Buy these 'social distancing' stocks, says JPMorgan

Published Sat, Mar 21 202011:13 AM EDT

Certain stocks are poised to benefit from the stay-at-home trend brought on by the coronavirus pandemic and that is likely to linger, according to JPMorgan. The firm created a "social distancing" basket, with high conviction names that should be beneficiaries from the implementation and persistence of social distancing practices. Stocks dropped violently in the past month on fears of the economic ramifications of the fast-spreading coronavirus. All three major averages are deep in a bear market, more than 20% off their most recent highs. The government has encouraged "social distancing," leaving millions of American quarantined in their homes for the foreseeable future. On Thursday, California Gov. Gavin Newsom ordered a statewide "state at home" policy to curb the spike in infections of the coronavirus. While travel, restaurant and hotel stocks are getting crushed as people stay inside, JPMorgan said this list of stocks can get a boost from the new societal norm. E-commerce giant Amazon is serving as an important source of food and cleaning supplies as physical stores are closing and people increasingly avoid public spaces. Amazon's stock is flat for the year, a stunning outperformer as stocks crater. Amazon has indicated it has seen a significant increased in demand and is adding 100,000 workers across its fulfillment centers. JPMorgan raised its first quarter sales estimates for Amazon this week. Pet food delivery service Chewy is also in JPMorgan's basket. The service delivers pet food and items right to consumers' doors. JPMorgan said Chewy is well positioned given its high recurring revenue stream and staples-like consumables. Chewy is up more than 10% in 2020. Peloton , which sells stationary bikes for in-home cycling classes, is another beneficiary of social distancing. While gym and workout studios close, people are turning to the Peloton products and at-home apps. Streaming platform Netflix and gaming companies Activision Blizzard , Zynga and Take-Two Interactive are befitting from the quarantine as people looks for new form of entertainment while at home. Zoom Video , which provides remote conferencing services for companies, has gained more than 90% this year as it sees a spike in users from companies making work from home policies. Discount retailers Dollar Tree and Dollar General are benefiting from the "stocking up" trend and maker of bleach and disinfecting wipes Clorox has emerged as a real winner and people try to avoid the fast-spreading virus. Clorox shares are up about 25% this year. Textbook provider Chegg and social media companies Facebook and Twitter are also in JPMorgan's social distancing basket. — with reporting from CNBC's Michael Bloom.

Peloton Cycling offers livestream classes from home

Source: Peloton

Certain stocks are poised to benefit from the stay-at-home trend brought on by the coronavirus pandemic and that is likely to linger, according to JPMorgan.