“The market likes Netflix under the assumption that hibernation comes at a premium,” said Bill Smead, chief investment officer of Smead Capital Management, in a report.
It makes sense that nervous Americans would take more precautions until coronavirus fears ebb. This “nesting” phenomenon may benefit other companies that can cater to the wishes of home-bound consumers.
A portfolio of ‘stay at home’ stocks
But several other stocks could be safe havens if consumers become more skittish and workers have to work at home or or can’t take business trips. Investment firm MKM Partners created a “Stay at Home Index” to highlight some of these companies.
“We tried to identify what products/services/companies would potentially benefit in a world of quarantined individuals. What would people do if stuck inside all day?” said JC O’Hara, chief market technician at MKM Partners, in the report. “Rather than attempting to forecast how much lower these stocks may go, we decided to explore which stocks may hold up better.”
There’s another stock that wasn’t in O’Hara’s report that also has gotten a big boost lately on expectations of stronger demand in the wake of the outbreak: virtual healthcare company Teladoc, which lets patients video chat with doctors.
“Telemedicine and online tutoring are just two examples of the benefits the internet can provide. Other internet companies with exposure to food delivery, e-commerce, and streaming services could see an uptick in users as coronavirus fears keep consumers inside,” said UBS Global Wealth Management analysts in a report Monday.
“The stay-at-home nature of the companies offer some shelter relative to the broader market,” the UBS analysts said.