The coronavirus pandemic has made life difficult for businesses that rely on store traffic and those that sell products and services that are not considered essential. But that is not the case for the three actions listed below, which have benefited from strong demand during the pandemic. They have proven resilient during these tough times and are good buys not only during the pandemic, but in the long run as well.
1. Viemed Healthcare
Viemed Healthcare (NASDAQ: VMD) It is a company that sells fans, so it is not surprising that it has shot up this year, more than 50% so far this year S&P 500 it has fallen 4%. There is a concern that there are not enough ventilators to help COVID-19 patients. And with coronavirus cases continuing to rise, to more than 2.7 million in the U.S. alone, the need for ventilators is only going to increase.
In its first quarter of 2020, the results of which the company released on May 4, Viemed’s net income increased 31% year-over-year to $ 23.8 million. Viemed estimates that $ 1 million in product sales was related to the coronavirus pandemic.
Image source: Getty Images.
That’s an improvement from the fourth quarter, when Viemed’s sales grew 17% more modestly from $ 18.4 million in the same period last year to $ 21.4 million.
The numbers will only get stronger in future periods, as Viemed’s first-quarter results only represented business until the end of March 31, when the pandemic in the US was still in its early stages. Demand for ventilators and respiratory products and services will only increase in the second quarter. And even now, in July, which would be during the company’s third quarter, the pandemic is not yet close.
In addition to strong sales growth, the Louisiana-based business has also been profitable in each of its last four quarters. Other than the actions taken this year, there is little reason to doubt that it can continue to rise.
2. Wayfair
Wayfair (NYSE: W) It is doing even better than Viemed, as its stocks increased about 120% this year. The e-commerce company, which sells furniture and many household items online, is well equipped to handle an economy in which consumers stay indoors and shop online. Without a reliance on in-store purchases, Wayfair has not missed a beat so far in 2020.
The Massachusetts-based company released its first-quarter results on May 5, posting growth in net income that was a solid 20% over the same period last year. It reported 21.1 million active customers during the period, which was also a 29% year-over-year increase. That was also higher than the 20.3 million active customers in the fourth quarter.
Wayfair still expects solid results to continue in the second quarter. In the company’s first quarter earnings call, CEO Niraj Shah attributed the stimulus payments from the US economy to the strong demand that Wayfair has been seeing during the pandemic. He stated that “the deployment of stimulus funds in mid-April served as an additional accelerator for the arrival of new and repeat customers to Wayfair. As a result, we have seen gross sales momentum increase in almost all classes of platform products. mobile and desktop and in all regions of the US, Canada, the UK and Germany. “
The one thing investors may be a little less excited about is the bottom line for the company: In each of the past four quarters, Wayfair posted a net loss.
But that hasn’t deterred investors so far, and it probably won’t as long as Wayfair can continue to grow at this impressive rate. Long-term investors will want to stay tuned to see Wayfair improve in future periods, but lack of profitability shouldn’t be a big concern right now. After all, with a strong share price, Wayfair can issue more shares to improve its financial position if necessary.
3. Zoom
Zoom Video Communications (NASDAQ: ZM) the stock has been red hot since the pandemic began. It has increased more than 270% so far in 2020 as social distancing in requests to stay home has made video conferencing more popular than ever. And what makes Zoom so popular is its simplicity, as users can receive a link and be ready to video chat in seconds with colleagues, friends, or family.
The California-based company reported revenue of $ 328.2 million in its first-quarter 2021 results, which Zoom released on June 2. That was a 169% year-over-year improvement on its top line. But Zoom still sees that growth continue, projecting second-quarter sales to hit $ 500 million.
The company is also seeing an increase in customers, not just free users. A key measure that Zoom tracks is the number of customers who have contributed more than $ 100,000 in sales in the past 12 months. And in the first quarter, there were 769 customers who fell into that category, an increase of 90% over the prior year period.
Unlike Wayfair, Zoom has been able to post gains amid impressive growth. In the first quarter, Zoom’s net income exceeded $ 27 million, which was a significant improvement over the previous year when it only generated a profit of $ 198,000.
Which stock is the best of the three?
All three stocks are attractive buys amid the coronavirus pandemic, and here’s a look at how everyone has done this year:
VMD data by YCharts
Everyone has done incredibly well, but the stock I’d go with is Viemed.
Earnings from the health care stock have been a bit more modest so far, and as COVID-19 cases continue to rise in many states, the demand for Viemed’s products will only increase. Zoom can see demand decrease as cities reopen and there is less need for video conferencing, and its actions are also close to their all-time highs; Zoom stocks may have less room to grow than Viemed. And while Wayfair is benefiting from the stimulus money, if that starts to run out or consumers refocus their priorities during the recession, you can also see that demand for their products is reeling. That is why the safest of the three stocks listed above to buy right now is Viemed.
