If February 2020 was forgettable for investors then March 2020 would be a month which most of the investors want to skip in their investing life. But what is the guarantee that April and May 2020 will be better if not the worst? So a rational investor can not wait for bottom as he dont know about the bottom. But what to buy and what to leave in such markets?
Let’s try to find out
Just when i was thinking what stocks to buy in these stressing conditions for economy and people, i mostly get stuck on FMCG companies. But the amount of negative news for the whole market is so high that making a decision is becoming difficult day by day. So i thought to keep watch on all news around COVID-19 lockdown and see if there are any positive inputs for any sector or industry.
It is evident from various sources that people are getting bored at home even when they are WFH. Although some of them are fitness conscious and are actively engaged in indoor exercises but their normal physical movement has almost gone done to ZERO. To pass the time, they have started indulging in binge watching/exercising to somehow beat boredom or depression. So i feel that these are the two sectors which could benefit the most in this lockdown as grocery stores are open and some of them do keep yoga mats or basic exercise equipment.
I searched a bit more on internet and came across something which positively testify this theory. https://www.stackline.com/news/top-100-gaining-top-100-declining-e-commerce-categories-march-2020
The site mention the TOP 100 Grwoing and declining e-commerce categories in US although most of these things also apply to Indian context as well.
Some of the major takeaways are (source : stackline)
· There is a surge in home fitness products including weight training equipment, fitness accessories and yoga equipment as gyms and workout studios are forced to close. Due to the increase in at home workouts, the gym bag category and many outdoor sport categories such as baseball & softball and track & field are in decline.
· Many companies have implemented a work-from-home policy, driving demand for computer monitors, keyboards & mice, and office chairs up as employees look to create a temporary home office.
· Most travel has been halted, causing declines in the luggage & suitcases, briefcase, and camera categories. Additionally,many spring break vacations were canceled, triggering a decline across sandal and swimwear categories.
· Formal apparel categories including Bridal and Men’s Suits are in decline as many couples are forced to cancel or delay their weddings.
So what we can take out from this in current Indian Stock Market scenario?
My observations (not recommendations) :
- Hospitality and Aviation stocks are facing issues like Lemon Tree hotels, Oberoi, Indigo, VIP industries etc.
- Branded retail stocks like Future group are also facing headwinds
- Jewelry stocks like Titan etc may face headwinds for quite some time.
- Real Estate stocks like Oberoi, DLF may be down for quite a long time
- FMCG stocks like ITC etc may be gaining out of this
- Pharma company stocks like Abbott, CIPLA, IPCA which are into sale of vitamins, cold and cough medicines, masks, PPE and ventilators may gain more
- IT stocks like TCS, INFOSYS etc may win more contracts
- Communication related companies may gain like Reliance Jio
- Gyms like Talwarkars may be facing headwinds for a bit longer time
- Food delivery services like Jubilant may gain market share
Please note that the information shared is for educational purposes. My views can be biased and i may hold some of the stocks mentioned. Please consult your financial adviser before taking any financial decision and most importantly do your own due dligence
What do you think out of this COVID lockdown? Please comment or mail me your views
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.