4 Communication Services Stocks to Gain From Rise in Coronavirus
The United States is witnessing a relentless rise in COVID-19 cases. Per the latest data from the Johns Hopkins University, coronavirus cases across the country have crossed the 14.5 million mark. In order to curb the surging cases, in places such as California, authorities have introduced new stay-at-home orders, as quoted in a Reuters article. The article further mentioned that the New York governor has also warned of banning indoor restaurant dining in New York City as cases mount. Such a situation bodes well for the communication services sector as people will continue to stay and work from home, making them reliant on technologies like wireless communication and broadband connection for their day-to-day activities.
Even though there have been several positive developments with regards to the COVID-19 vaccine recently, the emergency approval and subsequent distribution of the vaccine will still take time. Lockdowns for the better part of the year has shifted the ways in which people go about their daily lives with working from home gaining precedence. Schools also resorted to online classes in order to ensure the safety of students. Meanwhile, with social distancing in effect, people also had to restrict gathering with friends and family, again making them dependent on technology for communication. Moreover, continued restrictions have also shifted the forms of entertainment. With movie theaters remaining shut for the better part of the year, people also resorted to in-home consumption of movies and television shows. Reflective of this trend, the Communication Services Select Sector SPDR (XLC) has gained 25.7% year to date.
With the vaccine expected to be rolled out sometime in the near future, the economy will look to fully open up and resume all activities. Nonetheless, communication services will remain in focus as the pandemic has made changes that are poised to continue in the coming days. Per a survey by Enterprise Technology Research, the percentage of people around the world permanently working from home is expected to double next year, as mentioned in a Reuters article. The article stated that the main reason behind this is an increase in productivity since the beginning of remote working.
4 Top Gainers
Surging COVID-19 cases across the United States is forcing people to continue working from home, thereby increasing their reliance on communication technologies. Moreover, the dependency is set to continue in the future as the trend of working remotely continues to evolve along with in-home consumption of content. This makes it a good time to invest in communication services stocks which stand to benefit from this trend going ahead. We have selected four such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fox Corporation FOXA operates as a news, sports, and entertainment company in the United States. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 14.5% over the past 60 days. The company’s expected earnings growth rate for next year is 15.8%.
United States Cellular Corporation USM provides wireless telecommunications services in the United States. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 12.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 41.7%.
Nexstar Media Group, Inc. NXST operates as a television broadcasting and digital media company in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 12.2% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
Cambium Networks Corporation CMBM, through its subsidiaries, provides wireless broadband networking infrastructure products and solutions for network operators in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 47.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 66%.
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