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The coronavirus outbreak has led to travel restrictions around the world and more people are being encouraged to work from home. Major airline stocks and Priceline owner Booking Holdings are among the hardest hit over the past few weeks.
But there are investment opportunities if Americans remain predominantly at home. Netflix Shares Are Up Slightly In The Past Five Days – S&The P 500 fell more than 8%. Netflix shares are up more than 15% this year.
Netflix Rises, With AMC and Cinemark Cinema Shares Down More Than 15%.
«The market likes Netflix on the assumption that hibernation has the upper hand», – said Bill Smead, chief investment officer of Smead Capital Management.
Other travel industry stocks – especially cruise operators Carnival, Royal Caribbean and Norwegian – have taken an even bigger hit.
It makes sense that nervous Americans will take more precautions until the coronavirus epidemic subsides. This couch potato behavior could benefit other businesses that satisfy the wishes of home consumers..
Amazon shares, while declining last week due to falling markets, fell less than the overall market and are up 4% year-over-year. YouTube owner Alphabet’s shares are up notably this year, while the Nasdaq is down more than 2%.
But some other promotions can be a safe haven if consumers become more fearful and workers have to work from home without travel. Investment firm MKM Partners created «Home Stay Index», to highlight some of these companies. Netflix and Amazon are two of the 33 stocks in it. The index also includes companies such as Facebook, video game developer Activision Blizzard, exercise equipment maker Peloton, and food delivery service GrubHub..
«We tried to determine what products / services / companies could benefit in the world of quarantined people. What would people do if they were stuck at home all day?, Asks JC O’Hara, Chief Marketing Officer at MKM Partners. – Instead of trying to predict how much stocks might fall, we decided to find out which stocks would hold up better».
ABOUT&# 39; Hara noted that video conferencing company Zoom, identity management software company Okta, and office collaboration tool Slack could also win.
There is one more share that was not included in the O report.&# 39; Hara, which has also grown significantly recently in response to expectations of increased demand after the outbreak: Teladoc, a virtual healthcare company that allows patients to video chat with doctors.
Teladoc shares are up nearly 10% last week and 50% this year – another sign that online businesses foresee more demand for their services if coronavirus fears escalate..
«Telemedicine and online learning are just two examples of the benefits the internet can provide. Other internet companies providing food delivery, e-commerce, and streaming services may face user growth as coronavirus fears keep consumers at home», – say analysts at UBS Global Wealth Management.
UBS Analysts Recommend Nasdaq Internet Index, which has top holding companies Netflix, Amazon, Alphabet, Facebook and Chinese e-commerce giant Alibaba.
«The properties of these home-focused companies offer some protection against the broader market.», – say UBS analysts.