Yahoo Finance Amazon, Kogan: 7 stocks that shine during lockdowns
The ongoing lockdowns across the nation have wreaked significant damage on the economy all the way down to Australians’ wallets.
But one of the few upsides is that certain companies are actually etching a trajectory of growth, even as broader economic activity slows across half the country.
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Here are seven global and Australian stocks that experts have revealed are on the rise during lockdown:
Amazon (NASDAQ:AMZN)
Online retailers have been major beneficiaries of the lockdowns, with 9 million Aussies buying something online last year, an increase of 57 per cent.
eCommerce giant Amazon has been a particular winner, and in December hit quarterly revenue of US$125 billion for the first time, said eToro market analyst Josh Gilbert.
“As a global leader in eCommerce, Amazon will always benefit from any imposed lockdown restrictions, particularly if the Delta variant continues to cause further lockdowns in the US and across Australia,” he told Yahoo Finance.
Its cloud service platform Amazon Web Services (AWS) has also seen a boom as a result of businesses wanting to digitise their work platforms amid the remote work trend.
“While Amazon dominates the space, there is still room for growth for the company, especially as its profits continue to climb quarter-over-quarter,” said Gilbert.
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Pinterest (NYSE: PINS)
People have spent more time online assembling online mood boards, hunting for recipes, planning their next holiday or a home renovation, said Gilbert.
“Over the past year, Pinterest has seen its stock price soar by around 216 per cent. In the first quarter of 2021 alone, the company’s revenues rose by 78 per cent year-over-year,” he added.
The company is expected to get more attention from bigger brands with bigger budgets, which will see its revenue rise further, he said.
Home Depot (NYSE:HD)
Australian investors are looking for a way to benefit from this Atlanta-headquartered company’s growth, according to the market analyst, as people take up DIY projects during lockdown.
“As one of the retailers deemed as an ‘essential’, Home Depot wasn’t affected by government-enforced closures, meaning it was able to still turn a significant profit from its physical stores, as well as via eCommerce,” said Gilbert.
The home improvement retailer’s share price has risen by 118 per cent since March 2020 and has seen revenue increase by 23 per cent year-on-year, he added.
“As spending in the US on home improvements and repairs is expected to continue to increase, the future's looking bright for Home Depot.”
Kogan (ASX:KGN)
Closer to home, Motley Fool chief investment officer Scott Phillips said while it’s difficult to accurately predict short-term movements, savvy investors can look at company shares that look cheap right now and tend to do well when life returns to normal post-lockdown.
“[Kogan] got whacked when the vaccine was announced and whacked again when it was left with too much inventory. But it's worked through that problem, and is growing nicely,” Phillips told Yahoo Finance.
“I own shares, for the record, and expect them to be long term winners.”
Brickworks (ASX:BKW)
This building products manufacturer has been flourishing as people take up home DIY projects. In the last six months, this company’s share price has risen by nearly 36 per cent.
“Construction will resume at some point in half of the country, and when it does, this brickmaker should benefit,” Phillips said.
Brickworks also has a cross-shareholding relationship with US investment firm Washington H. Soul Pattinson, which means both companies hold shares in each other.
“[This gives] it what I think is a 'heads I win, tails I don't lose' flavour, over the long term,” Phillips added.
Adairs (ASX:ADH)
This home furnishings retailer is also enjoying the online shopping boom, with a third of company sales coming from their online platform.
“And those sales are growing quickly. Lockdowns will send some of us back online, and Adairs stands to benefit – perhaps more than some, given its products have a shorter life cycle than some home furnishings and electronics,” said Phillips.
The company has medium- and long-term growth potential, he added.
While this isn’t a single stock per se, BetaShares chief economist David Bassanese said this ETF gives investors exposure to some of Australia’s top Australian companies, like Xero, Afterpay, carsales.com, and more.
"Market behaviour over the past year has demonstrated that investors tend to gravitate toward technology stocks when COVID related fears escalate,” he told Yahoo Finance.
“This reflects two factors: economic fears tend to lower interest rates which favours growth companies, and technology companies especially benefit from a move toward more online activity.
“In a way, online technology companies today are the 'new defensives' in an era where lockdowns are the biggest economic risk.”
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