E-commerce platforms and companies helping people work from home are proving to be good investments during the pandemic and are likely to take off post-virus.
The coronavirus has undoubtedly changed the way we connect with our friends, colleagues, and even how we do our shopping. The virus has also triggered a huge downturn in the economy and while many businesses are suffering, there are a few that are a great buy this month as the prices remain relatively low. Here are my top three picks:
It doesn’t matter what generation you are from, nearly everyone has a Facebook (NASDAQ: FB) account. At the social media giant’s recent earnings call, it revealed 1.73 billion daily active users which is up 11% compared to last year.
The company’s stock price plummeted by 14% this year which was partially due to investors worrying Facebook revenue would drop as advertisers kept away from the platform. However, the stock jumped more than 10% after the company posted strong first-quarter earnings that exceeded expectations. Revenue for the first three months of 2020 went up by 17% year-on-year to $17.7 billion, with analysts expecting $17.2 billion. Facebook mentioned that there was a massive decrease in advertising revenue, but in the first few weeks of April it has picked back up and is flat compared to the same time in 2019.
While the company is in the midst of the huge economic downturn, it still has a few exciting projects in the works. The social media giant recently announced its single largest investment of $5.7 billion into Jio Platforms, an Indian telecom company. Also, Facebook recently launched a video chat and livestream feature in its app as it attempts to keep up with the likes of Zoom, (NASDAQ: ZM) who many are turning to for their video catch ups with friends or work conferences. With a P/E of 28, Facebook is a great long term investment and is selling for a pretty reasonable price at the moment.
A number of businesses all around the globe are turning to companies like Microsoft (NASDAQ: MSFT) as they adapt to having their employees work from home during the pandemic. Microsoft is in a very strong position, and its stock has even gone by 11% since this time last year.
The main point of difference for the company is that its type of products such as Microsoft 365 (Skype and Office 365), Teams and Azure (cloud) services target a range of businesses and organizations and are hard to replace. Also, Microsoft has more than $138 billion in short-term investments and cash, which is a great sign that it will weather the coronavirus storm.
The company has a big focus on its cloud products. While Microsoft isn’t as popular as Amazon’s Web Services (NASDAQ: AMZN), its Azure cloud platform is gaining for traction and now holds 18% of the cloud market. As for Iits Teams software, which competes with Slack, (NYSE: WORK), it saw a huge jump in daily users from 20 million at the end of 2019, to more than 40 million as the coronavirus started. This stock is not only doing extremely well in the current economic climate, but it will continue to make noise in the future.
This company aims at helping businesses build their e-commerce presence and has around one million merchants that use the platform. Shopify’s (NYSE: SHOP) stock has increased by more than 22% this year and analysts predict first-quarter sales to go up by 38% year-on-year to $443.7 million when they are announced on May 6, 2020.
One of the main reasons that Shopify is continuing to do so well could be because companies are relying on online sales more than ever. The company is much smaller than other e-commerce competitors like eBay (NASDAQ: EBAY) and Amazon but it is growing at a good pace. Though the stock is still trading at a P/S over 50, it would make for a good long term investment.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.