The ‘Stay at Home’ Stocks 🏠

by 28 Feb, 2020

The ‘Stay at Home’ Stocks

You’re a different consumer when you’re bunged up and bed-ridden by the flu. Sell-off aside, hedge funds are readapting to a world of quarantined individuals. Behold, the ‘stay at home’ stocks!

MKM Partners says it’s tried to “identify products and services that would benefit from mass hibernation. What would people do if stuck inside all day?” This is what’s known as thematic investing, putting a current event front and centre because you believe it’s the strongest driver of stock prices.

Investors can outperform the market not only on the way up but on the way down. Markets currently see MKM losing less money than everybody else with its unique approach, and a couple of its picks are even going up. Peloton, for example, specialises in at-home workout machines. That stock is up 14% this week. Netflix is up almost 2% as of Thursday, and video-conferencing app Zoom is also living up to its name, 9% to the good.

MKM’s heavily diversified portfolio looks something like this;

Company

Industry

Week Performance

S&P 500 (benchmark)

 

-11.50%

Activision Blizzard

Gaming

-8.13%

Netflix

Streaming

-3.85%

Tencent

Media

-2.84%

Zynga

Gaming

-4.74%

Facebook

Social Networking

-11.29%

Match

Online Dating

-12.17%

Yelp

Online Yellow Pages

-7.62%

Zillow

Real Estate

-13.92%

Sirius XM

Radio

-11.64%

Sonos

Speaker Systems

-12.91%

Amazon

E-commerce

-12.25%

Blue Apron

Meal-kit Delivery

-8.65%

Alibaba

Chinese E-commerce

-5.62%

eBay

E-commerce

-5.61%

JD.com

Chinese E-commerce

-7.41%

Peloton

Home Workouts

14%

Campbell Soup

Convenience Foods

-4.79%

Clorox

Consumer Products (Wet Wipes)

2.77%

Okta

Professional Training

-9.64%

Citrix Systems

Technology

-13.02%

Atlassian

Tracking Technology

-0.64%

Slack

Online Workspace

-6.05%

Zoom

Videoconference App

8.80%

If you’re thinking of copycatting, build on MKM’s work first. These companies may continue to rake in demand, but would Amazon, Campbell Soup, and JD.com be able to meet that demand as global supply chains seize up? 

If we enter a recession, is your Netflix subscription a “must-have?” If it becomes tougher to find funding, will that hamper Zillow? With some second-level thinking and a process of elimination, the Invstr community can pick up a few hundred basis points of extra alpha. Good luck. Don’t look down!

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