The 10 best stay-at-home economy stocks to buy.
With the rise of telecommuting and the “gig economy,” many Americans are making extra money on the side, or working on more flexible terms than ever before. Thankfully, investors can profit too, by investing in the best stocks to buy for the so-called “stay-at-home economy.” Activities that used to require taking some form of transportation, or at least venturing outside your residence, can now be conducted from the familiar comfort of your own home. A handful of companies have built their business models around this behavior, and are collectively making billions. Here are 10 of the best stocks to buy for the stay-at-home economy.
Netflix, Inc. (ticker: NFLX)
Let’s start with the most obvious example of a stay-at-home economy stock: Netflix. Clearly, NFLX has been one of the best stocks to buy in the entire market in recent memory, and it’s no coincidence that those explosive rallies followed exceptional growth in streaming memberships. Between 2012 and 2017, Netflix grew from 33 million to 117 million members, as earnings soared from $17 million to $558 million. In the stock market universe, it’s rare to find a company that’s played such a massive role in changing consumer behavior — but among stay-at-home economy stocks that’s not so rare.
GrubHub (GRUB)
What’s a more perfect embodiment of staying home than getting food delivered to your front door? Delivery is practically as old as the automobile itself, but services like GrubHub, a wildly popular online delivery platform, have taken it to the next level in recent years. Consumers speak with their wallets, and they’re practically puncturing their lungs demanding their dinner come to them: GRUB has grown revenue around 400 percent over the last four years, and Wall Street is coming to appreciate that, with shares up over 150 percent in the last year. Analysts expect revenue to grow another 40 percent in 2018.
Take-Two Interactive Software (TTWO)
Take-Two Interactive is one of the world’s elite video game developers, and through its Rockstar Games and 2K brands publishes a number of hit franchises like Grand Theft Auto, Red Dead Redemption, BioShock, WWE 2K and NBA 2K, among others. In a fascinating move emblematic of the coming eSports revolution, TTWO partnered with the National Basketball Association to launch the NBA 2K League — a league of professional gamers playing NBA 2K against each other. Seventeen of the NBA’s 30 teams own their own virtual teams, and a live draft was conducted in April. Gaming isn’t going anywhere, and TTWO remains one of the best stocks to buy.
Amazon.com, Inc. (AMZN)
Clearly, the ability to buy shoes, dog food and TVs — and have them arrive a day or two later — all from the comfort of your bedroom saves a lot of time and energy. It’s no wonder AMZN stock has shot up like a rocket in the last few years; between mid-2013 and mid-2018, shares gained 494 percent. Amazon also owns Twitch, the popular online live video streaming platform that also happens to own the broadcast rights for the NBA 2K League. Considering Amazon’s Alexa, the ubiquitous virtual assistant, lets you shop, hail Ubers and order food with a few magic words, AMZN is arguably the prototypical stay-at-home economy stock.
Domino’s Pizza (DPZ)
Pizza delivery has been around for ages. But the renaissance in delivery apps like Postmates, UberEats, GrubHub and the rest has only come recently. Undoubtedly, that trend has greatly benefited Domino’s by increasing its distribution. The company has also famously embraced the app revolution and moved quickly to take advantage of the huge premium consumers place on convenience. Incidentally, you can also order your favorite Domino’s pie through Amazon’s Alexa. DPZ’s momentum continues; having advanced from $13 to $250 a share in 10 years, earnings more than doubled between 2014 and 2017 alone. Considering aggressive share buybacks, DPZ still looks like one of the best stocks to buy going forward.
Wayfair (W)
Starting to notice a trend here? It seems like the best stocks relating to the stay-at-home economy have all been incredible outperformers. Wayfair is another online retailer, but unlike Amazon, it focuses almost exclusively on home furnishings. In a way, Wayfair is a derivative play on the tendency to stay-at-home more; it makes sense that Americans spending a lot more time at home would want to make that environment as nice as possible (but preferably without venturing out of the house). Even after quintupling sales between 2013 and 2017 to $4.72 billion, analysts expect revenue to jump another 33 percent in 2018.
Logitech (LOGI)
Another somewhat derivative way to invest in some of the biggest trends in society — notably the rapid growth in gaming, but also telecommuting and the tendency to make homes “smarter” — is to buy Logitech stock. On the surface, it’s a boring hardware company selling mice, keyboards, speakers, home security cameras and the like. But quietly, it helps power the gaming revolution with its specialized products, ranging from PC gaming controllers and joysticks to headsets, racing wheels, and high-tech mice. Scoff if you want, but LOGI has been accelerating top-line growth for the last four fiscal years. Gaming is a big reason why; that segment grew 57 percent in fiscal 2018.
Shopify (SHOP)
Forget food and entertainment. Commerce itself has changed with the tools of today’s internet. Not only do millions of Americans telecommute to work, but today you can literally make a living from home with the right idea and entrepreneurial spirit. Enter Shopify. One of the easiest businesses to start online is an e-commerce business, and Shopify offers small-, mid- and large-sized merchants services that make setting up shop seamless. From website design to marketing, secure payments and shipping, Shopify is an all-in-one vendor helping countless entrepreneurs jump-start growth. SHOP has been in hypergrowth phase itself essentially since inception, taking revenue from $50 million in 2013 to $673 million last year.
PayPal Holdings (PYPL)
What do Tesla (TSLA) CEO Elon Musk, Facebook (FB) investor Peter Thiel and LinkedIn founder Reid Hoffman have in common? Aside from large bank accounts, they were also all important players at PayPal in its infancy, before it sold to eBay (EBAY). Today, PayPal is independent again and bigger than ever, processing $451 billion in total payment volume in 2017. With PayPal’s Venmo, users no longer have to walk their rent checks to the landlord’s office; a simple Venmo transfer will do. PYPL was certainly one of the best stocks to buy in recent years, with shares up more than 120 percent in the last two and a half years.
Roku (ROKU)
Returning to the field of entertainment, streaming TV platform Roku is also emblematic of the stay-at-home economy. And while the vast majority of ROKU revenue comes from selling its eponymous hardware streaming devices, its real goal is to become the leading operating system (OS) of the smart TV. Roku believes all TV advertising will eventually be streamed, and is moving aggressively to be the dominant TV OS so it can reap the benefits. Although growing rapidly — revenue jumped 28 percent in 2017 and active accounts surged 44 percent — it’s still not profitable, and shares are extremely volatile. Essentially, ROKU stock isn’t for the faint of heart.
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10 Stocks to Buy for the Stay-at-Home Economy originally appeared on usnews.com
