Canada’s “stay-at-home” stocks ought to be strongly considered by investors seeking to limit their downside amid these dark times.
Many investors saw their portfolios take a hit to the chin over the last month and a half. While it feels “too late” to prepare for a downturn after the TSX Index has already fallen over 30% from peak to trough, I’d argue that it’s never too late to be prepared. Bear markets tend to be measured in months, not weeks. So, investors need to brace themselves, so they’re not left in an even rougher spot in a worst-case scenario.
Consider the following Canadian stocks that I see fit for the rise of the “stay-at-home” economy — a trend that I believe will be sticking around far after the pandemic and social-distancing practices are gone. Moreover, it’s these such stocks that I see having minimal downside, as the insidious coronavirus continues its exponential spread across North America.
There are great uncertainties in the market right now, so the following “stay-at-home” stock ought to be seen as a glimmer of certainty in a dark market that’s clouded in a haze of uncertainty.
A stay-at-home stock to play the long-lived trend
Without further ado, consider buying GoodFood Market (TSX: FOOD) if you find your portfolio is overweight cyclicals and is falling harder than that of the TSX Index.
The Canadian meal kit company is gearing up to pull the curtain on its latest round of earnings (second quarter fiscal 2020) next week on the morning of April 8.
In a pandemic, when some see a venture to the crowded grocery store as a horrifying experience, meal kit delivery services suddenly become the best thing since sliced bread.
Sure, meal kits are ridiculously expensive relative to a trip to the local grocery store. And while the premium for the convenience is up for debate, I’m sure nobody would argue that the convenience and added safety during a pandemic is more than worth the price.
The “stay-at-home” stock is more than just a pandemic-resilient play
Right now, meal kits aren’t only a convenience. GoodFood now provides a vital service to those in self-isolation to help slow the spread of the insidious COVID-19. The pandemic could have the potential to last many months, and over this time, GoodFood is likely to ramp up to serve a record number of subscribers from across the nation.
Come earnings time, GoodFood is likely to reveal an unprecedented number of new subscribers. And I think the stock could stand to surge, even as the markets crumbling like a paper bag.
But please don’t see GoodFood as some sort of “pandemic trade” to make yourself a quick buck. I see GoodFood as a long-term investment that can help your portfolio weather these tough times while playing a significant role in assisting self-isolating Canadians minimize their chances of contracting the deadly COVID-19.
Foolish takeaway
Now, GoodFood isn’t just a play to protect your portfolio in a pandemic; it’s a well-run firm that’s riding on long-lived convenience tailwinds.
Millennial consumers are all about convenience, and as GoodFood takes steps to improve its margins while simultaneously striving to provide a better value proposition for its customers, I see the Canadian meal-kit king as a big winner for years to come.
Stay hungry. Stay Foolish. And if you can help it, stay at home.
