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April 24, 2020, 8:08 a.m. EDT

Stock winners and losers in the post-Covid 19 work-from-home world

Arranging your home for work and play will benefit many companies, from consumer-electronics makers to home-furnishings purveyors

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By Michael Brush, MarketWatch

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Virtual desktops

Cloud-based desktop virtualization systems store employee desktops remotely on servers instead of locally on devices. This helps remote employees access their work desktops from many different devices including PCs, smart phones and iPads, which makes it easier to work from home. The work-at-home trend will help companies that offer virtual desktop software like Citrix /zigman2/quotes/206700852/composite CTXS -3.94% , VMware /zigman2/quotes/209864107/composite VMW +1.07% and Microsoft, says Jefferies analyst Brent Thill.

Security plays

As more people work at home, it’s easier for thieves and trouble makers to break into computer systems. So this trend will increase security spending. Thill says this will benefit CrowdStrike /zigman2/quotes/212513426/composite CRWD -2.35% , Varonis /zigman2/quotes/204126818/composite VRNS -1.36% , Palo Alto Networks /zigman2/quotes/207599953/composite PANW -1.33% , Okta /zigman2/quotes/210420951/composite OKTA -0.70% and Ping Identity /zigman2/quotes/214130089/composite PING -0.43% .

Nuts-and-bolts stocks

Increased communication from remote locations will boost internet traffic, putting a burden on network infrastructure and forcing telecom companies to increase investments in equipment. This will benefit Ciena /zigman2/quotes/208745450/composite CIEN +3.33% , Juniper /zigman2/quotes/207361368/composite JNPR +0.64% , Arista Networks /zigman2/quotes/206966450/composite ANET -0.89% and CommScope /zigman2/quotes/206734450/composite COMM -0.17% , says Jefferies analyst George Notter. The work-from-home trend should also benefit Equinix /zigman2/quotes/208927761/composite EQIX -1.08% , which is a data-center real estate investment trust, or REIT.

Higher demand for cloud servers, laptops and home computers, routers and communications-infrastructure equipment will boost demand for chips. Broadcom /zigman2/quotes/200646538/composite AVGO +1.07%  and Inphi /zigman2/quotes/208445412/composite IPHI -0.49% are companies that have a lot of exposure to this trend, says Jefferies analyst Mark Lipacis.

Potential losers

The shares of two types of companies might not rise as much as the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.03%  or the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.04%  as the economy rebounds from the lockdown recession. First, if more people are working from home, the rebound in the economy won’t necessarily translate into demand growth for office space.

“We see the most downside for New York City office REITs such as SL Green /zigman2/quotes/208985878/composite SLG -1.36% , says Jefferies analyst Jonathan Petersen.

A recent study by Jefferies suggests 90% of women go makeup free while working from home. So increased work from home would exacerbate the trend toward using less makeup, already in place since 2018. Jefferies analyst Stephanie Wissink thinks elf Beauty /zigman2/quotes/202760864/composite ELF -2.23% will face headwinds because of this.

At the time of publication, Michael Brush had no positions in any stocks mentioned in this column. Brush has suggested ATVI, PLNT, LOW, HD, MSFT, and PANW in his stock newsletter, Brush Up on Stocks. Brush is a Manhattan-based financial writer who has covered business for the New York Times and The Economist Group, and he attended Columbia Business School.

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US : U.S.: Nasdaq
$ 127.35
-5.23 -3.94%
Volume: 2.29M
Jan. 21, 2021 4:00p
P/E Ratio
27.36
Dividend Yield
1.16%
Market Cap
$16.32 billion
Rev. per Employee
$358,400
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/zigman2/quotes/209864107/composite
US : U.S.: NYSE
$ 134.09
+1.42 +1.07%
Volume: 2.86M
Jan. 21, 2021 4:00p
P/E Ratio
35.71
Dividend Yield
N/A
Market Cap
$55.69 billion
Rev. per Employee
$348,742
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/zigman2/quotes/212513426/composite
US : U.S.: Nasdaq
$ 221.00
-5.33 -2.35%
Volume: 3.18M
Jan. 21, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$50.08 billion
Rev. per Employee
$208,494
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/zigman2/quotes/204126818/composite
US : U.S.: Nasdaq
$ 180.29
-2.48 -1.36%
Volume: 317,863
Jan. 21, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$5.80 billion
Rev. per Employee
$161,493
loading...
/zigman2/quotes/207599953/composite
US : U.S.: NYSE
$ 365.62
-4.93 -1.33%
Volume: 988,898
Jan. 21, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$36.32 billion
Rev. per Employee
$425,306
loading...
/zigman2/quotes/210420951/composite
US : U.S.: Nasdaq
$ 262.24
-1.85 -0.70%
Volume: 1.02M
Jan. 21, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$34.18 billion
Rev. per Employee
$260,706
loading...
/zigman2/quotes/214130089/composite
US : U.S.: NYSE
$ 32.14
-0.14 -0.43%
Volume: 1.07M
Jan. 21, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.62 billion
Rev. per Employee
$254,877
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/zigman2/quotes/208745450/composite
US : U.S.: NYSE
$ 54.60
+1.76 +3.33%
Volume: 1.76M
Jan. 21, 2021 4:00p
P/E Ratio
23.57
Dividend Yield
N/A
Market Cap
$8.17 billion
Rev. per Employee
$502,298
loading...
/zigman2/quotes/207361368/composite
US : U.S.: NYSE
$ 25.25
+0.16 +0.64%
Volume: 5.79M
Jan. 21, 2021 4:00p
P/E Ratio
21.52
Dividend Yield
3.17%
Market Cap
$8.27 billion
Rev. per Employee
$471,961
loading...
/zigman2/quotes/206966450/composite
US : U.S.: NYSE
$ 311.66
-2.79 -0.89%
Volume: 424,095
Jan. 21, 2021 4:00p
P/E Ratio
34.91
Dividend Yield
N/A
Market Cap
$23.79 billion
Rev. per Employee
$1.05M
loading...
/zigman2/quotes/206734450/composite
US : U.S.: Nasdaq
$ 15.06
-0.03 -0.17%
Volume: 2.25M
Jan. 21, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.00 billion
Rev. per Employee
$278,170
loading...
/zigman2/quotes/208927761/composite
US : U.S.: Nasdaq
$ 719.90
-7.84 -1.08%
Volume: 318,331
Jan. 21, 2021 4:00p
P/E Ratio
141.25
Dividend Yield
1.48%
Market Cap
$64.84 billion
Rev. per Employee
$659,039
loading...
/zigman2/quotes/200646538/composite
US : U.S.: Nasdaq
$ 466.82
+4.94 +1.07%
Volume: 1.58M
Jan. 21, 2021 4:00p
P/E Ratio
74.10
Dividend Yield
3.08%
Market Cap
$186.83 billion
Rev. per Employee
$1.14M
loading...
/zigman2/quotes/208445412/composite
US : U.S.: Nasdaq
$ 178.13
-0.87 -0.49%
Volume: 0.00
Jan. 21, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$9.33 billion
Rev. per Employee
$533,774
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,853.07
+1.22 +0.03%
Volume: 2.57B
Jan. 21, 2021 5:02p
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
31,176.01
-12.37 -0.04%
Volume: 423.15M
Jan. 21, 2021 5:02p
loading...
/zigman2/quotes/208985878/composite
US : U.S.: NYSE
$ 63.02
-0.87 -1.36%
Volume: 1.14M
Jan. 21, 2021 4:00p
P/E Ratio
25.58
Dividend Yield
5.78%
Market Cap
$4.50 billion
Rev. per Employee
$1.27M
loading...
/zigman2/quotes/202760864/composite
US : U.S.: NYSE
$ 23.28
-0.53 -2.23%
Volume: 717,985
Jan. 21, 2021 4:00p
P/E Ratio
123.63
Dividend Yield
N/A
Market Cap
$1.22 billion
Rev. per Employee
$1.35M
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Michael Brush is a Manhattan-based financial writer who publishes the stock newsletter Brush Up on Stocks. Brush has covered business for the New York Times and The Economist group. He attended Columbia Business School in the Knight-Bagehot program.

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