As confirmed cases of the coronavirus top 125,000 globally and at least 1,600 in the U.S., there are near constant headlines about cancelled events, suspended sports seasons, school closures, and companies—including major names like Facebook (NASDAQ: FB), Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOGL, GOOG)—telling employees to work from home.
With more people staying in, there are a few stocks that could benefit.
“Stay-at-home is going to be a theme” as the coronavirus outbreak spreads, said Jim Cramer, “but Amazon (NASDAQ: AMZN) is going to get it to you.”
Amazon is likely to see a boost in grocery sales, and from consumers stocking up on household goods as shoppers avoid brick-and-mortar stores.
Cramer also noted that Amazon should benefit from lower oil prices, which have been tanking since Saudi Arabia and Russia launched an all-out oil price war after the two nations failed to come to an agreement on production cuts at last week’s OPEC+ meeting.
“If you want to go bottom-fishing, I do actually think Netflix is interesting here,” Sanchez said, adding that she’s optimistic on the stock “not just because it’s getting a boost around the coronavirus.”
“It also is… holding up quite well given all of the competition that it’s facing with Disney+, with ESPN, HBOGo,” Sanchez said. “All of those things should have been taking Netflix down more, and I think it’s actually holding up OK.”
While Netflix could see a boost from new subscribers during coronavirus quarantines, it’s a micro trend that Sanchez said really won’t mean much in the grand scheme of things.
“It’s the long-term trends that matter,” she continued. “The reason I’m a little more optimistic is, one, it’s a lot cheaper than it used to be, so, that’s No.1: valuation. I think it represents a good value. And two, they are holding up better than expected against all of that competition. So, I think from a value perspective, this is a good place to step in.”
Netflix shares are down -15% in the past week and just over -23% from it’s all-time high reached in 2018. Analysts’ average price target indicates nearly 21% upside over the next twelve months.
Jefferies analyst Alex Giaimo’s stay-at-home pick is videogame publisher Activision Blizzard (NASDAQ: ATVI), rating it a Buy with a $72 price target – 32% higher than the current price.
“ATVI screens the most favorably to benefit from increased stay-at-home activity,” Giaimo wrote in a note to clients. “We see mobile as a prime beneficiary given it’s free-to-play nature.”
Giaimo noted that Activision’s app downloads and engagement for its mobile titles including Candy Crush have been climbing in recent weeks, and is optimistic about the videogame maker’s free-to-play battle royale game Call of Duty: Warzone that was launched on Monday.
The company also has greater exposure to Asia with 14% of its sales from the region, giving Activision “an advantage if Eastern gamers are spending more time at home.”