The COVID-19 pandemic has wreaked havoc on the global economy. The future of many hard-hit businesses remains highly uncertain. While stocks as a whole could crumble depending on what happens next with this pandemic, there are a few resilient companies out there that have shown immunity to the COVID-19 pressures that have plagued this market.
Shopify recently snatched the title of Canada’s most valuable company away from Royal Bank of Canada amid the coronavirus pandemic, as the stock skyrocketed to new heights on “Black Friday-like traffic” and a stellar first-quarter earnings beat.
Indeed, the Canadian e-commerce kingpin gave many ailing small- and medium-sized businesses (SMBs) a lifeline amid the coronavirus crisis. Shopify’s value-adding platform was seen as a last shot at survival for many SMBs, as COVID-19-induced shutdowns sent their revenues falling off a cliff.
As a result, the insidious COVID-19 acted as a subscriber growth catalyst for Shopify, as it did its part to help SMBs (many of which were flirting with the brink) rake in enough to keep the lights on. With shares at $1,050, Shopify stock is undoubtedly one of the most expensive stocks on the planet at just over 48 times sales.
The company recently defied expectations in the first quarter, clocking in a positive EPS of $0.19 when the street was expecting a loss of $0.18. And while shares of Shopify seem unstoppable, I’d urge investors to consider nibbling into a position rather than initiating a full position given more than just perfection is baked into the share price.
Goodfood Market is another firm that experienced a rise in demand for its services during the coronavirus pandemic. The meal-kit delivery company initially sold-off on the coronavirus crash but came rocketing back, more than doubling in a few weeks on the bear market bounce.
In many prior pieces, I’d pounded the table of Goodfood stock, noting of the stock’s severe undervaluation and the fact that the service it provided was essential in helping self-isolating Canadians bend the curve.
“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.” I wrote.
“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 with the markets crumbling like a paper bag.”
With FOOD shares now up around 160% from their March bottoms, you’d think the stock would be ridiculously expensive like a Shopify, but that’s simply not the case with shares trading at a mere 1.2 times sales. So, if you’re looking for deep value and resilience in the face of COVID-19, look no further than Goodfood.
Stay hungry. Stay Foolish.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Joey Frenette has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool recommends Goodfood Market.