Things are going to be different in a post-Covid-19 investment world.
I'm not talking about a depression or stock market crash, but the volatility will definitely stick with us for a few earnings cycles.
What about investment themes? We are seeing those develop both for traders and investors.
On the trading side, the short-term theme has been about a race to a test/cure as well as a race to the grocery store to stock up on canned goods, hand sanitizer, and toilet paper.
From the pharma/biotech group, we are only going to see a few winners emerge. My bet is we'll get two big names, maybe three, with Gilead Sciences (GILD) and Abbott Labs (ABT) being the clear frontrunners.
I wouldn't be shocked to see one small name emerge, but I don't think it will be the makers of masks and equipment to come out ahead for the long run. Instead, I'd aim more toward a company involved around a thermal test-taking device similar to a metal detector as a potential winner. Sadly, I don't know of one yet, but I've started digging. If you've got one, send it my way.
Long-term themes will revolve around technology and distancing. I sincerely doubt life will snap back to the way we lived it. Sure, there will be similarities, but those impacted by this pandemic will likely think twice about some things they never did in the past. We've seen an array of companies showcase their potential usefulness in a post-Covid-19 world.
Many names you might have already seen mentioned here on Real Money, companies such as Citrix Systems (CTXS) , Zoom Video (ZM) , Teladoc Health (TDOC) , Atlassian Corp. (TEAM) and even Chewy (CHWY) . Heck, Peloton (PTON) may even benefit.
I'd add Livongo Health (LVGO) to the list.
For Livongo, it's not about the now, but about how we should see a change in how people care about their health after Covid-19. One of the biggest takeaways in this tragedy is those with underlying health issues are most at risk of complications and death. High blood pressure has consistently been near the top of the list along with other pre-existing conditions like diabetes.
This is precisely what Livongo targets. The company helps members manage chronic health conditions and it does so using technology.
Livongo's AI+AI platform includes real-time coaching and personalized analytics. It also helps members fulfill their hardware and supply needs.
The company does all of this while simultaneously removing the stigma the chronically ill often feel from a society that cannot relate. And it does all of this via a subscription-based model.
Clients, mainly governments, health plans, self-insured employers, private employers, health plans, and large employers sign up with Livongo. From there, the company identifies those with chronic conditions and the client pays a per-month per-participant fee for those employees that use the service.
Already, more than 30% of Fortune 500 companies are clients. While Livongo began focused on diabetes, it has expanded to include other chronic conditions like prediabetes, hypertension, weight management, and behavioral health.
This strikes me as something both employers and society will want to see. The early results are encouraging for clients as they see savings in health care costs roughly twice the fee paid per participant to Livongo.
From a technical perspective, LVGO stock will likely need a close above $29 to work back to the summer highs. The first area of support for bulls sits at $24 with additional support around $22.
Secondary technicals have turned high with bullish crosses in momentum and trend along with a small bullish divergence in the Full Stochastics indicator.
The volatility does make this a name one can trade, but if you are building a post-pandemic portfolio, I believe you should consider starting a build in Livongo shares now.
My plan is to begin adding positions this week.
Tim Collins provides options trade ideas each day on Real Money Pro, our sister site for active traders. Click here to learn more and get great columns, commentary and trade ideas from Tim Collins, Mark Sebastian, Paul Price, Doug Kass, and others.