We know tech is getting shelled Tuesday morning but it is important to know what's been working and what hasn't during the time since the pandemic began to play a nefarious role in the economy. That's when we set up the Cramer Covid-19 index of stocks we thought would do well in the new, crippled world of the business. We didn't know what to expect except outperformance and we got that in spades because we made it chock full with companies we expected to do well in the vicious slowdown -- unemployment had soared to 14.7% when we created the index in April -- but also the stocks that benefited from the remarkable work-from-home movement.
Five months later the results are in: Despite the tremendous slowdown in business in this country, the companies that do well in a pandemic have extraordinary performance matched by their stocks while the companies that historically outshined all others in a recession have laid an egg.
I can tell you why, or let the stocks do so. Let's go with the latter.
The best performer since we set up the index in April was none other than a stock of a company that had become the darling of the newbie traders, some of whom may actually know what it does: Fastly (FSLY) . This amazing company, with a stock to match --up 252% -- offers the best web service via its best-in-class content delivery system, one that drew Amazon (AMZN) to its fold because of its incredible image delivery. Other clients include The New York Times (NYT) , Pinterest (PINS) , Stripe, Slack (WORK) and Shopify (SHOP) , all of which need speed and high-quality video. Although it sells at about 20 times next year's sales -- way too high for all but the real momentum traders -- it is both a work-at-home and a play-at-home stock.
Next is Livongo (LVGO) , the personal health adviser that is merging with Teladoc (TDOC) to create an online health system that was forged with Covid -- Livongo advises diabetics and hypertension sufferers, classic preconditions -- and Teladoc benefited from the newfound hatred of the waiting room and, again, was found satisfying so I don't expect people to go back. I love the combination. Livongo itself has rallied 208%.
I know many investors are in disbelief that Peloton's (PTON) stock could have been a bargain in the twenties but it was, as it has advanced 154% since we compiled the index. With gyms closed, with fear of contact all over the place, Peloton became the de facto workout. It's remarkable that thing has developed into a genuine ecosystem. It was heavily shorted when it came public. No more. Crushed them.
I think a combination of a desire to own a financial with little credit risk and the need to find a stock that allowed new merchants to sell things online brought Square (SQ) to the fore, with a 136% rally. I was a huge supporter of this stock since $12, still am, but there's no way that I can back it as strongly up here with the soon-to-closed small business procession because of the end of the Paycheck Protection Plan and the need for social distancing. It's really developed an amazing payment ecosystem around the register-virtual or otherwise.
Can you believe Zoom (ZM) isn't number one? It's only the fifth best performer. When companies that are barely supposed to make money crush it, when they are doing a set of numbers you wouldn't expect to see for another year, you know you have a pandemic star. From zero to household name in seconds, I think Zoom is here to stay.
Twilio (TWLO) , up 112%, is also obvious. It gives a Lyft (LYFT) or AirBnB or any institution a better contact with its customers via text. It's digitized the process of discovery and ordering. I know DocuSign (DOCU) took a header when it reported last week, but even after the beating the darned thing's still up 105%. It has two tailwinds -- work at home and low interest rates. By the way, I thought its quarter was perfect but it simply didn't matter. In fact, the selloff for the index was so vociferous that nobody even examined the excellent quarter.
Zscaler (ZS) is the top-performing cybersecurity company for enterprises that want to be sure the work-at-home trend is protected. That group is smoking but Zscaler's the hottest, having traveled 99%. Wix (WIX) , up 92% can create the website you need to work from home and look like you are running a big business instead of a puny one. Finally, DataDog (DDOG) , up 90% is a fabulous analytics company that does cloud monitoring. Cloud, cloud and more cloud.
And the losers? The biggest is Gilead (GILD) , the maker of Remdesivir, the sometimes successful anti-Covid drug. It's stock is down 17%. One of my favorite health insurers, Centene (CNC) is next down 15%. Then Eli Lilly (LLY) of all things: an incredible drug company, off 7%. Almost all the drug stocks are performing horribly: Johnson & Johnson's (JNJ) down 4% and it has a hopeful vaccine. And then its Campbell Soup (CPB) , which reported last week and made you feel that great Covid stock up is over.
My conclusion? When unemployment goes from 14.7% in April to 8.4% in August, no one wants recession proof. But when Covid can't be stopped everyone wants to digitize and unlike food stocking, digitization is here to stay.