Investors flock to Netflix and other ‘stay at home’ lifestyle stocks
Coronavirus has sent shockwaves across global stockmarkets, but there are select companies that are booming as a result of people adjusting to life on lockdown.
Popularity of ‘stay at home’ lifestyle stocks has surged and analysis of The Share Centre’s trading data reveals Netflix has seen a nine-fold increase in purchase activity compared to this time last year.
Video communication company Zoom has seen a 550% increase in purchase activity, while grocery delivery firm Ocado has seen a 336% increase.
Amazon has seen a 200% increase in buying activity with Microsoft at 143%, ahead of Facebook’s 43% rise.
Stay at home’ businesses emerge as winners of the coronavirus crisis
The investment platform said with consumer spending on these companies likely to be increasing, many are looking to match this pattern with their investment strategy.
This is a common strategy among investors and it can prove lucrative as these ‘stay at home’ stocks have enjoyed considerable returns over the period.
Zoom investors have witnessed total returns of 80.7%, while Netflix (17.4%), Amazon (8.1%), Ocado (5.9%) and Microsoft (5%) have all enjoyed growth.
Joe Healey, investment research analyst at The Share Centre said: “Matching your investment strategy with your spending habits can be a sensible approach and sticking to companies you’re familiar with, and you know are performing well, makes a lot of sense in times of uncertainty.
“‘Stay at home’ businesses are fast emerging as the winners of the coronavirus crisis and are acting as a strong addition for many investors’ portfolios as a result.”
However, Healey added that as with all investment decisions, investors should have a long-term outlook.
“The lockdown will eventually lift so investors should consider whether this is a company that will continue to deliver returns. The flurry of interest in these stocks does also leave them at risk of becoming over-valued, so investors should avoid getting caught up in any excitement and objectively consider the price before purchasing.”