NFLX: 3 “Stay at Home” Strong Buy Stocks

There is really only 1 investment story right now: Coronavirus.

We can clearly see the stocks that need to be sold at this time. And that is anything that brings people together. That explains the devastation that has been leveled on airlines, cruises, casinos, restaurants and more firms that rely on congregating in the same space.

Now let’s look at the flip side. The stocks that may actually benefit from expansion of the coronavirus and how it will lead more people to stay at home. These 3 certainly fit the bill: Netflix (NFLX), Peleton (PTON), and Electronic Arts (EA).

However, the real key to this list of stocks is that each is attractive without the threat of the coronavirus in the air. So even if you believe that the coronavirus will soon be under control, then just consider this a list of attractive long term stocks to buy now thanks to the overall market decline.

Read below for details on what makes each of these stocks attractive:

Netflix (NFLX)

2019 was a mixed year for NFLX, and many investors were wondering what 2020 would bring. Every cloud has a silver lining, and for NFLX, it’s the global decrease in movie-going. With more and more people staying home, it’s safe to say that NFLX, along with the entire streaming segment, will enjoy some nice tailwinds.

Earnings are already outperforming the S&P on the year, and we predict NFLX will continue to be an outlier in the increasingly beleaguered tech sector. COVID-19 is beginning to affect people’s everyday habits, as they try to avoid large crowds and possible contagion. Movie theaters are sure to take a hit, and inversely, platforms like Netflix (NFLX) are well-positioned to make gains. Global subscriptions are already outpacing the Street’s predictions, coming in at an additional 8.33 million compared with estimates of 7.17 million. And now with the additional catalyst of the Coronavirus their growth rate will likely accelerate increasing the stream of customers to these shares.

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Peleton (PTON)

Since its IPO, Peloton has experienced some ups and downs. That is common for an IPO as it is hard to meet up to the initial hype. PTON fell over 15% in February and is now down below $25 making now an even better time to add this one to your equity portfolio.

Despite a strong holiday season performance, investors didn’t love the fact that delivery issues are going to bring revenue increases to the midpoint of the guidance range (50%) for the quarter ending in March. However, one must look at the fact that $466 million in annual revenues is nothing to sneeze at; in fact, it represents a 77% increase over the prior fiscal year. The earnings alone are enough to consider PTON a buy, but with the projected trend of more people spending time at home, this one’s a winner.

By the way, I have a Peleton bike at home. For as much as I love the bike, I actually like all the floor based classes better like weights and yoga. The more people understand PTON as being more than a bike, they will see it as a complete gym substitute. And that certainly helps its growth and investor appeal at this time.

Electronic Arts (EA)

Similar to at-home fitness and streaming platforms, video games surge in popularity when people are looking to occupy themselves when spending long periods of time at home. EA is a big winner in that environment.

Electronic Arts (EA) is best known for its sports games, like the Madden and FIFA franchises. But the company isn’t resting on its laurels, as proven by the fairly recent introduction of Apex Legends. This new product, coupled with the live-services channel, is proving to be a good lift. The total percentage of digital sales rose to 77% up from 74% in the prior year.

EA gaming leadership is hopeful that the new products that have experienced a mostly positive reception will help to get this division back on track. All in all, EA continues to expand its output, and make enhancements to its overall user experience, making it a good buy right now.

Want more great stock picks? Then check out these additional resources:

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NFLX shares closed at $368.97 on Friday, down $-3.81 (-1.02%). Year-to-date, NFLX has gained 14.03%, versus a -7.58% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...