Governments across the world are gradually opening the economies and relaxing shelter-in-place measures but fears related to coronavirus are only increasing. The United States set a record for new single-day coronavirus cases on Oct 24. This has once again raised fears in the minds of millions. The fears of coronavirus flaring up further may not be unwarranted, as there is still no sign of a vaccine to treat the deadly virus.
New cases of coronavirus are surging in almost all the states across the United States. Although another lockdown is quite unlikely as the economy needs to get back on its feet, it won’t come as a surprise if people once again start confining themselves to their homes. However, amid this uncertainty, a few businesses found an opportunity to cash in on during the pandemic, while most are still bleeding.
Coronavirus Cases Hit a New High
The United States reported more than 83,757 fresh cases of coronavirus on Oct 24, the highest single day spike in infections. The earlier record was set on Jul 16, when the country reported 77,362 cases.
The death toll in the United States has reached 223,995, according to data from John Hopkins University, which is another reason to worry. This has seen some states once again tightening restrictions. Meanwhile, the quest for a vaccine ran into trouble once again last week after one of the volunteers for AstraZeneca’s COVID-19 vaccine died in Brazil last week.
Braving the Pandemic
There’s a sea change in the pre- and post-pandemic world. Work and learn from home have become the new culture, while social distancing has changed business completely. Moreover, social distancing measures have made people more self-reliant and are keeping them indoors.
Although most sectors have taking a beating, shelter-in-place stocks are particularly taking advantage of the situation. The technology and consumer discretionary sectors are the two major beneficiaries of this pandemic. The Technology Select Sector SPDR (XLK) has returned 36.5% in the past six months, while the Consumer Discretionary Select Sector SPDR’s (XLY) has returned 38.6% in over the same time frame.
Dependence on technology during the lockdown period and stockpiling on fears of the virus spreading gave a big boost to these two sectors. With demand for essential goods surging during the lockdown, companies dealing in consumer staples and discretionary witnessed a massive push thus aiding their profits.
It won’t come as a surprise if people once again start stockpiling on fears of the virus spreading. Given this situation it would be prudent to invest in shelter-in-place stocks.
Zoom Video Communications, Inc. ZM has been benefiting from the work-from-home and online learning wave. Zoom uses AI to schedule video meetings and for a host of other things such as organizing attendee details and transcripting details.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 95.3% over the past 60 days. The company carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Spectrum Brands Holdings Inc. SPB offers a portfolio of leading brands in several product categories like residential locksets, plumbing, electric shaving and grooming products, personal care products, small household appliances, specialty pet supplies, and lawn, garden and home pest control products and repellents.
The company’s expected earnings growth rate for the current year is 26.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. Spectrum Brands has a Zacks Rank #2 (Buy).
Ollies Bargain Outlet Holdings, Inc. OLLI is a value retailer of brand name merchandise at drastically reduced prices. The company offers products principally under Ollie’s, Ollie’s Bargain Outlet, Good Stuff Cheap, Ollie’s Army, Real Brands Real Cheap!, Real Brands! Real Bargains!, Sarasota Breeze, Steelton Tools, American Way and Commonwealth Classics.
The company’s expected earnings growth rate for the current year is 54.6%. The Zacks Consensus Estimate for current-year earnings has improved 7.4% over the past 60 days. Ollies Bargain Outlet has a Zacks Rank #2.
Grocery Outlet Holding Corp. GO is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products that are sold through a network of independently owned and operated stores.
The company’s expected earnings growth rate for the current year is 54.4%. Its shares have advanced 1.3% over the past three months. Grocery Outlet has a Zacks Rank #2.
Lifetime Brands, Inc. LCUT is a leading designer, marketer and distributor of kitchenware, cutlery & cutting boards, bakeware & cookware, pantryware & spices, tabletop and bath accessories.
The company’s expected earnings growth rate for the current year is 53.3%. Lifetime Brands’ shares have gained 69.3% in the past three months. The company sports a Zacks Rank #1.
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