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Two stocks could be best long trades as second quarter begins, strategist says

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Two stocks could be best long trades as first quarter closes out, strategist says

The second quarter began on Wednesday with more losses.

The S&P 500 and Dow Jones Industrial Average both fell more than 3% to begin April as worries over the coronavirus pandemic and the economic fallout continued to grip Wall Street.

Strata Analytics founder and macro strategist Matthew Garrett calls this new environment an "exercise in adaptation" for investors and says there are still a few bright spots amid the heightened volatility.

"As everybody's working from home now, families are also starting to wear the teacher hat," Garrett said on CNBC's "Trading Nation" on Tuesday. "There's a couple plays in that area, you know. I think towards a company called K12 [Inc.]... symbol LRN. They provide a suite of products and software for both administration of schools but also curriculum, testing materials, study materials for kids. … That is going to be a big regime shift now. I think everybody's getting used to adapting what they call a virtualized classroom."

K12, a company with a $735 million market cap, is up 5% in the past week, while the S&P 500 is slightly lower. It has fallen 12% this year, roughly half the S&P's decline. 

"There's also a company called Rosetta Stone, people might be familiar with that; they have the language software. So, there's kind of like two hits on that. If everybody's thinking, 'I can't wait to get to Italy and finally take a vacation again,' maybe they have some downtime," said Garrett.

Rosetta Stone is an educational software company worth $318 million in market value. It has fallen 29% this year. 

Disclosure: Garrett has positions in K12 and Rosetta Stone. 

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