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Anonymous

26 Mar 2020

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What sectors and companies are the outliers in this COVID-19 bear market?

Some industry sectors would see a shift in emphasis and experience a less steep drop vs the rest of the index

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And from 19/02/2020 (= max):

Healthcare and Defence stocks maybe are going up on a short term view. A lot of biotechs are not longterm viable, as many development products ultimately fail. Trends as working from home on the other hand possibly get a longterm boost in the aftermath of this C-wave.​​​

Kenneth Lou

17 Mar 2020

Co-founder at Seedly

During this volatile COVID-19 period, I have been reading up alot of different reports from consulting companies (eg PwC, Bain, KPMG and others). Across them, I have found a commonality which is surrounding trends which will pick up over time.
Overall in the long term, such dramatic disruptions accelerate the changes in lifestyles and new companies are born out of crisis to take advantage of these shifts in consumer behavior.

Here are some findings when it comes to sectors who are CLEAR OUTLIERS.

Broadly these companies fall into 4 broad sectors:

  1. Lifestyle services accessible at home

  2. Services which facilitate working remotely (work from home)

  3. Healthcare (obviously)

  4. Security and Defence

Here's the deeper analysis on these sectors and companies:

The companies mentioned are examples which were cited which basically did not fair as badly as the overall S&P500 index which has been tanking in the last few weeks.

Basically these comapnies are outperforming the index, but should not be used as an indicative measure for you to invest or not. They are unique examples of companies getting through this period.

1) Lifestyle services accessible at home

  • Social distancing increases demand for setivces from home such as entertainment, food

  • Prior to the whole COVID-19 scare, this was already a trend which was taking up speed, but this has just accelerated the whole narrative

  • Entertainment: NETFLIX (NASDAQ: NFLX)

  • Food: DOMINOS (NYSE: DPZ),

  • Groceries: KROGER (NYSE: KR)

2) Services which facilitate working remotely (work from home)

  • Directives are being sent out by Health ministries across the world to go into lock down

  • As offices and schools close down, there is an increasing need to work or study from home

  • Conferencing Tools: ZOOM (NASDAQ: ZM), ALPHABET (NASDAQ: GOOGL)

  • SaaS companies: DOCUSIGN (NASDAQ: DOCU)

3) Healthcare solutions

  • This is pretty obvious but there are some interesting companies here

  • From support solutions to innovative and higher tech vaccine research companies

  • Vaccine companies: MODERNA Inc (NASDAQ: MRNA)

4) Security and Defence

  • Fear and uncertainty increase demands for services which enable security and defence operations

  • Defence companies: Leidos NYSE: LDOS

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