ETSY: 3 "Gig-Economy" Stocks That Every Investor Should Know About

The gig economy is now front and center as unemployment approaches 20% and people are quarantined at home. The days of spending an entire career or even several decades at a single company that provides a full salary and benefits are now giving way to the “new economy” in which job-hopping and a reliance on gigs is commonplace.

Etsy, Upwork and Fiverr are worthy of every investor’s attention in light of the economic and societal changes induced by the coronavirus.

Etsy (ETSY)

The days of the traditional brick-and-mortar arts and crafts stores are numbered. These conventional stores as well as the majority of other retail stores are in their dying days. ETSY is here to capture the lost market share.

ETSY empowers everyday people to sell their crafts and other creations to the masses through an easy-to-use online marketplace. ETSY has skyrocketed since the coronavirus pandemic, rising from $31 on Mach 20 to its current price of $79.

The POWR Ratings indicate ETSY is a keeper:

An “A” Trade Grade
An “A” Industry Rank Grade
A “B” Buy & Hold Grade
A “B” Peer Grade
Ranked 16 out of 52 stocks in the Internet category

Do not underestimate the ETSY community. Though artists, crafts specialists and other DIY enthusiasts are not always profit-minded, ETSY has a strong community of participants likely to remain loyal to the platform across the long haul. ETSY just might move toward the analysts’ high price target of $100 in the months to come.

Fiverr (FVRR)

10 STOCKS TO SELL NOW!

If you were to poll those who use the web’s most popular platforms for gig work, most would testify the majority of these platforms are well-designed and provide halfway decent compensation. However, FVRR is not favored by all workers, largely because of its less-than-stellar compensation and somewhat clunky user experience design.

Though flawed, FVRR excels in what matters most: making money. FVRR aces the POWR Ratings test with As in all POWR Component categories but for its Buy & Hold Grade in which it has a B. FVRR is well on its way to entering the black thanks to the coronavirus pandemic that rendered just about everyone sequestered indoors, looking for ways to make money from home.

FVRR skims a considerable portion off the top of each short-term contract, attracting that many more employers while providing steady work to those in need of a job. The typical buyer averaged more than $150 spent on FVRR’s platform across the past year. This is a meaningful figure as some FVRR gigs are priced at a mere $5 to $10.

If FVRR pulls back from its 52-week high of $66 and change, it might make a good long-term addition to your portfolio.

Upwork (UPWK)

Put yourself in the position of a business owner or CEO. You need a flexible workforce yet you would prefer to avoid the egregiously large cost of employee health insurance, paid time off, retirement contributions and other benefits. The solution to this quandary is to hire gig workers through UPWK and similar platforms.

UPWK has a fleet of freelance writers, web designers and other specialists who work on a contract basis. The company’s stock soared from $6 to its current price of $12 amidst the coronavirus pandemic. However, the stock has not moved all the way back to its previous trading range of $16 to $18 from last summer.

The POWR Ratings have UPWK ranked in the top half of all stocks in the Internet – Services space (#15 of 34), largely because its Industry Rank POWR Component has a B rating. UPWK changed its business model last summer, shifting to a “pay-to-work” model in which workers pay to apply for job listings. The approach has worked particularly well amidst the quarantine as upwards of 30+ people have applied for a single job posting.

Furthermore, UPWK takes a cut from each completed project, meaning the company “double dips” revenue from both its freelancers as well as its clients. This is the type of stock you “buy and forget about”, holding it for years, if not decades into the future.

Want More Great Investing Ideas?

9 “BUY THE DIP” Growth Stocks for 2020

What If I Am Wrong About the Bear Market? Even stubborn bears need to contemplate why the market continues to rally above 3,000.

7 “Safe-Haven” Dividend Stocks for Turbulent Times

ETSY shares rose $0.41 (+0.52%) in premarket trading Tuesday. Year-to-date, ETSY has gained 78.58%, versus a -3.99% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...