MKM suggests ‘stay at home’ stocks like Peloton, Netflix vs coronavirus

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Activision Blizzard’s “Call of Duty: Mobile” displayed on a smartphone.

Ryan Browne | CNBC

Shares of technology companies that serve consumers at home could come out as a winner amid fears of a coronavirus outbreak in the United States.

Netflix, Facebook, Amazon, Peloton, Slack and Zoom are among a handful of companies that MKM Partners identified could rise despite the broader market sell-off.

“We tried to identify what products/services/companies would potentially benefit in a world of quarantined individuals. What would people do if stuck inside all day?,” JC O’Hara of MKM Partners said in a note.

The firm’s recommendations are already being borne out by investors. Shares of Peloton, which sells stationary bikes for at-home workouts, are up more than 14% this week, while the S&P 500 is down around 9%, on pace for its worst week since the financial crisis in Oct. 2008. Netflix is up nearly 2% as of mid-day Thursday, while the S&P is down almost 2% . Shares of videoconferencing software company Zoom are also up more than 5% for the day so far as companies increasingly have looked to move in-person meetings to the virtual world.

U.S. stocks have been plunging this week on renewed fears that the coronavirus, COVID-19, will slow global economic growth and spread throughout the United States. The Centers for Disease Control and Prevention on Wednesday confirmed the first U.S. coronavirus case of unknown origin in Northern California, indicating possible “community spread” of the disease.

Shares of companies that promote travel, such as Uber or Boeing, or that heavily rely on Chinese manufacturing plants, like Apple, have been seen impacts from outbreak. That’s to be expected, O’Hara said.

“There are obvious areas in the market where carnage continues to run rampant,” O’Hara said. “Rather than attempting to forecast how much lower these stocks may go, we decided to explore which stocks may hold up better in the face of COVID-19.”

Here’s MKM’s “Stay at Home” index:

  • Activision Blizzard
  • Netflix
  • Tencent Music
  • Zynga
  • Facebook
  • Match
  • Yelp
  • Zillow
  • Nexstar Media
  • New York Times
  • Sirius XM
  • Boingo Wireless
  • Purple Innovation
  • Sonos
  • Amazon
  • Blue Apron
  • Alibaba
  • eBay
  • GrubHub
  • JD.com
  • Shutterstock
  • Peloton
  • Sturm Ruger & Co.
  • Campbell Soup
  • Central Garden & Pet Co.
  • Clorox
  • Okta
  • Alarm.com
  • Citrix Systems
  • Atlassian
  • Slack
  • Zoom
  • Diamond Eagle

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