4 Stocks with “Rocket Ship” Path to Recovery
Why settle for a V-shaped recovery when you could aim for a “Rocket Ship” recovery? RBC analyst Mark Mahaney identifies four large cap stocks he believes are most COVID-resistant. With strong momentum resulting from new normals brought upon by the pandemic, shares of Amazon, Shopify, Netflix, and Spotify are positioned for a “Rocket Ship” path to recovery, he says.
Amazon & Shopify (up 72% and 160% YTD, respectively): COVID-19 has accelerated e-commerce adoption and RBC thinks Amazon and Shopify have been two of the largest winners from this trend.
“While demand has surged from physical store closures, we believe that consumer buying patterns have likely changed permanently, which should allow for healthy, sustainable topline growth for AMZN and SHOP.”
Spotify (up 84% YTD): Spotify’s stock has been a runaway train since acquiring exclusive rights to The Joe Rogan Experience podcast. Enthusiasm for the future of podcasting, coupled with a spike in demand as a go-to source for music, is making Spotify a favorite on Wall Street.
According to an RBC survey that showed SPOT as one of the two most popular sources of music, “paid music streaming usage on SPOT surpassed Free Ad-Supported Streaming for the first time, SPOT had the highest Satisfaction levels in the category, and Podcasts are a key catalyst for growth.”
Netflix (up 66% YTD): NFLX is another stock RBC names as a structural winner emerging from COVID-19.
“Our most recent NFLX survey work showed record high penetration at 68% in the U.S., Satisfaction back to pre-price-increase levels, and improving Churn trends, all driven, in part, by LLOs and a robust Originals content slate.”
Fun fact: LLO = Local Language Originals
