WFH Stocks Are Adding Sheen to Investors’ Portfolio
Microsoft, Google among favorites on Stockal platform
With a large part of the world restricted to the confines of their home, business interactions and meetings have moved online. So have conferences, seminars, and training programs. This has resulted in an increased demand for collaboration tools. What’s more, after trying these tools for a few weeks, people are now happy to pay for them!
The shift towards work from home has well begun. If you too are making use of one or more of these products and services, why not invest in them too?
Companies that offer online tools to enable people to work from anywhere have recently been the toast of the market. Technology giants like Microsoft, Google, IBM, HP amongst others have been beneficiaries of this effect. Microsoft, for example, has seen the usage of Teams, its video calling offering, spike sharply.
“There is both, an immediate surge in demand and systemic structural changes across all of our solution areas that will define the way we live and work going forward,” — CEO Satya Nadella said during the quarterly earnings call last month.
The emerging opportunity is so noticeable that Direxion has set up a new thematic exchange-traded fund (ETF). The ticker symbol for the ETF, predictably, is WFH the ETF will track investments in the industries that are supporting remote work — remote communication, security, and cloud technologies. Since these are the early days, there might be other emerging opportunities that the ETF may track.
With work from home taking off in a big way around the world, Direxion’s first of its kind offering could well be lapped up by the markets and investors.
Early Days in A Paradigm Shift
The usage for the platforms for cloud storage, security as well as productivity tools are, proverbially, already bursting at the seams. During its quarterly earnings call, Zoom CEO Eric Yuan mentioned that there were several companies that were running operations without any physical office, suggesting that working from home was a change that was here to stay.
Yet, this could be just the beginning. According to the US Bureau of Labor Statistics data for 2018, 26 million Americans, or about 16 percent of the workforce, spent some of their time working from remote locations. In the last two years, several new collaborative tools and apps have been introduced in the market as working online became more popular. These tools and apps are making it easier than ever before for people to work from anywhere.
Most importantly, companies are open to remote working more than ever before. In its Global State of Remote Work for 2018, Boston based OWL Labs said that 44 percent of the companies around the world did not permit remote working. Its survey had respondents from 23 countries across six continents.
As companies and their workforces get organized around this shift, mining the data could also be a smart opportunity for analytics companies. Several experts and industry watchers vouch that a bunch of tech stocks are looking ready to ride the cusp of change.
Investing in WFH focused companies
Investing in tech companies that make it possible to work from home or work remotely is a click away.
On the Stockal platform, choosing to buy a stock has been a breeze for investors across India and several countries in the Middle East. While some investors have reposed their faith by putting in buy trades for Zoom, Box, Dropbox, Hewlett Packard Enterprises, and Slack, the overwhelming favorites have been Google and Microsoft.
Microsoft (MSFT) has found new buyers for its suite of products as work from home turned into a reality. For smart investors, it was an indicator of strong demand and that has pushed the stock higher. It has outperformed the S&P 500 index by over 2X in 2019. Google has not done as well but its cloud business has been an outperformer. It expects to clock $10 billion in cloud revenues.
WFH trend gathers steam
Cloud-based companies, typically, have a subscription or freemium model for businesses. They get the lowest hanging fruits among customers with their free offering and as customers get used to the offering, the pricing moves up.
Companies in sectors like healthcare, communications, education, online security could register the smartest gains while support businesses like technology and logistics reap resultant rewards.
Companies with no physical offices will be a reality sooner rather than later. Twitter has already announced that it could allow some employees to forever work from home. Google & Facebook employees can WFH until the end of the year.
Another company to join the bandwagon is Shopify. Tobi Lutke, CEO of Shopify, tweeted on Thursday that the company is moving to a work from a home model and will keep the offices shut till 2021.
It is amazing how things change. In 2013, former Yahoo! CEO Marissa Mayer had banned employees from working from home. It has been just a few years and the wheel has come a full circle!
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