In the immediate aftermath of the novel coronavirus’ first assault, most investors scrambled for cover, resulting in sharp, extreme volatility. Sentiment bounced back quickly, though, in part due to strong government leadership. But with political divisiveness now the order of the day along with a rise in coronavirus cases, the case for hot stocks to buy appears in danger.
While I’m not going to dismiss the risks associated with investing at this juncture, many publicly traded companies fundamentally offer compelling exposure. Yes, it’s true that the pandemic has busted many business models, such as buffet-style restaurants. At the same time, it has also opened opportunities for suddenly relevant entities, attracting attention as potential hot stocks to buy.
Beyond the obvious health concern, arguably the biggest source of anxiety for most Americans is the workplace. Particularly, what will it look like in the new normal and more elementally, will it even exist? For now, many white-collar workers are fortunate enough to operate remotely. But I’ve become cynical in that companies may use the pandemic as cover to outsource these jobs.
However, Paul H. Pincus, partner at Ortoli Rosenstadt LLP and head of the firm’s employment law practice, wrote to me in an email:
“Federal and state laws generally do not prevent private employers from outsourcing U.S.-based jobs to other countries, although doing so may raise legal issues regarding data protection and privacy, export controls, and intellectual property rights. Also, outsourcing of specific jobs may be impacted by state or federal regulation of certain industries such as healthcare, finance, and insurance.”
Additionally, Pincus noted that it was “too early” to know if the present remote work phenomenon will lead to outsourcing. Given the complexities of this issue, hot stocks to buy related to the work-from-home sector may enjoy continued relevance. As well, these other companies may prosper in our new normal.
- E*Trade Financial (NASDAQ:ETFC)
- Upwork (NASDAQ:UPWK)
- Intuit (NASDAQ:INTU)
- Clorox (NYSE:CLX)
- Tesla (NASDAQ:TSLA)
- K12 Inc. (NYSE:LRN)
- Universal Technical Institute (NYSE:UTI)
- Chegg (NYSE:CHGG)
- Sturm Ruger (NYSE:RGR)
- Arlo Technologies (NYSE:ARLO)
For this gallery, I’m going to mix in some “classics” as well as other names that I haven’t much covered. This way, you’ll have several choices for possible hot stocks to buy for our new normal and whatever lies beyond.
E*Trade Financial (ETFC)
Starting my list with E*Trade may seem like an out-of-left-field idea. After all, we’re talking about hot stocks to buy — where you buy them doesn’t really matter. In addition, we’ve been hearing talk for years about how millennials don’t invest in the markets. Straight off the bat, this dynamic doesn’t seem helpful to ETFC stock.
Frankly, that’s a valid point. However, that was an argument in the old normal. We’re in the new normal now and the rules have changed. Thanks to the development of numerous online educational resources, I will argue that in some respects, the modern young investor is much more sophisticated than they were even 10 years prior.
I believe this will benefit ETFC stock in that such investors don’t want to miss out on a grand opportunity. They watched firsthand how the devastating Great Recession turned out to be a once-in-a-blue-moon moment to capitalize on great companies offered at a discount.
That’s why I believe E*Trade has recovered well from its March doldrums and why it belongs on your list of hot stocks to buy.
When it comes to pursuing a career in the new normal, the obvious name among hot stocks to buy invariably comes up: Zoom Video Communications (NASDAQ:ZM). While Zoom and the teleconferencing industry is no doubt benefiting from this crisis, I believe the nature of corporate America will shift. If so, you’ll want to take a long look at Upwork.
Considered a social media network for freelancers, Upwork connects businesses seeking assistance with specific projects with specialized independent contractors. Client companies receive bids from prospective freelancers (or “gig” workers) and they can make choices based on several criteria, including hourly rate, experience and certifications. It’s the new way to job hunt, which makes UPWK stock especially intriguing.
Also, I expect a sizable exodus from traditional employment structures to the gig economy. For one thing, many of those who are now working remotely are getting a taste of the gig life. According to the New York Times, many don’t want to go back to the office.
Further, you must expect that hard-hit companies will collectively lay off millions. In that case, Upwork can help turn those frowns upside down. And that’s a win-win for UPWK stock.
It’s confession time: tax software specialist Intuit is undeniably boring. So why am I mentioning it on this list of hot stocks to buy? Well, if you follow the logic behind the case for Upwork above — and more importantly, if you believe in it — then INTU stock is a no-brainer.
Like millions of you, I find tax season to be an arduous process. Just the thought of taxes makes me break out in a cold sweat. It’s not the paying money to Uncle Sam that’s the difficult part. Rather, the paperwork is just mountainous. And the more complex your tax situation, the more awful every April 15 becomes.
As a run of the mill W2 employee and assuming you take the standard deduction, President Trump’s tax law changes have been good for you, at least from an administrative perspective. But for freelancers who must deduct expenses from profits, it’s another ballgame entirely.
Potentially millions of people will find this out the hard way over the next few years. While a difficulty for those suffering from the transition, it’s a net positive for INTU stock.
Over the past few weeks, the Trump administration has gone full blast on promoting the necessity of reopening the economy. Undoubtedly, this is a crucial matter. However, more Americans are worried about the Covid-19 pandemic than they are about the economy. It’s hard to argue with the logic — nobody cares about money when they’re sick and dying.
This is a great time to bring up Clorox. As you know (probably from firsthand experience), the company’s disinfectant products helped make CLX one of the hot stocks to buy during this crisis. However, shares got a little bit flat between the second half of May to early June. At the time, it seemed we got a handle on the coronavirus.
Of course, we all know that this was a case of declaring “mission accomplished” before the job was truly done. Hmm … where have I heard that one before? But with Covid-19 cases spiking to record levels in several states, the bullishness for CLX stock has returned.
And I believe that the memory of this pandemic will stick with us for a long time. Therefore, don’t be surprised if CLX stock has a longer upside pathway than you initially anticipated.
As a play on pure hot stocks to buy, Tesla is an obvious, perhaps tired idea. As the dominant force behind electric vehicles — and all other car manufacturers, depending on Wall Street’s mood — TSLA stock has been a phenomenon. Yes, this is an overused word, but it applies perfectly for Tesla.
However, prospective investors may not appreciate that TSLA stock is also a direct play on our new normal. On an individual basis, electric vehicles (all other things being equal) are easier to maintain. Operating purely on an electric battery, it conspicuously doesn’t need an oil change — the maintenance bane for many “traditional” drivers.
Back in our old normal, I didn’t think too much about this maintenance advantage. However, when the pandemic struck and I found myself simultaneously needing an oil change, yeah … you bet I got a rude awakening in favor of EVs. Presumably, others got “woke” to that reality, which may continue to drive TSLA stock on a longer-term basis.
Another point is the oil price war. While cheap gasoline prices theoretically hurt EVs, it also demonstrates that our national fossil-fuel-based energy independence is actually still dependent on geopolitical factors. Moving to electric may help mitigate this vulnerability.
K12 Inc. (LRN)
As a 2018 USA Today report demonstrated, school violence has been on the rise. But it’s not just high-profile incidents that worry parents. Though controversial (for reasons I don’t understand), I believe that schools removing faith-based principles and practices have contributed to moral decay and apathy in our young.
It’s enough to make you as a parent want to homeschool your children. Of course, that’s a tricky process. Fortunately, K12 Inc. has an entire online infrastructure geared toward comprehensive home learning.
I mention this because LRN stock was relevant before the pandemic. But in our new normal, contactless services come at a premium. You already see how companies like Amazon (NASDAQ:AMZN) and Domino’s Pizza (NYSE:DPZ) have skyrocketed this year. I would hope that your children are more important than trinkets and pizza.
Sure enough, LRN stock has launched into low-earth orbit since late June. Thus, I don’t recommend buying shares right now. Like anything, I expect gravity to take over.
However, a possibly imminent correction could be a temporary one. With a viable vaccine still likely a year away at the earliest, K12 still has time as one of the hot stocks to buy.
Universal Technical Institute (UTI)
When Ivanka Trump helped launch the “Find Something New” jobs initiative, both the mainstream media and political commentators panned it as being completely tone deaf. I can understand as I’m playing a small violin for the incredible privileged daughter of the President. But look beyond the criticism and you’ll find some nuggets of wisdom.
Now, the specific nugget I’m thinking about is Universal Technical Institute and UTI stock. If you look at the initiative’s website, you’ll note that some of the most in-demand jobs are hands on, such as electricians, elevator installers/repairers and wind turbine technicians. By no means is this an exhaustive list. But the theme here is that blue collar jobs matter.
In fact, blue collar workers have never mattered more. According to the U.K.-based Independent, almost three-quarters of millennials admit they don’t know how to change a flat tire. I’m pretty sure this is the same for the U.S. I have a hard time believing that the British – or most countries’ citizens – are smarter or more useful than us.
Post-pandemic, you’ll likely see high demand from millennials who don’t know how to do anything. That should be a big incentive for UTI stock.
If I may be painfully honest, our universities are oversaturated with students that don’t belong there. The academic industrial complex has turned into a racket that neither serves the long-term interests of students nor the universities. Hence, I believe that the technical trade could experience a blue-collar renaissance, making publicly traded companies in that space hot stocks to buy.
Nevertheless, this transition won’t happen overnight. And that leaves Chegg in a viable position to enjoy significant upside. True, CHGG stock has already become one of the hottest commodities in the markets. Yet the startling number of coronavirus cases suggests that several academic institutions will conduct lectures exclusively online. If so, Chegg will become an even more valuable tool for students than it already is.
Primarily, Chegg provides lower-cost access for textbooks, which are always student budget killers. If you look at the racket that the academic industry is pulling on our young — nearly $200,000 average total cost for a private nonprofit four-year institution, as an example — every dollar saved counts.
Also, CHGG stock benefits from the underlying company’s wealth of online tutoring services. If the coronavirus stays with us longer than expected, this will easily count as one of the hot stocks to buy.
Sturm Ruger (RGR)
If you look at the latest polls, the chances for Donald Trump winning a second term are about as good as me winning a first term. However, if he were to win, I believe his best chance is to play up fears of the majority white electorate.
As you know, protesters have taken to the streets to call for social justice and equity. While noble, some folks in that camp have called for defunding the police or diverting police resources to other social programs. I’m almost 100% sure that this concept scares the majority population of this country.
Thus, it’s no surprise that Sturm Ruger has turned into one of the most popular hot stocks to buy. Prior to the pandemic, RGR stock had to contend with the firearms industry’s ever-present controversy. But now, that controversy has faded, as evidenced by the record-breaking surge in gun sales.
Initially, Asian Americans feared a racist backlash because of the coronavirus — a situation that President Trump has only exacerbated with his deflection onto the Chinese culprit at every turn. Currently, I believe white buyers are hoarding guns and ammo in anticipation of a radical social change.
This may be the nastiest and most cynical of hot stocks to buy. But as long as society is fractured like this, RGR stock will enjoy substantial upside.
Arlo Technologies (ARLO)
It’s safe to say that wireless security camera specialist Arlo Technologies has been a disappointment. Starting life as a publicly traded entity in late summer of 2018, at its peak, ARLO stock was trading hands at over $20. But since September 2018, shares have been on a merciless decline.
At the time of writing, ARLO stock is down 26% year-to-date. So, if you’re thinking about buying shares, think very carefully.
For the risk-tolerant speculator, Arlo has an outside shot of being considered one of the hot stocks to buy in the second half of this year. As I mentioned with Ruger above, regular people are scared about their safety. However, I think it’s a stretch to assume that most Americans will become gun owners. According to the Washington Post, there are more guns than people in the U.S., indicating firearms enthusiasts have well more than one gun.
Rather than go through that hassle and all the potential headaches that come with gun ownership, most people will elect security cameras. They’re convenient, non-offensive and act as a deterrent. In other words, they’re perfect for the new normal.
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.