In this article, we will take a look at the 10 best work-from-home (WFH) stocks to buy now. You can skip our comprehensive analysis of these companies and go directly to the 5 Best Work-From-Home (WFH) Stocks to Buy Now.
Remote working is no longer a privilege held by a small, highly educated minority in the world economy, but has spread over the past few months to become the new normal for most businesses. The lockdowns, quarantines, and self-isolations due to the COVID-19 pandemic resulted in a historic shift in the job market and working from home now seems to extend beyond the coronavirus crisis. According to management consultancy McKinsey, hybrid work models have led to a structural shift in where work takes place for many people.
McKinsey research indicates that more than 20 percent of the workforce could work remotely three to five days a week and be as productive as they would be from an office. The research also underlines that if remote working took off, three to four times as many people working from home than before the pandemic would result in a chain reaction affecting other sectors of the economy like urban markets, transportation, and consumer spending. Illustrating this shift is enterprise spending on cloud services, which has climbed to $129 billion in the past ten years.
There are several companies that rode the work-from-home wave through 2020 and look set for further growth even as businesses reopen. Zoom Video Communications, Inc. (NASDAQ: ZM), a communications technology firm, saw share price climb to 817% year-to-date highs at the height of the virus crisis in October before calming towards the end of the year, though it was still trading a 425% year-to-date surge then. Zoom Video Communications, Inc. (NASDAQ: ZM) has also seen annual revenue jump to over $2.6 billion in 2020 from $600 million in 2019.
Another company that benefited from the increased online business activity was CrowdStrike Holdings, Inc. (NASDAQ: CRWD), a cybersecurity firm. CrowdStrike Holdings, Inc. (NASDAQ: CRWD) almost doubled annual revenue in 2020 compared to 2019, and recently signed a deal with search giant Google to extend endpoint protection plans on cloud services offered by Google. CrowdStrike Holdings, Inc. (NASDAQ: CRWD) has so far only made small inroads in the cybersecurity market valued at over $35 billion and has lots of room to run. CRWD is one of the best work-from-home (WFH) stocks to buy now.
Slack Technologies, Inc. (NYSE: WORK) is another worthy winner of the work-from-home market. The software provided by the firm integrates teams and processes for big businesses and makes communications easier. Slack Technologies, Inc. (NYSE: WORK) stock did not witness explosive growth like some peers in the tech sector during the pandemic but registered steady gains, posting a close to 50% increase in annual revenue and outperforming the wider market. Slack Technologies, Inc. (NYSE: WORK) is one of the pioneers of digital business communications. WORK is one of the best work-from-home (WFH) stocks to buy now.
It certainly seems like the work-from-culture is here to stay, but it is still very tricky to predict market direction at any given point in time as disruptors routinely stoke volatility in several sectors, including the finance world. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 10 best work-from-home (WFH) stocks to buy now.
Best Work-From-Home Stocks to Buy
10. Atlassian Corporation Plc (NASDAQ: TEAM)
Number of Hedge Fund Holders: 69
Atlassian Corporation Plc (NASDAQ: TEAM) is an Australia-based software company founded in 2002. It is placed tenth on our list of 10 best work-from-home (WFH) stocks to buy now. Some of the services the company offers include project tracking and service management. The products it markets include JIRA, Confluence, and Trello. Atlassian stock has returned more than 22% to investors in the past year. The enterprise software that the firm sells enables businesses to build and manage large teams and projects.
In earnings results for the third fiscal quarter, Atlassian Corporation Plc (NASDAQ: TEAM) posted a revenue of $568 million, up more than 38% compared to the same period last year and beating market estimates by $36 million. The earnings per share were $0.48 during the period.
At the end of the fourth quarter of 2020, 69 hedge funds in the database of Insider Monkey held stakes worth $4.9 billion in Atlassian Corporation Plc (NASDAQ: TEAM), up from 48 the preceding quarter worth $3.2 billion.
9. Chegg, Inc. (NYSE: CHGG)
Number of Hedge Fund Holders: 33
Chegg, Inc. (NYSE: CHGG) is a California-based education technology firm. It was founded in 2005 and is ranked ninth on our list of 10 best work-from-home (WFH) stocks to buy now. Some of the services the company offers include online tutoring and textbook rentals. Chegg stock has offered 34% in returns to investors over the past twelve months. The products sold by the firm include Chegg Services, Chegg Study, Chegg Writing, and Chegg Prep, among others. Chegg, Inc. (NYSE: CHGG) also runs a platform offering professional certifications.
On May 3, Chegg, Inc. (NYSE: CHGG) posted earnings for the first quarter of 2021, reporting a revenue of close to $200 million, up more than 50% compared to the same period last year and beating market projections by more than $13 million. The firm also reported a 64% year-on-year increase in subscriptions to Chegg Services.
Out of the hedge funds being tracked by Insider Monkey, Hong Kong-based investment firm Sylebra Capital Management is a leading shareholder in the firm with 2.7 million shares worth more than $248 million.
“We started new investment campaigns in Chegg. Chegg, Inc. (NYSE: CHGG) is a digital education platform which provides online math, writing and other learning services with a low-cost monthly subscription. The company is well-positioned to help students who may not have access to traditional assistance resources. We also suspect the pandemic is accelerating many longer-term changes in higher education—more remote learning, more focus on student outcomes, pressure on tuition—and we believe Chegg will be a beneficiary. Given this tailwind, the opportunity to add new customers in a lightly penetrated US market (~25%-30% of higher-ed enrollments today), the company’s expansion into international markets and the addition of new services such as online coding certifications, we believe the profit cycle ahead is compelling.”
8. Teladoc Health, Inc. (NYSE: TDOC)
Number of Hedge Fund Holders: 50
Teladoc Health, Inc. (NYSE: TDOC) is a New York-based telemedicine and healthcare company founded in 2002. It is placed eighth on our list of 10 best work-from-home (WFH) stocks to buy now. Some of the services marketed by the firm include telehealth, medical opinions, and artificial intelligence and analytics. The brands owned by the company include Livongo, Advance Medical, Best Doctors, BetterHelp, and HealthiestYou. The firm operates in several countries primarily on a business-to-business basis.
Like Zoom Video Communications, Inc. (NASDAQ: ZM, Slack Technologies, Inc. (NYSE: WORK) and CrowdStrike Holdings, Inc. (NASDAQ: CRWD), TDOC is thriving because of the pandemic.
On May 3, Teladoc Health, Inc. (NYSE: TDOC) stock was given an Outperform rating with a price target of $264 by investment bank Credit Suisse, indicating a more than 50% upside potential for the telehealth company.
At the end of the fourth quarter of 2020, 50 hedge funds in the database of Insider Monkey held stakes worth $2.6 billion in the firm, up from 47 in the preceding quarter worth $997 million.
“Teladoc Health, Inc. (NYSE: TDOC) offers remote physician access to patients at home. After experiencing incredible levels of growth throughout the early stages of the pandemic as its unique value proposition rose to the forefront of the healthcare industry, the firm’s shares cooled off a bit as optimistic vaccine data slightly curtailed investor expectations for the firm’s future growth potential. We sold the stock.”
7. RingCentral, Inc. (NYSE: RNG)
Number of Hedge Fund Holders: 63
RingCentral, Inc. (NYSE: RNG) is a California-based company that provides cloud computing services. It is ranked seventh on our list of 10 best work-from-home (WFH) stocks to buy now. The company markets high-definition voice, video, text messaging, collaboration, conferencing, and online meeting services through the RingCentral Office product. It also has other products like RingCentral Engage Digital and RingCentral Live Reports, among others. RingCentral, Inc. (NYSE: RNG) serves many industries, including financial services.
In earnings results for the first quarter of 2021 posted on May 4, RingCentral, Inc. (NYSE: RNG) reported a revenue of more than $352 million, beating market forecasts by more than $12 million. It also posted a 34% year-on-year increase in subscriptions revenue.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC is a leading shareholder in the firm with 3.3 million shares worth more than $1.2 billion.
In its Q1 2021 commentary, Baron Asset Fund, an investment management firm, highlighted a few stocks and RingCentral, Inc. (NYSE: RNG) was one of them.
“RingCentral, Inc. provides global cloud communications and collaboration solutions across multiple channels, including voice, video, and messaging. Despite continued solid execution with revenue acceleration, RingCentral’s stock corrected during the quarter as the market rotated out of many fastgrowing stocks. With its distribution advantage and the pandemic crystalizing the need for a communications platform that is agile, scalable, and global, we believe that RingCentral remains early in penetrating its addressable market. We believe this should allow sustainable growth for many years to come.”
6. Twilio Inc. (NYSE: TWLO)
Number of Hedge Fund Holders: 94
Twilio Inc. (NYSE: TWLO) is a California-based company that provides cloud-based communications services. It was founded in 2008 and is ranked sixth on our list of 10 best work-from-home (WFH) stocks to buy now. The products marketed by the firm allows businesses to make and receive phone calls and text messages through a software that manages all the communications. Twilio Inc. (NYSE: TWLO) stock has returned more than 54% to investors over the course of the past twelve months.
On May 5, Twilio Inc. (NYSE: TWLO) reported earnings for the first three months of 2021, posting more than $589 million in revenue and $0.05 in earnings per share. The revenue figure beat market predictions by more than $56 million and was up 61% year-on-year.
At the end of the fourth quarter of 2020, 94 hedge funds in the database of Insider Monkey held stakes worth $5 billion in the firm, up from 74 in the previous quarter worth $3.4 billion.
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Disclosure: None. 10 Best Work-From-Home (WFH) Stocks to Buy Now is originally published on Insider Monkey.