As we watch the market crumble from the absurdity of the Snowflake (SNOW) debacle - too much money chasing an already expensive stock - we may be missing something that's beginning to become ubiquitous and yet somewhat invisible: the staying power of the work from home movement.
I say this because I find it keeps popping up all over the place. In the span of 24 hours I had four experiences that have to be called out about how work from home may be the norm.
First, yesterday we had Aaron Levie on, the hard-working CEO of Box (BOX) , the data storage and security company that had a very good quarter. What spurred sales? Workers at home who needed to share data in a secure fashion. It was a strong tailwind and it isn't over.
Second, we had Mark Clouse on from Campbell Soup (CPB) . I regarded this as an incredibly important interview because when he spoke on his earnings conference call, or I should say, misspoke, he said that things could return to normal after the big pantry stocking ended.
What he meant though was something quite different. Campbell has so much demand, chiefly from the work at home people for the half of the business that's snacks, but also the traditional canned soups, that the company had supply chain issues that will be resolved. In other words a very good quarter could have been a monster quarter if he had the product.
Millennials are snackers. We have known that forever. As irresistible as snacks are at the office, you typically have to go somewhere in your building, perhaps the cafeteria, to get good ones. Now if you want Goldfish or Pepperidge Farm cookies or any of the Hanover pretzels or Cape Cod Potato Chips and so much more, you probably have to walk to the adjacent room to get them.
I think the cash flow here is immense and the sustainability far greater than most realize. I know it's sleepy and no Snowflake or Zoom (ZM) But it is undervalued, could have a growing dividend and is mispriced given the staying power of the stay at home thesis.
Finally, last week on the game plan I signaled our Herman Miller as a stock to watch. The maker of all sorts of furniture had a terrible last quarter as sellers correctly figured out that office spending on furniture - the traditional buyer - could really be crushed.
But what people couldn't figure out? That his quarter would be all about the home. I am just going to quote from the release: "Our retail business led the way this quarter with orders up an impressive 40% over last year. Demand was led by the Home Office category which increased nearly 300% over last year. Consumers are also investing in their broader home environments, which led to a positive year-on-year demand across multiple product categories notably upholstery, outdoor and accessories."
Can you believe that? You put that money to work on a beautiful Aeron chair you are going to use it.
No wonder the stock's up 8 points or 34%.
Now none of this should be too earth-shaking given that Stuart Miller from Lennar (LEN) , the gigantic homebuilder, said the home is booming, with the home office being a big spur. He said housing was in a boom because of Covid-19 and those trying to escape from it.
Which brings me to why I think these moves all have staying power. Companies have figured out that it might be both cheaper and safer to keep people at home. Sales have held up. And when they bring people back?
You, the spread of Covid-19, and business? It's still not worth dying for.
