Connor Smith
U.S. stocks had their worst day in more than a year as renewed pandemic fears roiled the market. It's too early to say whether or not the Omicron variant will evade vaccines and lead to fresh lockdowns, but that didn't stop investors from piling into more than a dozen stay-at-home standouts.
Barron's screened for Nasdaq Composite stocks with market capitalizations of at least $4 billion that rose in 2020 but were down year to date through Wednesday. Of them, 14 familiar suspects rose in Friday trading, while the broader Nasdaq Composite index was down 2.2%.
Shares of $Quidel(QDEL.US)$, which sells a popular rapid Covid-19 test, led the pack in our screen with a 10% jump in Friday trading. Omnicron, a new "variant of concern," as dubbed by the World Health Organization, could lead to stricter testing practices for events and travel.
$Zoom Video Communications(ZM.US)$ stock may be the poster child for stay-at-home stocks, so it's no surprise traders sent shares 5.7% higher on Friday. The stock recently sank amid disappointing growth prospects coming out the pandemic. The same is true for at-home exercise phenomenon $Peloton Interactive(PTON.US)$, which also rose 5.7% on Friday. The holiday season will be a crucial test for the fitness firm, as the company seeks to add new members while keeping existing ones from turning to gym memberships.
$Logitech International(LOGI.US)$ saw strong demand for its headsets and webcams amid the pandemic. The stock was up about 5.4% on Friday.
Videogame makers $Take-Two Interactive Software(TTWO.US)$ and $Zynga(ZNGA.US)$ gained 3.3% and 2.1%, respectively, Friday. Gaming was a key beneficiary of people spending more time at home. Another beneficiary was $Roku Inc(ROKU.US)$, which sells devices that allow consumers to access streaming services.
Shares of call-center-software firm $Five9(FIVN.US)$ and cloud identity provider $Okta(OKTA.US)$ also fit the bill as pandemic plays. On the flip side, sports-betting firm $DraftKings(DKNG.US)$ could be hurt by potential lockdowns at sports venues. That said, high-growth firms tend to rise when bond yields fall, which could explain the stock's resilience on Friday. The same is likely true for $Beyond Meat(BYND.US)$, which is less a pandemic play and more a pea-protein play.
Rounding out the list are $Zai Lab(ZLAB.US)$, a China-based biopharmaceutical company, genetic-sequencing firm $Illumina(ILMN.US)$, and Chinese internet giant $Baidu(BIDU.US)$.
Friday's trading activity gave pandemic stocks another day in the sun. But investors should keep in mind that, eventually, such fears will fade from the market. And if the latest earnings season has taught us anything, it's that the stay-at-home trade can't last forever.
Write to Connor Smith at connor.smith@barrons.com
Comment(20)
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What happens to the NEW NORMAL
Virus mutation is expected
The rate of spread is the main concern
Especially when the environment is promoting
Countries lacking of restrictions always becoming the fore front to promoting the spread and thus advances the mutation rate.
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Covid caused new life practices
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