavirus. With heightened emotions and a lack of social distancing, more people will be incentivized to lock themselves down.
Here are nine stocks to buy if we find ourselves going back inside, whether voluntarily or not.
Streaming giant Netflix (NASDAQ:NFLX) seemed like a ridiculously logical play on the coronavirus outbreak. And by ridiculous, I just mean that it appeared too good to be true. With schools and businesses shutting down, many had nothing left but time on their hands. What better way to spend it then binge-watching your favorite shows? That was the intuitive narrative behind NFLX stock.
Of course, there’s something to be said about losing your hostage audience once the coronavirus faded. 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.
Additionally, even with states reopening, entertainment options are limited. For instance, we may not get the box office back in near-full capacity until July. And when they do reopen, you have to imagine that they will impose strict mitigation protocols.
In contrast, streaming is cheaper, healthier, and more convenient. Therefore, NFLX 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 another blistering showing in June, it seems a safe bet that advertising remains a viable platform.
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.
Papa John’s (PZZA)
Typically, anything is better with pizza, which has driven the long-term case for Papa John’s (NASDAQ:PZZA). Long a favorite among the “corporate” branded pizza, PZZA stock took an unnecessary dive when Papa John’s founder John Schnatter used the worst racial slur you can utter in America. Worse, he apparently uttered it during a business conference call.
You can file this under the dumbest ways to nuke your career. Frankly, I wasn’t too sure if the company could recover. Usually, these types of controversies don’t end well. At the same time, it’s unfair to stigmatize the entire organization, seeing as how many good people work there. Appropriately, Papa John’s saw an opportunity in one of America’s darkest hours and delivered on their post-Schnatter image.
Quickly revamping their operations to incorporate contactless food delivery – buyers can pre-pay and pre-tip, eliminating the need for any physical exchange – Papa John’s has met the coronavirus challenge with aplomb. Not surprisingly, PZZA stock has been a top performer since the second half of March.
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, Amazon has enjoyed a once-in-a-blue-moon organic marketing opportunity to showcase its other businesses. From cloud computing to video games to streamed content, this is a company that does it all. Thus, it’s no shocker that AMZN has performed consistently well so far this year.
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.
Moreover, GOOGL stock has received a direct catalyst from the pandemic due to Alphabet’s streaming entertainment business. With its Google Play platform, consumers were easily able to download movies, TV programs, music, and books. If some folks preferred to go to physical retailers for these items, Alphabet essentially received free marketing to help convince them to make the switch.
As well, people who are still stuck at home voluntarily or otherwise 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 can afford to turn down opportunities. Indeed, the stubbornly high unemployment claims remain the thorn on the economic recovery proponent’s side. 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. Certainly, it has moved the needle for Slack Technologies (NYSE:WORK) and WORK stock.
However, that needle may have moved a bit too much. Recently, Slack released results for its fiscal first quarter. While the company beat Wall Street estimates, it had a tough comparison to Zoom Video Communications (NASDAQ:ZM), which has been utterly killing it during this crisis.
But the biggest distraction for investors was likely Slack’s billings number, which suggested a negative impact from Covid-19. Partially, this is due to concessions that the company made to financially struggling customers.
Logically, WORK stock has become a less-desirable name following the fiscal Q1 report. However, the steep 14% drop immediately after the earnings announcement will attract contrarians. After all, remote work platforms have become more relevant, not less.
Peloton Interactive (PTON)
Last year during the holiday season, Peloton Interactive (NASDAQ:PTON) entered the mainstream consciousness but not in the way that management would have liked. Running an ad featuring a man giving his attractive, physically fit wife a Peloton Bike appeared tone deaf.
Perhaps there’s no such thing as bad publicity. But PTON stock wasn’t looking too great just before starting off 2020.
However, several weeks after the “controversy” – I didn’t really think it was that big of a deal – Peloton gained positive momentum. Then, the coronavirus struck, sending PTON stock plummeting back toward earth. With fears of a massive recession, the case for pricey fitness equipment didn’t make much sense.
Later on, though, we discovered that the unemployment rate for college-educated workers was much lower than other demographics. Largely, this is due to companies shifting operations remotely. And that means a higher-paid labor force that’s relatively insulated from this crisis.
If coronavirus cases continue to surge, PTON stock is likely to move higher due to fears of infection in high-contact places like gyms and public fitness centers. Though technically overheated right now, you may want to hit the buy button on any significant discounts.
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.