Back To Work
While greater work-from-home adoption might become a post-crisis legacy, large swaths of employees will likely be returning to the office. That should benefit areas such as childcare, catering, industrial cleaning and small-business solutions, including companies that provide payment solutions for smaller businesses.
Koch also says a number of company executives she’s been in touch with have voiced a desire to localize some of the most vulnerable parts of their supply chains. Should that happen, advanced manufacturing companies and 3-D printing firms might be well positioned to reap the benefits because they can help control for labor costs, she said.
Having Fun, Again
One of the most visible and alarming emblems of the current crisis has been the escalation in jobless claims and the accompanying plunge in consumer confidence. Fears the consumer might be slow to bounce back are everywhere, with Jerome Powell, the chairman of the Federal Reserve, saying this week that the downturn’s depth and duration remain extremely uncertain, with the burden falling most heavily on those least able to carry them.
Koch and her team expect a gradual recovery but find comfort in historical precedent. Crises, including the current one, tend to make people eventually want to go out and live life to the fullest. “We do expect a gradual resurgence of the millennial consumer preference for experience over things,” she said.
Highly select travel names and second-derivative plays in the travel space -- such as tech companies that enable travel planning as well as restaurants -- could be beneficiaries.
Data Domination
As businesses shuttered in March, millions migrated to working from home -- and many may continue to do so even once the coronavirus outbreak has been conquered.
One of the legacies of this crisis is going to be demand for getting data and getting it faster, said Koch. A greater number of people might live their lives online than they did before the outbreak -- and it’s a trend that could resonate across multiple generations.
This may expedite 5G capex spend in the U.S. and potentially around the world. While many data-related names have been resilient, there is a dislocation between price and value in select semiconductor companies that are focused on 5G solutions, she said.
--With assistance from Sarah Ponczek.
This article was provided by Bloomberg News.