While the current situation had a huge impact on the economy, all is not lost when it comes to investing in stocks. Many of the stocks that were previously considered “boring” are suddenly taking a turn towards a more profitable route. It’s key to remember that a less exciting stock is typically one that is more stable, from utilities like Duke Energy (DUK) and Xcel Energy (XEL) to breakfast cereal stocks like Kelloggs (K). But, if you’re looking for a small-term swing, these market ideas might make for a good buy to help boost your income during trying times. Always do thorough research before purchasing stocks, though, and if in doubt, stay the course.
Here are some suggestions for industries to investigate.
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Wellness and Safety
From disposable gloves to other PPE products, the health industry is one place that you can research to see what type of stocks might be a long-term smart investment. When you think of the health industry, you likely assume that means medical. While pharmaceuticals and medical companies are often high-yield stocks, right now things like disposable face masks and hand sanitizer are just as coveted as the world and consumers habits change.
Even though the prices of PPE has stayed relatively stable, the sheer demand has skyrocketed. Similarly, things like Clorox (CLX) is going strong as households binge on cleaning products as soon as they hit the shelves.
Many people are staying inside more with events and activities mostly canceled. Because of that, many individuals are seeking out things to kill their boredom, and alongside books, workout videos, and puzzles are video games like Animal Crossing New Horizons, which came out on March 20th during the initial shutdown period. The video game industry, simply put, is booming due to the sheer number of people looking for something to keep them busy while they staying at home and social distance. From Activision Blizzard (ATVI) to Electronic Arts (EA), there are plenty of stocks to research to see which one may benefit you most.
It could go unsaid that Amazon is raking in cash right now, but there are other smaller online shopping companies that you should consider looking into; if you have recently online shopped on something other than Amazon, chances are you used PayPal (PYPL) and checked out through a Shopify (SHOP) cart. Neither of these is new to the market: Shopify went public in 2015, with PayPal having it’s first initial public offering nearly 20 years ago. Turns out that newer is not always better.
This probably won’t come as a surprise, if you’ve ventured into any grocery store in the past two months and looked at the empty shelves of beans, soup, and other canned goods, but canned foods stocks are a great place to invest right now. Campbell Soup (CPB). If you think that Campbell soup only sells soup, you might be surprised to know that they have a slew of other subsidiaries beneath them, ranging from Milano cookies to Kettle chips and Swanson. If you’ve eaten anything canned or anything you’d considered easy or junk food, you’ve likely been putting some cash into the hands of Campbell foods. Other huge players in the market include Hormel (HRL) and General Mills (GIS.)
With the USA slowly reopening, there may be less reliance on cooking quite as much food at home. When kids return to schools, and parents return to their normal workdays, it’s likely that these stocks will slowly decrease slightly as people begin to order more takeout and have sit-down meals at restaurants, so keep that in mind as you research any food stocks.
When the world transitioned to working from home, technology companies that are used to support remote work boomed. Some of these include video conferencing software, online document signing via DocuSign (DOCU), and security software for newly remote workers. Citrix (CTXS) hit an all-time high in early May after skyrocketing in March while businesses migrated towards a remote workforce.
A subset of these technologies are those focused solely on security. Many companies are not used to needing a VPN to keep their internet connections secure, and others have started to realize that not migrating to cloud-software was highly insecure and have begun to do so. Technology companies based on keeping data secure will never go out of style, even if they seem relatively boring as a stock investment.
What technologies do you currently use at the business you work at or own? Did you transition your workplace to using Slack, or something similar? Are the software and technologies different now than they were just three months ago? They likely are, and this is a great place to start to know where you may want to invest your money. Keep in mind that software like Zoom video conferencing may not stand the test of time though, especially with their recent security issues, so make sure you’re spending time researching each stock before taking the plunge. Even so-called boring stocks can take a dive bomb.
By day six of staying at home, you’d likely stopped saying, “It’s so nice to have all this free time,” and had transitioned to the “It’s time to rearrange the furniture” stage of stay at home. (Thankfully this was before the everyone-gets-a-home-haircut stage, which really didn’t gain a foothold until about day 23.)
For some, rearranging furniture just wasn’t good enough, and places like Wayfair (W) have done really well economically. Families that had held on to their jobs during the pandemic are suddenly at home with their loved ones, often working remotely, with nothing to do. New furniture just seemed the natural next stage.
Nobody is totally sure what the next step during this time. Many are holding their breaths that the country will somehow be able to return back to normal so that we can have barbecues and summer get together in 2020. There’s just too little evidence to know. It’s advisable not to make huge stock purchases for stocks that don’t have a reliable track record but to thoroughly research any purchases you plan on making. That goes for now, and for when life returns to “normal.”