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5 Stay-at-Home Stocks to Survive the Second Wave of Coronavirus

Sreoshi Bera
·5 min read

Stocks have been wavering in the past few sessions as spike in coronavirus cases indicated a second wave or resurgence in the United States. This has not only dampened investors’ sentiments but has also dealt a setback to the nascent economic recovery.

Rising new coronavirus cases have pushed investors out of sectors that have been hit hard by the outbreak. Possibilities of new rounds of lockdown have created a rush formore resilient sectors like technology. In fact, stay-at-home stocks seem to have grabbed investors’ attention as the coronavirus wrath continues.

Second Wave Clogs Reopening Plans

On Jun 21, the WHO reported the largest single-day increase in global COVID-19 cases, with more than 1,83,000 cases worldwide in a day. In fact, per Johns Hopkins University’s report, on Jun 20 and 21, more than 30,000 new coronavirus cases have been recorded in the United States. So far, there are more than 2.31 million confirmed COVID-19 cases in the United States, with the death toll climbing every day.

More than a dozen states in the South and Southwest of the United States reported a record increase in new cases, with more than 10% of the people testing positive. California, Texas and Florida continue to record the highest new cases, with more than 4,000 new cases reported on Jun 21 alone.

Stocks related to economic reopening, especially travel-related stocks, gave up gains made in the previous week. Shares of cruise operators Norwegian Cruise Line and Royal Caribbean Cruises have dropped nearly 6% on Jun 22, while the S&P 1500 airlines index dropped 1.3%.

5 Stay-at-Home Stocks to Buy

As the second wave of coronavirus cripples countries, forcing them to announce lockdown once again, stay-at-home stocks climb higher. This basket of stay-at-home stocks includes video games, Internet services and healthcare companies. In fact, the S&P 500 rose 1.9% in the five days for the week ending Jun 19, fueled by the stay-at-home cohort.

Technology stocks have been resilient during the coronavirus-led downturns earlier and helped major indexes rally higher on Jun 22. Shares of remote working and cloud-based services like Amazon, Adobe, Square rallied during the day, while Netflix, Zoom Video Communications, Inc. ZM and Peloton reached fresh all-time highs in the intraday trading.

Given the growth of stay-at-home stocks even during the coronavirus-led slump, we have shortlisted five stocks that can return well on investment.

Activision Blizzard, Inc. ATVI develops and distributes content and services on video game consoles, personal computers, and mobile devices. The company’s expected earnings growth rate for the current year is 23.1% against the Zacks Toys - Games - Hobbies industry’s projected earnings decline of 8.7%.

The Zacks Consensus Estimate for its current-year earnings has climbed 11.7% over the past 60 days. Activision Blizzard sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Zoom Video Communicationsprovides a video-first communications platform. The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Internet - Software industry’s projected earnings growth of 2.3%. The Zacks Consensus Estimate for its current-year earnings has moved up more than 100% over the past 60 days. Zoom Video flaunts a Zacks Rank #1.

Dropbox, Inc. DBX provides a collaboration platform. The company’s expected earnings growth rate for the current year is 52% against the Zacks Internet - Services industry’s projected earnings decline of 1.5%. The Zacks Consensus Estimate for its current-year earnings has moved 8.6% up over the past 60 days. Dropbox sports a Zacks Rank #1.

Livongo Health, Inc. LVGO provides an integrated suite of solutions that promotes health behavior change based on real-time data capture supported by intuitive devices and insights driven by data science. The company’s expected earnings growth rate for the current quarter is 97.8% compared with the Zacks Medical Info Systems industry’s projected earnings growth of 20.9%.

The Zacks Consensus Estimate for its current-year earnings has climbed 57.1% over the past 60 days. Livongo Health holds a Zacks Rank #2 (Buy).

Green Dot Corporation GDOT allows a consumer to transfer funds to a smartphone as well as offers disbursement services through Simply Paid platform. The company’s expected earnings growth rate for the nextyear is 33.1% compared with the Zacks Financial Transaction Services industry’s projected earnings growth of 25.9%.The Zacks Consensus Estimate for its current-year earnings has climbed 10% over the past 60 days. Green Dot carries a Zacks Rank #2.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

Click to get this free report Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report Green Dot Corporation (GDOT) : Free Stock Analysis Report Dropbox, Inc. (DBX) : Free Stock Analysis Report Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report Livongo Health, Inc. (LVGO) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research