6 winners in the post-covid World

The COVID-19 pandemic has had a devastating impact on the global economy. Many traditional businesses have been struggling, some faced insolvency. However, each shock causes change and changes creates winners. While the period of lockdowns ends, the covid could change the way we live. Suddenly we have discovered that so many things could be done at home: shopping, working, relaxing and ordering food. There are businesses that benefit from this change. In this report we present you 6 winners of the post-covid World.  

Amazon

Amazon (AMZN.US) is one of the best known retailers in the world. Heavy focus on e-commerce proved to be a key to surviving Covid-19 pandemic. In fact, not only surviving but thriving during it! Lockdowns inflated e-commerce volumes significantly and encouraged people who were not too keen on technology to give it a try as well. Consumer base increased and it is unlikely to shrink back to pre-crisis levels once lockdowns are lifted. Why? Because shopping online is simple and convenient. Moreover, some customers will remain reluctant to shop in brick-and-mortar stores for some time after pandemic recedes. Apart from that, Amazon is branching out into a popular cloud computing segment through its AWS subsidiary. Demand for cloud services increased as more people work from home and the way in which companies make business and operate will likely go into that direction in post-Covid world. This could prove to be an important sort of diversification into the future, especially as it is a business with higher margins than e-commerce.

Amazon (AMZN.US) realized the range of a breakout from an inverse head and shoulders pattern painted during coronavirus panic. Stock reached new all-time highs later on but pulled back a bit recently. Source: xStation5

Visa

Need for physical cash greatly decreased during the coronavirus pandemic. Not only people were shopping less but they were also advised by authorities to refrain from using it and use, for example, tap-to-pay methods. Visa (V.US) recorded a 40% increase in tap-to-pay transactions in Q1 2020! Needless to say increased interest in e-commerce is also boosting transaction volumes for payments companies and helps cushion blow from lower spending on travel and entertainment. In general, the coronavirus pandemic accelerated the shift towards cashless payments and this is exactly what payments companies needed. Once pandemic recedes, spending eventually returns to normal and payments companies like Visa will have a better business outlook than they did before the pandemic.

Visa (V.US) is trading near an important resistance zone ranging around $195 handle. The stock failed to break above it yesterday but remains close. Source: xStation5

Zoom Communications

Forcing office workers to work from home did not relieve them from a duty of holding countless meetings and calls on a daily basis. While a regular phone call may be enough if you need to contact a single person, speaking to 10 or 20 people at once is quite challenging. Demand for Zoom Communications (ZM.US) software, that allows to hold regular calls as well as video calls with a large group of people, skyrocketed as coronavirus lockdowns became a thing. Such software also became a kind of a lifeline for entities that need their "customers" to be grouped together when delivering services - schools and universities. Education institutions all around the world started to host classes and lectures online in order to bypass bans on gatherings. Feedback is positive and some universities consider holding at least part of classes online after pandemic recedes. Discussion is especially vivid in countries where students have to pay college tuition to receive higher education as holding more classes online could help lower overall education cost. Whatever direction education takes, some big companies like Twitter or Facebook already announced they will allow employees to work from home after a pandemic and it should keep communications software in demand.

Zoom Communications (ZM.US) pulled back towards the upward trendline recently. The stock painted a bullish pin bar pattern there hinting that buyers may be readying for another upward impulse. Source: xStation5

Activision Blizzard

Lockdowns in many developed countries triggered an increase in video game spending. This should not come as a surprise as it seems to be a perfect way to kill time once you are waiting for the country to reopen. Developers like Activision Blizzard (ATVI.US) experienced a jump in sales and earnings in Q1 2020 while most of the other sectors saw significant business deterioration. But will this video game developer bonanza last once we find a cure for Covid-19?  There are factors that support this view. One of them is the fact that people are likely to spend more time at home after a pandemic than they did before the coronavirus outbreak and it should encourage playing video games. However, there is another factor that seems to be equally as important if not more - new Xbox and PlayStation consoles will premiere in late-2020. Launch of a new generation of consoles often sees a jump in video game spending as gamers switch to new consoles and need to purchase new games as well. Timing of release of consoles isn't accidental as fall is usually a period of the year with the biggest amount of new game releases and those are already developed to be playable on new consoles as well. 

Activision Blizzard (ATVI.US) dipped below the descending triangle pattern. However, stock found support at a price zone ranging around $68 handle and managed to recover slightly. Source: xStation5

Netflix

Netflix (NFLX.US) is a name a lot of us will associate with coronavirus pandemic for a long time and data confirms it - Netflix added almost 15.8 million new paid subscribers in Q1 2020 alone, bringing a total to 183 million! Nevertheless, Netflix experienced some setbacks due to Covid-19 pandemic as movie and series production had to be postponed in many countries. Moreover, the company warned that some of its new subscribers will likely terminate subscription once things start to return to normal. However, as lockdowns are being lifted, production resumes and new content will start to arrive on streaming platforms. This will be an opportunity for Netflix and others to reinforce their grip on newly acquired subscribers. Lockdowns allowed many less tech-savvy customers to sample online content and perhaps the company will be able to gain permanently at the expense of the cinema industry.  

Netflix (NFLX.US) surged around 60% after bottoming out in mid-March. Share price launched a downward move recently but reaction to the lower limit of the Overbalance structure occurred and rebound may be one the cards now. Source: xStation5

Domino's Pizza

Coronavirus lockdowns and social distancing rules caught many restaurants off guard. While many of them had food delivery services already in place, a bulk of their revenue came from on-site dining. Domino's Pizza (DPZ.US) can be seen as an exception as this restaurant chain was heavily focused on delivery even before pandemic hit the world. According to company executives, at the worst single moment of the pandemic just 22% of its international outlets were closed. This is really an achievement given havoc that lockdowns have caused to the restaurant industry all around the world. Domino's has been growing rapidly in recent years and proving ability to serve customers during crisis situations has surely strengthened brand recognition. The company even had to hire thousands of additional workers to serve increased orders volume! Approach Domino's has taken years ago is now paying off more than ever and increased interest in take-away dining is expected to be one of new consumer trends that will prevail after pandemic.

Domino's Pizza (DPZ.US) also managed to recover above pre-crisis levels. However, the stock failed to make a longer-lasting break and started to trade sideways near the price zone ranging around $378 handle. Source: xStation5