Tuesday, March 17, 2020
All this month, we’ve been showing you how to navigate the brutal volatility of this market:
Along the way, we’ve been clear: the overall market is likely to get worse before it gets better.
But even with the market getting clobbered, individual stocks can still generate big profits.
Here’s a reminder why — and then I’ll share five opportunities worth your immediate consideration.
Major Crisis, Major Opportunities
Even when it feels like the world is falling apart, life and business continue.
And for a certain set of companies, business booms. For example, look at Lakeland Industries (LAKE), a maker of protective equipment for medical professionals…
During the 2014 Ebola crisis, demand for its products surged — and its stock rallied nearly 600%!
My point? If we’re looking for profit opportunities as the coronavirus situation unfolds, we need to identify companies that will enjoy the biggest boosts in demand.
And that’s easy to do, too. Yes, I said “easy.” Let me explain.
First In, First Out
China locked down cities weeks before other countries.
That means we have an early detection system for forecasting demand spikes.
You see, whatever the Chinese did during the lockdown is exactly what the Americans are about to do.
With that in mind, here are several profit opportunities to consider…
And remember, these opportunities are based on actual data from what transpired in China.
Coronavirus Boost #1: In-Home Entertainment
Out-of-home entertainment like concerts and sporting events are all but non-existent now…
So look for in-home entertainment companies to enjoy a boost — especially video-game companies.
As you might expect, extra time at home leads to extra game playing. What you might not expect is how much. Thankfully, we have fresh evidence:
Tomorrow, China’s Tencent is expected to report its fastest sales growth in a year. Why?
Because the social media giant added millions of new gamers during the virus lockdown.
With that in mind — and with the U.S. just starting to get locked down — we expect a demand surge for products from Activision Blizzard (ATVI), Electronic Arts (EA) and Take-Two Interactive (TTWO).
Coronavirus Boost #2: Digital Workforce
Just like entertainment has moved into the home, so has work.
With more and more employees working remotely, keeping them connected becomes a top priority.
And once again, the latest data out of China proves it.
As you can see in the chart below, downloads for remote work apps surged as the crisis started, and have remained elevated ever since.
Based on this data, we believe video-conferencing pure-play ZOOM Technologies (ZM) and messaging company Slack Technologies (WORK) will enjoy significant increases in demand.
Tip of the Iceberg
The thing is, the picks I shared with you today are just the tip of the iceberg.
To make the biggest gains, there’s another investment strategy you should be following.
And tomorrow, Matt will show you exactly how to get access to it.
Ahead of the tape,
Ahead of the tape,