The stock market is up and running right now. The S&P 500 market index gained 24% in three months as 480 of its 505 tickers posted positive returns during the same period. Now, mounting COVID-19 infections could blow Wall Street candles at any time, and I don’t expect the good times to last much longer. Many of the rising stocks recently will return to earth quickly if that happens.
Image source: Getty Images.
But some companies performed really well in the slowdown of the previous coronavirus and are poised to keep winning in the next market panic. Amazon.com (NASDAQ: AMZN) and PayPal Holdings (NASDAQ: PYPL) They’ve been crushing the market all year, and they both look like fantastic purchases today, with or without another game-changing health crisis.
The store
These two actions are direct games in the e-commerce sector that skyrockets. The smiling Amazon logo is virtually synonymous with “online retail,” and the industry as a whole has been crushing traditional department stores and shopping malls for a couple of decades. The coronavirus crisis only accelerated a clear market trend in 2020.
Mall stores like Macy’s (NYSE: M) and Gap (NYSE: GPS) They saw their quarterly sales drop more than 40% year-over-year in their most recent earnings reports. At the same time, Amazon’s revenue increased 26%.
YCharts AMZN (quarterly growth) revenue data
Amazon management expects another highly successful revenue reading in the second quarter, scheduled for the end of July. However, windfall will not generate a ton of net profit. The company promised to invest $ 4 billion in efforts to fight coronavirus in the second quarter.
In a prepared statement, CEO Jeff Bezos said:
This includes investments in personal protective equipment, improved cleaning of our facilities, less efficient process routes that allow effective social distancing, higher hourly equipment wages, and hundreds of millions to develop our own COVID-19 testing capabilities.
Bezos added: “I am confident that our long-term oriented shareholders will understand and adopt our approach, and that in fact they would not expect less.”
Amazon shares have gained 2.550% in the past decade, including a 56% increase in 2020 alone, but Jeff Bezos is unwilling to make a quick buck. He is busy building a trading empire for ages. This is a stock I don’t mind buying at all-time highs, possibly on the brink of another drastic market crash.
The money manager
The digital payment processor PayPal follows in Amazon’s footsteps in many ways. Both companies have close ties to the world of online shopping; both are highly effective ATMs; And both have been incredibly strong investments in both the long term and 2020 alone. Here’s how the $ 10,000 investments in Amazon and PayPal have increased in value since PayPal’s IPO in 2015. An equal-size investment is included in the S&P 500 to give you an idea of scale:
AMZN data by YCharts
The world is waking up to online shopping in a big way, driving PayPal’s growth path through the roof. CEO Dan Schulman described April as “probably the strongest month for PayPal since we became a public company.”
The simple and secure online transactions offered by the eponymous PayPal service and the Venmo tool are here to stay. The company is also driving its growth abroad by allowing Venmo to work as a basic consumer bank in areas of the world where credit cards and checking accounts are hard to find.
Yes, PayPal is operating at all-time highs right now. No, I don’t mind paying a premium for a well-run company that would only benefit from another major COVID-19 collapse. PayPal is a strong purchase.
