Good morning, how are you today?
Still suffering from an attack of hyplegia? If you don’t know what I’m talking about, perhaps you should refer to yesterday’s Money Morning essay.
Although if you were suffering from hyplegia and took my advice, you probably won’t see or read this until tomorrow. In that case, well done for taking the cure to hyplegia, and happy Saturday.
But if you are reading this today, then you either don’t have hyplegia or just think I’m a couple kangaroos short of a top paddock.
Good for you.
Today, however, I’m going to admit that it’s hard right now to think about anything else that’s not pandemic related. After all, that’s today’s buzzword of the day…
Terrifying word. Makes me think of a capuchin monkey, Dustin Hoffman, and Rene Russo in yellow hazmat suits.
The thought of a pandemic has also spurred me into heading to Costco today. I shall be stocking up on supplies in case we run out of the vital things in life…
Beer, wine, Weetabix…
You know, the important things you’ll need in a zombie apocalypse.
Actually the real reason for my Costco trip is to buy a new TV for our conservatory. I now have more TVs than cans of ‘survival beans’. Besides without another TV, how else will I be able to watch Outbreak in the conservatory? Interestingly, according to the mainstream media, Outbreak is looking now more like a documentary than a fictional movie…
If we don’t die…then what?
Here’s a thought experiment for you.
Imagine what the world looks like if we don’t all die from coronavirus. Let’s just (hypothetically) say that by June/July and most definitely by the end of the year, it’s not such a big deal anymore.
Let’s assume they’ve controlled the spread, figured out how to effectively treat it. People aren’t dying from it and reported cases are actually falling. And also they’ve renamed it ‘New Bat Flu’ just so it’s got a snazzier title than COVID-19.
Does the world just return on its merry way as though it was December 2019? Or will there be lasting repercussions? If we’re not all dead from this by Christmas, what happens next? What’s the real aftermath from this if it gets under control?
Will the streets of Australia’s major cities be littered with people wearing paper masks as though its downtown Beijing? Will there be public access hand sanitisers on every other street post like you see in the hallways of a hospital? Will we stop going out as much and prefer to socialise indoors?
I think that’s actually quite possible, if not likely, at least for the foreseeable short-term future.
What I’m saying is that if you think about the impact on social behaviour ‘New Bat Flu’ will have, it throws up a few opportunities.
Think about it…
Let’s say those things do come true. And the sales of hand sanitisers go through the roof. It would make sense to look for companies that make hand sanitisers, like Food Revolution Group Ltd [ASX:FOD].
A couple of weeks ago the stock was trading at 5.5 cents. Luckily Food Revolution has recently completed a bottling line enabling them to produce hand sanitisers. Yippee! A mass shortage of hand sanitisers in the Asia-Pacific region meant Food Revolution was primed to sell loads of it.
And they will. And it saw their stock price pop. And it may even rise further because people now might use it more often, even after this all subsides. I always have a little bottle of hand sanitiser when I fly from country to country. Did it before ‘New Bat Flu’ and will do it after.
That’s because in general, people are disgusting. Hopefully this whole pandemic will make people a little cleaner and maybe hand sanitiser in everyone’s bag might be part of that.
But Food Revolution and hand sanitiser is old news.
What else benefits from the fallout from the pandemic?
The ‘self-isolation’ opportunity
Well maybe we all do stay in more and socialise at home or via other mediums. What about gaming companies, VR companies, streaming companies? If we’re going to be spending more time indoors then we’re going to be doing ‘indoorsy’ stuff.
Gaming, watching TV, streaming music, surfing the internet (more), chatting via messaging services, or FaceTime, or Portal, are all things we’ll do more of.
That’s good news for some of the giants of the tech world, Netflix Inc [NASDAQ:NFLX], Activision Blizzard Inc [NASDAQ:ATVI], Facebook Inc [NASDAQ:FB], Alphabet Inc [NASDAQ:GOOG], Amazon.com Inc [NASDAQ:AMZN]. But could mean a change of fortunes for some ASX-listed companies too.
Companies such as Esports Mogul Ltd [ASX:ESH], Emerge Gaming Ltd [ASX:EM1], and Animoca Brands Corporation Ltd [ASX:AB1] are all involved in e-sports or online gaming platforms. They’re all minnows of the ASX, but are all part of a world that’s fast becoming mainstream.
They’re all also well entrenched in the Asia-Pacific region, a notoriously hot market for online gaming and e-sports.
Also if we’re staying in more, ‘self-isolating’, then we’re also probably working from home more. That means we’re going to need high-speed, reliable connectivity. Businesses will need to ensure they’re not ‘down’ so they can service all their clients that are now also ‘self-isolated’ at home.
Companies like Spirit Telecom Ltd [ASX:ST1] deliver fixed wireless internet to businesses. And considering how rubbish the NBN is, it’s very likely this could all end up being a catalyst for Spirit to see more growth and a rise in fortunes for the company.
MNF Group Ltd [ASX:MNF] is another that could benefit from a faster shift to remote, at home, off-site working so we don’t all spread disease to each other. What better way to protect yourself from ‘New Bat Flu’ than to run all your meetings virtually?
Of course that doesn’t all happen magically, and companies like MNF provide the services and backbone to enable these kinds of modern communications technologies. Although their stock price took a whack over the last week, they delivered decent financials and the company is growing and profitable. Maybe there’s a reversal of fortune on the cards there too?
The world isn’t ending, but perhaps it’s going to change a little faster thanks to the global COVID-19 pandemic. If it does, there will be companies that will benefit from it. Food Revolution is an example of how quickly things can change.
As a stock investor all you need to do is be ahead of the change and look at what happens when this all fades away.
Editor, Money Morning
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