The lockdown trade is back.
We see Covid-19 making a comeback in a lot of states, with 17 of them going up in new cases and, more importantly, staying higher. It's getting cold. The immune systems will soon be compromised. The darned bars and restaurants are open and they are breeding grounds, because you can't wear a mask and the air is circulating with your germs. Most importantly, the United Kingdom and Spain seem to have lost control of the virus and lockdowns beckon. They were the precursors before, how can they not be again?
So, buyers go back and buy all of the stay-at-home stocks, including those that are about eating at home, a group that had been abandoned for weeks. Why not?
The turn up in cases means one thing is certain: We are not going back to work any time soon. Or, more importantly, we are not going back before we get a vaccine.
That means it's time to get out of Dardens (DRI) , and the restaurants that require people to go indoors to have any hope of making money and we return to delivery. That includes Domino's (DPZ) , which had a bang up quarter not that long ago. I don't know if you caught their ads against the games this weekend, but I think Wingstop (WING) is another alternative.
There's certainly a lot of food stocks to consider. I think you might want to look at Campbell Soup (CPB) , given that we just had the CEO, Mark Clouse on, and he told such a good story about a real shift among millennials to buy their products, both the snacks -- think goldfish -- and the soups which turn out to have far fewer preservatives and you can't fill up your cup with fresh soup anymore.
I don't want to outthink it. You can buy Amazon (AMZN) . But I vastly prefer Walmart (WMT) because it is doing an amazing job with its e-commerce offerings and this TikTok deal is a windfall. Remember that Amazon Web Services is a huge profit generator for Amazon, not only because of its hosting fees, but also because of advertising. Walmart will be able to do the same thing with TikTok, which has one hundred million viewers. You know I have liked the big box retailers. Walmart now comes to the fore.
The at-home merchants and their supporters are back. Despite some really negative research about Shopify (SHOP) , the market wants that kind of work-at-home stock today. Why not? It has fallen 200 points. The small businesses need Paypal (PYPL) and Square (SQ) for payments. And they need Twilio (TWLO) to get the word out.
The market didn't seem to care for Adobe (ADBE) last week after what I thought was a great quarter. But the buyers can't resist now. Docusign (DOCU) is on fire: and why not; deals are docusigned and the exodus from the cities has renewed. My best contacts are saying that multiple offers well above the asking price are pretty much the rage.
You can return to the cybersecurity stocks. We have come to view them as quintessential to the work at home trade. I like Palo Alto (PANW) , Zscaler (ZS) and Crowdstrike (CRWD) and look at Okta (OKTA) go.
Finally there's the tried and true. Zoom (ZM) , after getting pancaked, because the work at the office trade had made a comeback, is now loved again. No gyms for us; we are back on our Pelotons (PTON) . Finally, Roku (ROKU) is hitting an all-time high and why shouldn't it? What else is there to do when the bars and restaurants are breeding grounds. When they open, Covid-19 spikes.
I could tell you to go buy the whole Cramer Covid-19 index, but the drugs are, once again, under assault. It's the political season, and they are mighty hard to own. It's a cherry-pick, and these stay-at-home, work-at-home stocks don't stall after one-day's trading. They tend to work until there is a definitive period where the cases are going down and the offices are open. I look at it like this: as long as there is a big line to get into elevators at offices, because only four people can go into one at a time and they have to face the walls, go buy some stock in Campbell's Soup.
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