Top 3: Survival of the fittest

Updated: Jul 3

With many businesses and corporations negatively affected by the pandemic, we're here today to count down three sectors that have been able to weather the storm.

#1: E-Commerce

Although governments forced the closing of many small businesses and non-essential stores, the online shopping world has seen an influx of new users as many are now forced to make the switch from physical shopping to ordering online.

As a result, stocks such as Amazon and Shopify have seen tremendous boosts in share price since mid-march, and continue to break record-high prices, with amazon up about 35% from its low on March 16, and Shopify up an astounding 90% from March 16. As consumers are forced to stay inside and retailers are shut down, look for the e-commerce sector to continue their growth amid this unique crisis.

#2: Certain Retailers

Retailers that are deemed "essential" by the government are of course having a much easier time making ends meet than "non-essential". Places like Walmart and Costco, which have been able to adapt and offer services such as curbside grocery delivery, have settled into their place and act as an outlet for consumers to get their daily needs while essentially everywhere else is closed.

Share prices in such retailers haven't exactly shot sky-high like e-commerce, but they have been able to maintain the position they were in pre-pandemic and some have even risen.

For instance, take Walmart as an example. The share price has risen 18.1% to date from its low point of $104.05 on March 12. The big-box retailer has taken proactive steps in its reaction to the pandemic, with opening testing centers and express delivery (which supposedly can deliver in under 2 hours).

Not all stores are impacted equally, and each retailer takes different actions in adapting to changing conditions. Each company should be treated on a case-by-case basis, so don't assume every big-box is a winner.

#3: Food Producers

On Maslow's hierarchy of needs (for those unfamiliar), having food is at the bottom of the pyramid, which means it's essential that all humans need to have in order to survive. With this in mind, one can logically understand why food producers have seen a rebound back up in their share prices since the beginning of lockdowns.

With Canada recording an unemployment rate of 7.8% in March, and many others having to take a leave from their workplace, consumers are on a stricter spending budget, and buying essentials is what they need.

Companies such as General Mills, Pepsico, and Kellogg's have all seen a bounce back to their pre-dark ages trading prices, and some have even surpassed them.

Logically speaking, it should be no surprise that these three sectors are holding on better than others. People (obviously) need food, and with restrictions placed on many stores, consumers are either going out to get what they need or going online for what they want.

Any thoughts? Feel free to comment below

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