COVID-19 has set a gloomy tone in our lives and the economy. Each day, we received new cases of infection as well as deaths. Many businesses stay shut and some shut for good. The stock market experienced the fastest crash in history and economists projected negative GDP growths around the world.
Amidst this gloom, there were some businesses that benefited from the pandemic, or should I even say that they have prospered. In the worst of times, their share prices went on to set record highs! This is a list of outperforming stocks in the U.S. (except one in Singapore and a couple in Hong Kong) grouped according to their sectors.
Warning: This is a hindsight bias post – filtered by price performance and no sound fundamental principles applied.
Supermarkets
We all witnessed the frantic buying at supermarkets around the world or even participated in it ourselves. Toilet papers, instant noodles, pasta, canned food, rice, diapers and what not, were stocked at home as there were fears about a possible lockdown and supply cuts should the situation worsens.
Stocks like Walmart and Costco broke record high in their stock prices as their businesses are expected to receive a boost by the frantic buys. Even our local supermarket, Sheng Siong, broke new high too, gaining even more than the American counterparts.
Sheng Siong engages in the operation of supermarket and grocery stores under the Sheng Siong brand. It sells live, fresh, and chilled produce, preserved food, general merchandise, and household products.Walmart engages in retail and wholesale business. The Company offers an assortment of merchandise and services at everyday low prices. It operates through the following business segments: Walmart U.S., Walmart International, and Sam’s Club. The Walmart U.S. segment operates as a merchandiser of consumer products, operating under the Walmart, Wal-Mart, and Walmart Neighborhood Market brands, as well as walmart.com and other eCommerce brands. The Walmart International segment manages supercenters, supermarkets, hypermarkets, warehouse clubs, and cash & carry outside of the United States. The Sam’s Club segment comprises membership-only warehouse clubs and samsclubs.com.Costco Wholesale engages in the operation of membership warehouses. Its product categories include food and sundries, hardlines, fresh foods, softlines, and ancillary. It operates through the following segments: Unites States Operations, Canadian Operations, and Other International Operations.
E-commerce
E-commerce has been growing over the years and COVID-19 might just have given the adoption a boost. Consumers are trapped at home and e-commerce became the only viable way to experience retail therapy.
Here are some e-commerce listed companies that have achieved new highs in their stock prices during this COVID-19 period.
Shopify is not exactly an e-commerce player. It is an e-commerce enabler for individuals and companies to build their business on their platform. SEA, or formerly known as Garena, has transformed itself from being solely a game company to include an e-commerce platform, Shoppee. Amazon needs no introduction. Pinduoduo is a China-based e-commerce platform that aims to drive down prices for consumers through high volume spree buys.
Shopify operates a cloud-based commerce platform designed for small and medium-sized businesses. Its software is used by merchants to run business across all sales channels, including web, tablet and mobile storefronts, social media storefronts, and brick-and-mortar and pop-up shops. The firm’s platform provides merchants with a single view of business and customers and enables them to manage products and inventory, process orders and payments, build customer relationships and leverage analytics and reporting. It focuses on merchant and subscription solutions.Sea Ltd. (Singapore) is an internet and mobile platform company. The firm engages in the provision of online gaming services. It operates through the following segments: Digital Entertainment, E-Commerce and Digital Financial Services. The Digital Entertainment segment offers access to game-related content through game forums, group voice chat, live streaming, and other user socializing functions on the Garena mobile app and desktop application. The E-Commerce segment manages third-party marketplace through Shopee mobile app and websites that connects buyers and sellers. The Digital Financial Services segment includes financial services to individuals and businesses, including e-wallet and payment services through the AirPay mobile app and AirPay counter applications on mobile phones or computers.Amazon.com, Inc. offers a range of products and services through its Websites. The Company operates through three segments: North America, International and Amazon Web Services (AWS). The Company’s products include merchandise and content that it purchases for resale from vendors and those offered by third-party sellers. It also manufactures and sells electronic devices. The Company, through its subsidiary, Whole Foods Market, Inc., offers healthy and organic food and staples across its stores. The Company also offers a range of products like whole trade bananas, organic avocados, organic large brown eggs, organic responsibly-farmed salmon and tilapia, organic baby kale and baby lettuce, animal-welfare-rated 85% lean ground beef, creamy and crunchy almond butter, organic gala and fuji apples, organic rotisserie chicken.Pinduoduo engages in the development and management of an e-commerce platform. Its Pinduoduo mobile application offers a selection of merchandise for buyer acquisition and engagement.
Digital Doctors
Many would have dismissed the idea of receiving medical advice over the internet. Visiting clinics when we are sick has been ingrained in our heads and human behaviours are hard to change overnight.
This is especially so in a small country like Singapore, whereby we live in close proximity to a clinic. However, other countries may not have this luxury. The nearest clinic can be an hour drive away. Digital doctors become a viable avenue for patients to get consultation on common illnesses without long travels.
Today, we can have our vital stats recorded via wearables and provide these data to the digital doctors for diagnosis.
COVID-19 could have accelerated the adoption of digital doctor which otherwise, could have taken a much longer time for the consumers to shift their behaviour.
Teladoc and Ping An Good Doctor operate such digital doctor services in U.S. and China respectively. Both have seen exceptional returns of over 70% in their stock prices in under 4 months.
Teladoc Health engages in the provision of telehealthcare services using a technology platform via mobile devices, the Internet, video and phone. Its portfolio of services and solutions covers medical subspecialties from non-urgent, episodic needs like flu and upper respiratory infections, to chronic, complicated medical conditions like cancer and congestive heart failure.Ping An Healthcare & Technology engages in the provision of online medical and wellness services. It operates through the following business segments: Family Doctor Services, Consumer Healthcare, Health Mall, and Health Management and Wellness Interaction.
Collaboration Softwares For Remote Working
Non-essential workers in Singapore are not allowed at workplaces during the Circuit Breaker period. Likewise in other countries which have some forms of lockdown. White collar workers are able to work remotely due to the availability of online collaboration softwares.
Microsoft is best known for office and productivity softwares but smaller specialised businesses such as Atlassian (for software developers), Citrix (digital workspace), DocuSign (digital signatures) and Zoom (video conferencing) have carved out their niches
Zoom Video Communications engages in the provision of video-first communications platform. It connects people through frictionless video, voice, chat and content sharing, and enable face-to-face video experiences for thousands of people in a single meeting across disparate devices and locations. It focuses on customer and employee happiness, a video-first cloud architecture, recognized market leadership, viral demand, an efficient go-to-market strategy, and robust customer support.
DocuSign provides cloud-based electronic signature solutions. Its cloud based electronic signature platform helps companies and individuals securely collect information, automate data workflows and sign anything. The firm automates manual, paper-based processes allowing users to manage all aspects of documented business transactions include identity management, authentication, digital signature, forms and data collection, collaboration, workflow automation and storage.
Citrix Systems, Inc. engages in the design, development, and marketing of information technology solutions. It provides digital workspace that unifies apps, data, and services. It markets and licenses its products directly to customers through web, systems integrators, value-added resellers, and service providers.
Microsoft Corporation is a technology company. The Company develops, licenses, and supports a range of software products, services and devices. The Company’s segments include Productivity and Business Processes, Intelligent Cloud and More Personal Computing. The Company’s products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games, and training and certification of computer system integrators and developers. It also designs, manufactures, and sells devices, including personal computers (PCs), tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories, that integrate with its cloud-based offerings. It offers an array of services, including cloud-based solutions that provide customers with software, services, platforms, and content, and it provides solution support and consulting services.Atlassian engages in the design, development, license, and maintenance of software and provision software hosting services. Its products include JIRA software, align, core, and Service Desk, Confluence, Trello, Bitbucket, Sourcetree, bamboo, opsgenie, and statuspage.
Conclusion
There were many more sectors that have set record highs such as the pharmaceuticals and infrastructure for telecommunications. Stocks like Netflix and Clorox have also done well, providing entertainment and disinfection products for consumers.
Do note that this list is not meant for recommendations but to give you a sense on what stocks have done well – defined by achieving their stock prices hitting all-time highs during COVID-19.
I have not checked their fundamentals and merely filtered them based on price performances alone. Many of these stocks have yet to release their quarter results that could give us an indication of their business performances during COVID-19.
Co-founder of DrWealth. Built a business to empower DIY investors to make better investments. A believer of the Factor-based Investing approach and runs a Multi-Factor Portfolio that taps on the Value, Size, and Profitability Factors.
Conducts the flagship Intelligent Investor Immersive program under Dr Wealth.
An author of Secrets of Singapore Trading Gurus and Singapore Permanent Portfolio.
Have been featured on various media such as MoneyFM 89.3, Kiss92, Straits Times and Lianhe Zaobao. Given talks at events organised by SGX, DBS, CPF and many others.
