Top stocks in Covid times
2020 has become a direct synonym for the coronavirus disaster, which notably disrupted the usual way of life. Markets crashed, people were left unemployed and simply every major event was canceled. Even though we have some positive news regarding the vaccine, hardly we will be able to return to the previous life, until next winter.
The coronavirus pandemic has also caused a major economic crisis in many parts of the world. The quarantine measures, the closure of many companies, the actual shutdown of entire industries are all seriously affecting the global economy.
But there are also companies – including those whose shares are traded on the stock exchange – that is growing in these difficult times and showed great results. Often it is logical, and sometimes – quite unexpectedly.
In this article, we will talk about stocks that showed serious growth in the current difficult conditions.
Stock trading growing amid the pandemic
While we move to talk about stocks, we should mention that during these hard times online stock trading surged significantly. People found it way convenient to trade remotely. It is way easier to monitor your positions from home, open new trades and in simple words pay attention to everything thoroughly. In fact, the coronavirus pandemic showed a lot of employees that a physical presence is not required to be efficient at your job.
Microsoft, Intel, Dell: growth amid demand for remote appliances
Worldwide, tens of millions of office workers have been forced to move to remote work. This caused a natural increase in demand for computers and components such as monitors, keyboards, mice. Some companies pay employees for equipment, someone allows them to take it from offices, but a significant number of people have to take care of their work tools on their own.
This situation was in the hands of vendors. Before that, sales for many of them were falling. Microsoft, Intel, and Dell are the best examples. The shares of all three companies were relatively low in mid-March and rose significantly a month later.
This tendency is still growing and is likely to continue for a long time.
If we take a look at the statistics, in the first half of March alone, sales of monitors in the U.S. alone grew by 80,000 units. Sales of laptops, mice, and keyboards increased by 10%. As a result, in addition to Intel and Microsoft, whose shares rose, shares of Dell and IBM were also able to succeed: in the last year, both companies on the stock exchange were not doing well.
Zoom Video Communications: Growth due to explosive demand for video conferencing
The service was able to increase the number of users from 10 million to 200 million in just three months. As a result, the company’s share price also increased from $113.11 in early March to $149.5 at the end of April.
This growth was accompanied by a funny situation. Investors confused the shares of the service with the shares of the Chinese manufacturer of telecommunications equipment Zoom Technologies. As a result, the securities of the wrong company rose by 557%. What is more interesting it also happened a few years ago – then the shares of “wrong” Zoom rose by 47,000%.
Netflix: a massive influx of online streaming users
Another company to whom the world quarantine was profitable was a streaming giant Netflix. Being locked up, people are much more active watching TV series and movies online and as a result, Netflix’s user base is growing at a rapid pace. The company recently reported that its audience grew by 15.8 million users in the first three months of 2020. At the same time, recently analysts from Wall Street predicted growth of 7 million.
Now the company’s share price exceeds $480 apiece, by the capitalization of Netflix overtook Disney.
The demand for online streaming services is so great that in March the company had to reduce the quality of video in Europe due to excessive load on the infrastructure.
The Canadian video game developer also feels great during the quarantine. In addition to watching movies, people kill the time with video games – even those who previously could not be called an active gamer. As a result, the value of EA shares increased significantly.
Campbell Soup and Clorox: people stock up on canned food and napkins
The first wave of quarantine bans provoked something like consumer panic around the world. People were afraid of the shortage of goods and therefore began to actively buy up what is always popular in such situations. As a result, shares of canned goods manufacturer Campbell Soup showed the most impressive growth in recent decades.
Similarly, the share price of antibacterial wiper manufacturer Clorox has reached a historic high.
So, what findings can we elicit from these stocks? First of all, the appearance of Covid-19 has notably impacted the digital world. The concept of remote work has changed. When people were forced to stay home to slow down the spread of the virus, they found various activities to entertain themselves. Of course, the first thing that comes to mind is gaming and movies – that is why Netflix and Electronic Arts grow so massively.
It is also essential to point out that the situation is unlikely to change for a long time because the pandemic is not over yet. Zoom is still widely used in education as well as holding conferences.