The coronavirus pandemic rages on. Travel restrictions remain tight. Rolling closures continually shut down businesses, schools, and public places.
It doesn’t seem like many expect a quick reversal. A recent poll showed that 85% of Canadians prefer the U.S. border to remain closed through the end of the year.
When will the crisis subside? No one knows.
Regardless of what our future looks like, many stocks are still poised to succeed. In fact, some stocks could actually grow in value, even if the COVID-19 situation worsens.
Here’s where to look
People are stuck in their homes. Physical storefronts remain shuttered. Even areas that are reopening are seeing significantly less foot traffic.
Importantly, consumption overall isn’t down. Consumers are still consuming, just in different places.
Consider Air Canada. The stock is still down 70% from its former highs. Many analysts wonder if the company will eventually go bankrupt. After losing $1 billion last quarter, the clock is ticking. Executives recently revealed that passenger traffic has fallen by 95%!
Some airlines, however, are thriving during the coronavirus pandemic. Just look at Cargojet. Sales and profits are surging to new all-time highs. So is the stock price. But this airline doesn’t transport passengers. Instead, it ships packages.
Retail spending may be down, but the vast majority of that impact has been felt by physical retailers. Online retailers, meanwhile, have seen demand spike since the coronavirus crisis first began. All of those online orders need to be shipped an delivered to the customer. Cargojet is a direct beneficiary.
If you want to win in today’s market, you must find stocks that can capitalize on the new normal.
The best coronavirus stock
If you want to grow your money, Shopify (TSX:SHOP)(NYSE:SHOP) stock is your best bet. It’s a driving force behind the new normal.
For decades, big brands like Procter & Gamble Co controlled supermarket shelves. They had the money to support huge advertising budgets and the influence to pressure stores to sell their products. Shopify has turned this reality upside-down.
Anyone anywhere can set up a Shopify site in minutes. You could generate your first order within hours, spending as little as $1 on ads to acquire customers. No longer does one need their own factories, workforces, or marketing specialists. All of that is now automated, deployable at the push of a button.
The important thing is that Shopify includes all of these tools by default for its users. It’s incredibly simple to start selling online, disintermediating the traditional retail power structure.
If the coronavirus continues for months, or even years, large portions of spending will permanently shift to digital storefronts. Shopify will capture the bulk of that new value.
Yes, shares are expensive, trading at 61 times sales. But that’s the price you pay for a company that can thrive in one of the most difficult operating environments of the last century. Your best bet is to find a smaller stock that can replicate Shopify’s incredible rise. But sticking with the original should also prove a worthy bet.
