A Virtual Investment Stint Around the World
It has been established so far, that in tough times like this, innovative and unconventional ideas flourish the most. So let's take a virtual trip around the globe and see what’s picking up despite the lockdowns and economic meltdown. (PS. you need not wear hand gloves or face mask to make this trip).
The drill: We are going to talk about 5 companies which have invested years into developing something out of the box and have witnessed a huge spike in demand ever since the virus hit the globe. Let’s say we were fortunate enough to identify these stocks a couple of months ago and invested an equal sum of money in each. How much do you think would be the value of your portfolio today?
1. Peleton Fitness
We talked about Peleton Fitness in our January issue, which has redefined community fitness by letting people virtually do all the exercises right from their bedroom. Fitness geeks who made daily rounds to the gym were laughing at this concept back then. Since 19th February’20, share price of Peleton has appreciated from $27.10 to $33.49, which is a 23% rise in just 2 month. Guess who’s laughing now?
“Netflix and chill” is probably the only comforting factor for millennials as the world goes into a lockdown. Given the slightly elevated churn levels during the coronavirus period, the company has forecasted addition of about 7 million users during the March quarter. Experts expect even more. Although the company’s production business is on halt, it claims that it has enough new content for the next few months.
Shares of Netflix appreciated by 9% in the past 2 month.
Today, you will probably find Zoom Videos Application in every person’s smartphone, be it a student, or an office goer or a homemaker. Zoom’s daily active users jumped from 10 million to over 200 million in just 3 months, ever since the breakout of the virus.
Flashback: Zoom Video Communications Inc., based out of San Jose, California, USA, was founded in 2011. Its valuation crossed the billion-dollar mark in 2017, and it went public exactly a year ago on 19th April’19, with a valuation of over $16 Billion by the end of its first day of trading.
The Big Picture: Since 19th February’20, share price of Zoom has zoomed by a whopping 44%.
As the working class tries to keep the fire burning by working from home, one may resort to server, application and desktop virtualization, networking, and cloud computing technologies provided by Citrix Systems Inc. Remote work facilities are the next alternative to flexible lease and private areas in co working spaces.
The result? Over the last 2 months Citrix has quadrupled its user base and its share price elevated by 23%.
5. Activision Blizard
Data from Nielsen shows that people do indeed turn to the box (television) in crisis. And among all the alternatives, data shows that video gaming has risen by at least 34% ever since the virus took over the world. One name strikes when we speak of video games – Activision Blizard Inc. Activision’s masterpiece - Call of Duty Mobile Game, which has lready smashed records, has helped the company add another 4% to its share price in the past 2 month (Don’t worry, you still beat the market).
And here’s the appreciation in the value of your equally weighted portfolio over the last 2 months:
I know what your next question is. How much did the broader market indices appreciate over the same period? Or should we say depreciate!