Fall is almost here, and COVID-19 is rearing its ugly head once again. The dreaded Delta variant is sweeping the globe, with many regions seeing record-breaking numbers of new cases. The new Delta variant is seen as being more contagious than previous ones. Some have even raised the question of whether it might be vaccine-resistant. In response to the rise of the new variant, public health authorities in the U.S. have floated the idea that new public health measures might be needed in the fall.
If that’s the case, then there will be implications for businesses and investors. Lockdowns generally hurt retailers, airlines, cruise lines, hotels, and movie theatres very hard. However, there are other industries that actively profit from retail business closures. In this article, I’ll explore three such stocks to research before the Delta variant hits hard in the fall.
Shopify (TSX:SHOP)(NYSE:SHOP) is one company that indisputably made money thanks to COVID-19 health measures in 2020. Thanks to retail stores being shut down, the company posted its best revenue and earnings-growth rates in years. In each of the last three quarters of 2020, SHOP posted revenue growth in excess of 90%. In Q1 2021 revenue grew at 110%, in Q2 2021 it grew at 57%. For the full year 2020, GAAP and adjusted earnings were both positive. The COVID-19 pandemic had a lot to do with this. The pandemic caused retail stores to shut down, resulting in more sales for online stores like the ones hosted on Shopify. The results speak for themselves. Shopify not only experienced solid growth in 2020; its growth actually accelerated compared to 2019. If Delta causes more lockdowns in the fall, then it might happen again.
Lightspeed POS (TSX:LSPD)(NYSE:LSPD) is another company that actively gained from the COVID-19 pandemic in 2020. Like Shopify, it offers an online payments platform, so it benefitted from the online sales surge in 2020. Unlike Shopify, however, its growth hasn’t slowed down in 2021 at all. In Q2, it had its fastest revenue growth yet, with sales up 220% year over year. It was the company’s best ever quarter by far. And if Delta rears its ugly head this fall, LSPD will be well prepared to deal with it.
Cargojet (TSX:CJT) is an airline stock that experienced significant growth in 2020. You might be surprised to hear that, because airlines were some of the companies worst hit by the pandemic. But you need to understand the business Cargojet is in. The company isn’t a passenger airline but a cargo airline — an airline that transports goods instead of people. Not only that, but its specific niche is doing overnight orders for e-commerce vendors. So, it gets the e-commerce boost from lockdowns just like Shopify and Lightspeed do. As a result of this advantage, LSPD grew its revenue by 37% in 2020 and doubled its cash from operations. It was a solid result and a solid year for Cargojet all around. It’s definitely a company that won’t be hit too hard if Delta causes problems this fall.