Zoom, Okta, DocuSign: With Covid Cases Surging, Should You Revisit Work From Home Stocks?

The Covid-19 pandemic has forced people to increasingly work and learn from home, causing surging demand for connectivity, collaboration, and cybersecurity-related software. Our indicative theme on Work And Learn From Home Stocks is up by almost 200% year-to-date, compared to the S&P 500 which is up a mere 1.5%.  Although the theme was impacted by the big sell-off in the market over the last week, declining by about -8%, it’s likely to recover quickly considering that Covid-19 cases have been surging in the U.S. in recent weeks, potentially calling for greater restrictions and stay-home orders. Zoom (NASDAQ: ZM) has been the biggest driver of the theme’s returns, rising by almost 580% year-to-date. On the other side, Slack’s (NYSE: WORK) performance has been more muted, rising 14% this year. Below is a bit more about the companies in our theme.

Zoom (ZM) has emerged as the video conferencing platform of choice through the pandemic, thanks to its easy user interface and simple sign-up process. The stock has gained almost 580% year-to-date although it declined by about -10% over the last 5 trading days.

ZM

DocuSign (DOCU) offers e-signature solutions that enable companies to sign and manage contracts and agreements digitally, avoiding a time consuming and inefficient manual process. While the stock has rallied 173% year-to-date, it declined -8% over the last 5 trading days.

CrowdStrike (CRWD) is a cybersecurity player that offers a cloud-delivered endpoint protection platform, which relies on lightweight software running on the customer’s servers or laptops. The stock is up by 148% this year, although it is down by about -9% over the last 5 trading days.

Okta (OKTA) is a cloud security company that provides identity and access management tools that enable users to securely access cloud-based applications from various devices. The stock has gained about 82% this year and is down by about -4% over the last 5 trading days.

Slack Technologies (WORK) is best known for its collaboration platform that is positioned as an alternative to email. However, the stock has seen pressure in recent months, as Microsoft’s rival product Teams has been gaining ground, thanks to its massive customer base. Slack stock is up by about 14% year-to-date and is down by about -11% over the last 5 trading days.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio to beat the market, with over 100% return since 2016, versus about 50% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.

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