The "work at home" and tele-medicine themes are both seeing a great deal of attention due to the coronavirus. These stocks should do well as long as coronavirus is a threat, and should still continue to grow once it is a distant memory, notes Eddy Elfenbein, a contributor to MoneyShow.com and the editor of Growth Stock Advisor.
Slack Technologies (WORK) describes their software as a "collaboration hub that brings the right people, information, and tools together to get work done." The software lets teams work together on projects, whether team members are located in the next cubicle, or halfway around the globe.
And that is why the stock has done so well, as coronavirus fears have taken root. With Slack, no one needs to come into an office, and business continues as usual.
Now, it's not a replacement for physically manufacturing products, but almost any white-collar job can be performed at least to some degree, if not completely, using the Slack platform.
Slack was one of the underperforming IPOs of 2019. But after being cut in half, it appears to have found a bottom and has turned higher with the news of coronavirus.
More and more companies small and large are finding they can convey information, and market to their potential customers via webinars. And the number one way to do this is via Zoom Video Communications (ZM) .
Zoom provides a webinar platform that is easy to use, and that can accommodate up to 10,000 viewers at one time. This makes the two-way platform great for meetings, presentations, or quick check-ins with telecommuters. A combination of Slack, for collaborative project work, and Zoom, for face-to-face communication, provides all a stay-at-home worker could need.
Like Slack, Zoom is a young company with plenty of runway for growth.
Teladoc Health (TDOC) is a virtual health care provider. The company links consumers with medical professionals via phone, tablet, or computer. This model was already taking off before coronavirus and has gotten a major boost from the virus outbreak.
One of the last things I want to do when I'm sick is go to the doctor with all the other sick people. The Teladoc model is completely logical and should continue to do well even when a vaccine for coronavirus is found. The model is perfect for millennials, now one of the largest segments of the U.S. population, who are completely comfortable doing everything electronically.
The company reported revenue of $156 million in the fourth quarter of 2019, an increase of 27% year over year. Total visits using the Teladoc platform increased by 44% to 1.2 million. I believe this is just scratching the surface of where this service can go. While the stock is not cheap, it should quickly grow into its valuation, especially if the coronavirus outbreak worsens.
Meanwhile, many of the large insurers have moved into the telemedicine arena. While not a large part of their business yet, I believe it will grow much larger, with coronavirus acting as an accelerant to this new business line.
Here are three large companies that are already providing a telemedicine option.
Anthem (ANTM) delivers doctor visits to your phone through its telemedicine platform called LiveHealth Online. Anthem has set up a clean, easy to use website that provides visitors with short videos on how LiveHealth works, and what the process is like to "see" a doctor.
This is an important piece of the puzzle for customers who may be elderly and not be as familiar with technology as younger users.
The process is very much like seeing a doctor in person. The patient tells the doctor what their symptoms are, the doctor conducts an exam via the telephone or tablet, and then a treatment plan is devised. This can include a prescription if that is what is needed.
Anthem, like other stocks, has been volatile the past month but has held up well overall. The company recently traded at a PE of 15.5 and yields 1.6%. Full year 2019 revenue grew 12.9% year over year to $103.1 billion.
UnitedHealth Group (UNH) offers its Virtual Visits to anyone needing to see a doctor with a wide range of symptoms and afflictions, from seasonal flu to fever to pinkeye.
And, the platform offers the opportunity to speak directly with a doctor in 20 minutes or less, from the time you initiate the visit. I don't know about you, but I don't remember the last time I spent less than a half-hour in any waiting room for a doctor's visit.
Like the other companies here, if your insurance plan covers a doctor visit, it also covers a telemedicine visit. Even mental health visits, if covered under your plan, are also available using the Virtual Visit.
UnitedHealth had revenue of $242 billion last year, which was a 7% year over year increase. Fourth-quarter earnings came in at $3.90 per share, representing 19% year-over-year growth for the company.
A few years ago, Humana (HUM) accelerated its technology push across a broad range of areas. This includes building a customer's health history into a cradle to grave system, and a focus on areas such as telemedicine.
Humana emphasizes in its virtual visit that the doctor you are visiting on their telemedicine platform is board certified and that the connection for your virtual visit is secure.
This is an important selling point to an elderly clientele that wants assurances they are seeing the same caliber of doctor via a virtual visit. And, to both the elderly and younger market that wants a secure way to provide their confidential medical information.
Humana earned $3.84 per share in fourth-quarter 2019, a 48% year over year increase. The company is expected to grow its Medicare Advantage membership base by between 7.5% and 9.2% in 2020, which should provide a nice boost to 2020 earnings.
Each of these three companies has held up well in this market, have outstanding growth overall, and should continue to benefit from telemedicine offering long after coronavirus is a distant memory.