stocks – – Tradingsim

Stocks and ETF’s (exchange trade funds) are different, but still potentially profitable for investors. Investors can choose from many high-profile growth stocks. ETF’s can have lower risk than stocks because they have diverse holdings. But which one is best for long-term investments? This TradingSim article will tell readers the difference between stocks vs. ETF’s, compare the performance between stocks and exchange-traded funds. This article will also analyze and compare the 10 top stocks and ETF’s performance in the stock market and determine which investment product is best for investors.

Stocks let investors focus on one company

Stocks are individual shares of a particular company. A company can offer shares of a company to raise funds or various other reasons. When an investor picks a low-risk value stock like Apple(NYSE:AAPL), an investor owns a piece of Apple. US stocks can trade on the New York Stock Exchange or NASDAQ. A stock’s value can fluctuate based on whether there is a bear market or a bull market. Investors can have their say in shareholder meetings and be an activist investor if they want more say in how the company acts in the future. Companies offering stock also can offer quarterly dividends to investors as well.

Stocks vs ETF’S- stocks offer individual shares and are more volatile.

Stocks focus on one corporation but are very volatile. Outside forces in the stock market or the corporation’s own fortunes can reverse, driving a stock down. Stocks are very volatile and can be risky for investors looking for long-term options.

Stocks vs. ETF’s: Stocks may be better for tax purposes

When comparing stocks vs. ETF’s, stocks may be better for investors that are concerned about tax benefits. Benjamin C. Halliburton, chief investment officer at Tradition Asset Management said individual stocks offer an advantage.

” Individual stocks are more tax-efficient than mutual funds and should be utilized in taxable portfolios when the investor has enough assets,” said Halliburton.

ETF’s offer a basket of stocks and securities

ETF’s buy stocks, bonds, and commodities into a basket. Similar to stocks, ETF’s are sold shares of the basket holdings to investors on the New York Stock Exchange, the American Stock Exchange, and NASDAQ. Another similarity between stocks and ETF’s is that they both offer quarterly dividends to investors just like stocks.

In contrast to stocks, ETF’s are a collective investment. Just as there are thousands of different stocks, there are numerous ETF’s for investors to choose as well. Some are from mixed industries. There are ETF’s for everything from gold to marijuana. while others may focus on one sector, like tech. ETF’s can also have holdings from other countries, while New York Stock Exchange stocks are only U.S.-based.

In the comparison of stocks vs. ETFs, both ETF’s value can fluctuate like a stock. ETF’s often mirror the movement of the stock market. So, any decline in the stock market could greatly negatively impact ETF’s .

ETF’s are also different from stocks because they offer inverse ETF’s. Inverse ETF’s are created to profit when there is a decline in the markets. They’re best for short-term investments because they use derivatives that are sold every day by the fund’s managers. Inverse ETF’s can lead to losses if held more than a day. However, inverse ETF’s can be less costly than shorting stocks.

John Hood, president and portfolio manager at JC Hood Investment Counsel, noted that inverse ETF’s could be risky for investors.

“When you’re dealing with inverse or leveraged ETFs, you’ve left the investor market and entered the gambling market,” he says, adding that many investors don’t understand the product before buying. “I’ve had people call me and say that they have a leveraged two-times ETF and, as the market has been going up, their ETF has been going down. Well, they didn’t read the details first.”

Stocks vs. ETF’s: How do they compare with liquidity?

Stocks and ETF’s differ slightly with liquidity. Liquidity is the conversion of stocks or ETF’s into cash. Penny stocks that don’t have as much value as stocks with bigger names may not have as much liquidity. However, blue-chip stocks like Microsoft (NASDAQ:MSFT) offer more liquidity than ETF’s because different factors affect and ETF’s liquidity. ETF liquidity depends on the fund’s trading volume and the quality of the ETF’s products. Stocks offer an advantage over ETF’s if investors are looking for easy liquidity.

How did the top stocks and ETF’s perform during the bull market?

While stocks grew exponentially during the bull run, ETF growth exploded from 2009-2018. With ETF’s that tracked along with the S&P, they both rose equally during the bull market to $4 billion in assets by 2019. As the S&P climbed 14% in 2016, ETF volume also surged 17% in 2016. John Davi, founder and chief investment officer of Astoria Portfolio Advisors, noted that ETF’s that followed the S&P 500 and minimized risk exceeded expectations.

“If you look at all the ETFs that have gathered the most assets over the last 10 years, it’s going to be your SPY, your EFA, EEM, so, those are low-cost, pure-beta ETFs, like your standard wealth management solutions. So, USMV is the largest asset gatherer outside of that core, so I like it. It hedges the downside risk,” said Davi.

How do the top 10 stocks vs. ETF’s in recent performance?

During the current bear market, stocks and ETF’s have different returns on investments. TradingSim’s charts will be used to analyze the top 5 performing stocks and ETF’s of March 2020 since the COVID-19 crisis started. While both stocks and ETF’s can’t be exactly compared based on performance, the analysis will show a broad overall comparison. The comparative data will show which perform better for long-time investors.

Clorox outperforms other stocks during coronavirus crisis

Clorox (NYSE:CLX) had a 24% gain over the past month. Because of the coronavirus crisis, the cleaning product company has seen a double-digit gain. Clorox has become a safe-haven stock in the midst of the COVID-19 crisis. While there is competition from store-brand disinfecting wipes, shoppers and investors flocked to Clorox over the past month as a trusted name brand during the coronavirus crisis. In addition to cleaning wipes, Clorox also makes hand sanitizer, a sold-out product during the current pandemic.

Clorox stock boomed and increased 17% overall since the start of the year. The household product industry is typically recession-proof and outperform the S&P 500. Clorox stock was also helped by the Environmental Protection Agency. The EPA recently recommended many Clorox products for Americans to use, which helped the company’s stock rise as well.

“Using the correct disinfectant is an important part of preventing and reducing the spread of illnesses along with other critical aspects such as hand washing, ” said the EPA in a statement.

During the coronavirus pandemic, financial analyst Steven Strycula predicts that Clorox will likely be a well-performing stock that investors can invest in for good returns.

“Based on conversations with retail buyers, we estimate COVID-19 related demand could boost baseline disinfectant category trends by 3-5x in the next few months as retailers work to rebuild inventory and stay in stock,” said Strycula.

This TradingSim chart shows Clorox’s stock rising the week of March 19.

Vanguard Total Stock Market ETF

Of the many ETF’s offered, some ETF’s from Vanguard have fallen below expectations. Vanguard Total Stock Market ETF (NYSEMKT:VTI) is one ETF that is down 14% year-to-date. Because this ETF tracks the overall stock market, the fund has stumbled over the last month. Davi noted that Vanguard ETF’s will perform eventually perform well despite the current stock market volatility. He noted that since ETF’s launched in 1993, they have been a low-risk option for investors.

“For my money, we prefer a little bit more transparency than less in general, but I’m always amazed about the ETF product,” said Davi. “I’ve been working in the ETF ecosystem for 20 years. I remember when iShares first launched 25 ETFs in one day. People were like, ‘Why do you need a single country? Why do you need a subsector ETF?’ And sure enough, we have an entire industry now. So, there’s always a market.”

This TradingSim chart shows the trajectory of the Vanguard Total Market ETF.

Davi notes that the recent $1.9 billion inflow into the Vanguard Total Stock Market ETF shows that this ETF can be resilient. Because the fund has shares of well-performing stocks like Walmart (NYSE:WMT), Davi feels that the ETF can bounce back.

“I think, overall, things feel a little bit more normal. I know the economic front is going to look pretty bad and it’s going to look real ugly in terms of unemployment claims, but price action on the ETF front has been encouraging. There’s actually been more inflows into ETFs, too. So, Vanguard took in a bunch of money in Q1 and I think [it] shows that the retail investor has been kind of hanging in there for the most part,” said Davi.

In this stock vs. ETF comparison between Clorox stock and Vanguard Total Stock Market ETF, Clorox has the edge.

SPDR Consumer Staples Select Sector Fund outperforms during coronavirus crisis

Just as Clorox stock and consumer staple stocks have performed well during the COVID-19 crisis, consumer staple ETF’s have also done well despite Wall Street volatility. The SPDR Consumer Staples Select Sector Fund (NYSEARCA:XLP) has been a safe haven ETF, according to investor Kent Thune.

“When information and data are short or absent, an investor must use their intuition, which comes from a combination of experience and educated guesses. In the short-term, no one knows where the market is headed. But it’s a reasonable bet that the U.S. is already in a recession, which will last months, not weeks,” said Thune.

The TradingSim chart below shows the strong performance of the SPDR Consumer Staples Select Sector Fund.

David Reyes, a financial advisor and chief financial advisor, noted that ETF’s like Consumer Staples Select Fund could be best for beginning investors.

“The best thing about index investing is that it is simple,” said Reyes. “Most investors are not comfortable managing stocks, so this is a great way to get exposure to the stock market without having to be a stock expert.”

SPDR’s Consumer Select Fund has the most holdings with Proctor & Gamble. Those consumer products have been popular with toilet paper and cleaning products being high in demand. The ETF is down 17.3%, year-to-date, but is still one of the top-performing ETF’s in this Wall Street volatility. It’s only down 6% from its record high in February.

The ETF could help improve the portfolio of long-term investors. In comparison between stocks vs. ETF’s, both Clorox and SPDR’s Consumer Select Fund are both equally strong investments for traders looking for long-term investment.

Gilead stock grows with possible COVID-19 treatment

In addition to consumer staples, biotech stocks have grown during the coronavirus pandemic. Gilead Sciences ( NYSE: GILD) stock has grown 24% over the last month and 15% since the start of 2020. The biotech company’s stock rose after the corporation developed an experimental drug, remdesivir, to treat COVID-19. Financial analysts at SunTrust Humphrey Robinson expressed optimism that the drug showed promise. However, they couldn’t make conclusive judgments about the drug since it was tested on a small group.

“We believe remdesivir could show benefit and clinical improvement; however, we cannot draw definitive conclusions from a compassionate use data given the limitations (such as small sample size, lack of controls and randomization and short follow-up periods),” wrote SunTrust Humphrey Robinson analysts.

Dr. Jonathan D. Grein, director of hospital epidemiology at Cedars-Sinai Medical Center in Los Angeles, also expressed cautious optimism about the effectiveness of remdesivir.

The TradingSim chart below shows the rise of Gilead stock.

“We cannot draw definitive conclusions from these data, but the observations from this group of hospitalized patients who received remdesivir are hopeful. We look forward to the results of controlled clinical trials to potentially validate these findings,” added Grein.

On top of Gilead’s promising COVID-19 medication, Gilead is dominant in medications for chronic diseases like arthritis. The corporation also has the best-selling HIV drug that has increased sales. Because of Gilead’s rising stock and biotech’s growth during the coronavirus crisis, the stock has been a solid buy for long-term investors.

SPDR S&P Biotech ETF strong despite Wall Street downturn

Gilead is a holding in the SPDR S&P Biotech ETF( NYSEARCA:XBI). The biotech ETF been performing better than expected in this economic downturn. While the ETF’s performance dropped 20%, the SPDR Biotech ETF was still outperforming the S&P 500 before the COVID-19 crisis. The low-expense ratio of 0.35% makes the SPDR S&P Biotech ETF an affordable option for investors. The ETF is still performing well compared to other biotech ETF’s with many biotech stocks in its basket .

The TradingSim chart shows the performance of the SPDR S&P Biotech ETF the week of March 19.

Gilead has edge in biotech stocks. vs ETF fight

Both Gilead and SPDR Biotech are equally good options for biotech investors. In a comparison of stocks vs. ETF’s, because both are in a field with large growth potential, they are possible great options for investors. However, Gilead has an edge over SPDR S&P Biotech ETF with greater gains over the last month.

Activision Blizzard stock steady as gamers have more time to play

During the nationwide quarantine, gamers have been getting a lot of practice playing Call of Duty. Activision Blizzard(NASDAQ:ACTI), the company that produces the popular video game, had its stock rise 2% over the last few days after financial analyst Eric Handler upgraded the stock from neutral to a buy.

“We believe management is making significant progress in improving its near-term and long-term growth profile,” said Handler.

Activision is also highly rated by other financial analysts. Todd Gordon, managing director at Ascent Wealth Partners, noted that Activision has a strong standing because of its popular games.

“Activision’s the bigger of the two. It’s a $46 billion market cap. They’ve got franchises like Call of Duty and Candy Crush. They have a better share of mobile gaming. Activision is well-represented across multiple platforms including PC, console, gaming, stuff like that. So, we hold Activision in our global growth portfolio,” said Gordon.

Activision Blizzard teams with WHO to reach more gamers

Gaming has even received a boost from the World Health Organization. The organization tweeted its support of gaming.

“We’re at a crucial moment in defining outcomes of this pandemic. Games industry companies have a global audience – we encourage all to #PlayApartTogether. More physical distancing + other measures will help to flatten the curve + save lives,” tweeted the World Health Organization.

Activision Blizzard stock is a stock that is a strong one for long-term investors who want a piece of the growing gaming industry.

Even though Activision Blizzard stock is down 1% this year, that’s still below the S &P’s decline of 11%.

Gaming stocks vs. ETF’s: Van Eck’s Gaming and Sports ETF performing well during quarantine

In addition to Activision performing well, the stock is part of a rival ETF (NERD). The ETF that’s competing with Activision’s ETF is Van Eck’s Gaming and Sports ETF (ESPO). is up 5% this year. Esports is also a bright spot in the stock market. Business Insider Intelligence noted that esports are growing since other physical sports are on hold during the quarantine.

“Total esports viewership is expected to grow at a 9% compound annual growth rate (CAGR) between 2019 and 2023, up from 454 million in 2019 to 646 million in 2023. That puts the audience on pace to nearly double over a six-year period, as the 2017 audience stood at 335 million,” stated Business Insider Intelligence.

Tony Hershey, a gaming stock expert, said that esports stocks and ETF’s can be profitable.

This TradingSim chart shows the trajectory of the Van Eck’s Gaming and Sports ETF.

“You’re now seeing [the market] differentiate between sectors and areas that can actually perform here [given the current environment, and] the data points are bearing it out,” said Hershey.

“If anything, I see current circumstances as accelerating a shift from physical to digital,” he added. “Esports are uniquely positioned relative to traditional sports to thrive in such an environment.”

With gaming stocks vs. ETFs, ETF’s have edge

VanEck product manager noted the success the gaming ETF can have during this stay-at-home time.

“Video game and esports stocks are uniquely positioned to weather this economic recession in which the vast majority of the population is forced to stay inside for extended periods of time,” said VanEck product manager John Patrick Lee in a recent note.

“Across the spectrum of the industry, including live-streaming, esports competition and concurrent users playing, analysts have noted a significant increase in the number of people logging on to play video games. What are people going to do if they are stuck at home for an extended period of time on a mandatory lockdown? Play video games—with themselves and each other.”

With the gaming stocks vs. ETF’s comparison, Van Eck’s Gaming and Sports ETF has a slight edge because of its diversified gaming and esports holdings.

Google stock strong with Apple partnership

Another tech stock, Google parent Alphabet (NASDAQ:GOOG) saw its shares jump by 5% after announcing its partnership with Apple(NYSE:AAPL). The two competitors will join forces to create a COVID-19 tracking system on iOS and Android phones. The partnership will likely continue to boost Google’s’ stock. Google’s CEO Sundar Pichai, noted that its growth in cloud computing will help Google’s stock perform well in the volatile stock market.

“Our investments in deep computer science, including artificial intelligence, ambient computing and cloud computing, provide a strong base for continued growth and new opportunities across Alphabet,” said Pichai.

Google hit by COVID-19, but survives with YouTube

Google stock had fallen 27% since the coronavirus crisis started. Suntrust Humphrey analyst Youseff Squali noted that Google’s other businesses have been heavily impacted by the recent economic slowdown.

“A number of key verticals for Google have been hard hit by the coronavirus, social distancing and an overall economy that’s being brought to a standstill. Those include travel, lodging, autos and retail,” said Squali.

Even though many tech companies are suffering from declined advertising, Google is still staying afloat. YouTube is still a strong part of Google’s properties. The popular video on- demand service is predicted to make $9.33 billion in 2020. Squali agreed that YouTube will help Google’s bottom line.

This TradingSim chart shows the volatility of Google(Alphabet stock).

“On the other hand, given YouTube’s ability to function as a medium to host both entertainment and news content, we believe it has particularly benefited from increased users and usage, as COVID-19 has forced social distancing and people to stay at home,” said Squali.

Financial experts say Google will survive advertising drought

Citi analyst Jason Bazinet said that he expects Google to remain a strong buy for investors.

“We[Citi] expect Google to have a greater near-term disadvantage but also have a faster recovery as pandemic effects reduce… We believe Alphabet will be more resilient vs. Facebook in weathering the advertising decline due to its lower exposure to the [small business] advertiser base,” said Bazinet.

Google is a high-profile, but undervalued stock. The tech stock’s trading at only 25 times its earnings. The tech giant is a great buy for long-term investors.

Invesco QQQ Trust Series One pivotal in tech stock vs. ETF fight

Invesco QQQ Trust Series One is an ETF that has underperformed overall, but is still outperforming the S&P 500. The ETF often touts its tech holdings.

“Nasdaq-100 companies (are) nimble and at the forefront of numerous long-term investment themes that are still in their infancy, such as big data, cloud computing, machine learning and automation,” states Invesco.

Even though Invesco QQQ Trust Series One is down 16%, the ETF is still going to survive because it’s heavy in tech stocks. Bob Phillips, managing member of Spectrum Management Group, said the Invesco QQQ Trust Series One could still be a strong buy. The majority of its $86.5 billion in assets are in tech stocks. Tech stocks are still a pivotal part of many ETF’s.

“I think tech stocks are a good place to dip your toes back into the water, that makes total sense to me. It’s their ability to access cash at very favorable borrowing levels and their growth prospects because our economy is going to grow again, and tech will be key component of where that growth will come from, ” said Phillips.

Tech stocks help Invesco QQQ Trust Series One, but Google wins stocks vs. ETF battle

Investor Kent Thune noted that Invesco QQQ Trust Series One will still has tech stocks that will help the ETF remain viable to investors and “[t]he QQQ’s inclusion of communications services stocks like Facebook (NASDAQ:FB), Alphabet (NASDAQ:GOOG) and Netflix (NASDAQ:NFLX) help ensure its viability amid growing social distancing initiatives.”

Jan Hazius, chief economist at Goldman Sachs, notes that tech ETFs may be a strong choice to survive the Wall Street volatility.

“Financial markets have started to take a more positive view of the outlook. The initial improvement was mostly policy-driven, but the greater optimism of the past week seems to be at least partly related to the virus itself, ” said Hazius.

While the Invesco QQQ is strong and contains Google stock, Google stock on its own is a stronger long-term investment based on its perseverance and future partnerships.

Kroger stock rises as shoppers rush stores

In addition to tech stocks, grocery store stocks have increased as well. Kroger (NYSE: KR) stock rose 20% when Americans rushed grocery stores. Even before the COVID-19 crisis, Kroger’s online sales increased 29% as well. Kroger’s CEO , Rodney McMullen, notes the strong sales that the grocery store chain was having recently touting the success of the stores.

“After experiencing strong sales in February, the COVID-19 pandemic triggered a significantly greater lift in sales across both physical retail stores and digital channels in March,” noted McMullen.

The TradingSim chart below shows the jump in Kroger shares.

Because of the designation as an essential service and increased hours, Kroger will increase the pay of its workers.

“Our associates have displayed the true actions of a hero working tirelessly to ensure everyone has access to affordable, fresh food and essentials during this national emergency,” said McMullen.

Kroger a strong buy after Buffett pick

Kroger is such a strong buy that Warren Buffett purchased $550 million worth of the chain’s stock. It’s unclear whether the stock surge will last after this crisis. However, after the pandemic, Kroger stock is a strong solid pick for long-term investors that want to invest in a company with growth potential.

Kroger is a solid stock with a healthy dividend that would be a good pick for long-term investors that want shares in a grocery company.

First Trust Nasdaq Retail ETF has slight gain during coronavirus crisis

A retail ETF that is performing well during this crisis is First Trust Nasdaq ETF (NYSEMKRT:FTXD). The retail ETF if performing well with stock grocery stocks like Walmart (NYSE:WMT).

The retail ETF has been performing well as many shoppers have panic shopped in the wake of the COVID-19 crisis. The First Trust Nasdaq Retail ETF has been down 19% year-to-date, but has been up 1% over the past month.

In the battle between the First Trust Nasdaq Retail ETF and Kroger, Kroeger seems to have an advantage based on previous data of more growth over the last month.

Would Fed’s buying ETF’s give them an edge?

Aside from individual comparisons, there will be a government intervention that could shake up the stocks vs. ETF’s war. The Federal Reserve will buy a series of corporate bonds through ETF’s in order to boost the stock market. Dave Nadig, chief investment officer and director of research at ETF Trends, noted that the Fed buying the ETF’s could improve ETF returns-but only for a little while.

“Short term, of course, we know what this means: buying pressure that’ll bring up the price of the ETFs,” said Nadig.

Nadig noted that the Fed purchasing ETF’s won’t be a game-changer against stocks overall. He believes government intervention won’t help ETF’s in the long run.

“I think it’s really important to understand: this is not the federal government buoying the entire market, necessarily. They’re explicitly not going to be buying ETFs that come up at a premium. So, if they manage to sort of re-establish equilibrium in the market, theoretically, that stops the purchasing and then the market can go back to resetting prices,” said Nadig.

Which stocks and ETF’s would be best for long-term investors?

The previous analysis shows that tech, consumer staples, and even gaming stocks can have long-term potential. However, tech stocks like Google appear to have the best potential for long-term investment because it’s able to evolve with new technology. Large capitalization tech stocks like Google compose about 20% of the S&P 500. They have risen since the coronavirus pandemic. Tech stocks have performed well because many workers are more dependent on computer technology.

The aforementioned Vanguard Total Market ETF has many diversified holdings and would be best for long-term investment. Even though the fund is currently struggling, it could rebound in the long run. Because it tracks the S&P 500, when the Dow rises again, the Vanguard Total Market ETF will rise as well.

Because of the growth in medical and biotech ETF’s, long-term investment in SPDR S &P Biotech ETF would be another great choice for long-term investment. Gilead could be a long-term choice because of its innovation in medicine and its potential of its COVID-19 remdesivir drug.

Stocks and ETF’s that look to the future of technology and are on the cutting edge of medicine would be the ideal choices for long-term investors.

Stocks vs. ETF’s: Who is the winner?

The previous analysis shows that there’s no clear winner in the stocks vs. ETF battle. Some stocks perform very well based on circumstances. Some ETF’s do better if they have holdings that have longevity with investors. Both stocks and ETF’s may have different performances based on the industries they cover. The performance may also vary based on how the stock market performs overall.

Investors must choose their own investment instrument based on the industry they want to invest in, the amount of involvement they want with their investment. Choosing stocks or ETF’s ultimately depends on how much risk they want to be exposed to in the stock market. Even the great investor Warren Buffett expressed an appreciation for ETF investing.

“If you accumulate a low-cost index fund over 10 years with fairly regular sums, I think you will probably do better than 90% of the people around you who take up investing at a similar time,” said Buffett.

Both stocks and ETF’s are great options for investors for different reasons. If investors want more autonomy with their stock picks and more interaction with picks, stocks may be the better choice.

If investors want more hands-off investment and want a fund manager to pick stocks, ETF’s may be a better option. Investors may also want to pick ETF’s if they want more diverse options to invest in as well.

Regardless of which investment option traders pick, TradingSim can help investors practice trading stocks and ETF’s. Investors can test the stocks vs. ETF comparison on TradingSim to make the best long-term investment choice for them.

Zoom Video Communications (NASDAQ: ZM) took off like a rocket since it went public in 2019. The videoconferencing site Zoom has become essential for workers during the coronavirus (COVID-19) crisis. With the rise of videoconferencing to keep up with friends, families, and co-workers, Zoom shares climbed 20% over the past few weeks. Along with Zoom, there are four other strong growth stocks in this article that are still solid investments in the midst of a volatile stock market. During this bear market, these stocks can potentially be a savvy investor’s source for low-risk investments.

Growth stocks are stocks that are growing much faster than other equities on Wall Street. Many of them have higher-than-average valuations. Investors can look closely at these five stocks on Trading Sim that could pump up their portfolios. This article will also tell investors what traits to look for to find stocks that have great growth potential like Zoom. The conclusion of the article will also warn about a stock that doesn’t have the same growth potential as stocks like Zoom and is cratering- retailer J.C. Penney( NYSE:JCP). The article will also note how Trading Sim can help investors find the next growth stock.

How did Zoom get its start?

The latest prominent growth stock, Zoom, got its start in 2011. Eric S. Yuan started the company in his native China. He saw Zoom as a way for companies to communicate with each other. He worked on the idea when he was a corporate vice-president of engineering at Cisco once he immigrated to the U.S. During an interview in 2017, Yuan presciently said that Zoom would help make it easier for workers to telecommute.

“Zoom gives organizations and individuals a faster way to communicate relative to audio-only, chat, and email meetings, and it’s not restricted by geography, so employees have more flexibility to work from home. Because it lets people meet face-to-face, and provides support for screen sharing, it’s truly a collaboration catalyst, and helps build teams across geographies,” said Yuan.

The company grew in a cluttered field of videoconferencing apps like Skype and GoToMeeting. Zoom grew because Yuan would personally call dissatisfied customers. In addition to Zoom’s dedicated customer service, Zoom grew because it offered a free version of the app on smartphones. into a company with a $9 billion valuation. The valuation was 48 times its sales when Zoom went public in April 2019.

How has Zoom stock performed since it went public?

After the debut of Zoom’s IPO (initial public offering), Zoom shared climbed 72% above its listed $36 IPO price. Though the stock experienced volatility in the year after going public, its last earnings report showed strength. Even before the coronavirus global outbreak, Zoom’s Q4 2020 revenue soared year-over-year to $188.3 million. The stock currently sells for 58 times revenue.

Yuan noted that the company performed well because of a “unique combination of high total revenue growth of 78% at a scale of $188 million, GAAP( generally accepted accounting principles) income from operations of $11 million, non-GAAP income from operations of $38 million, and operating cash flow of $37 million.”

Why is Zoom stock “quarantine-friendly?”

Zoom stock jumped 200% since the stock went public. The Renaissance IPO ETF noted that work-from -home apps like Zoom have survived the coronavirus-caused massive sell-off.

“Quarantine-friendly companies like remote work-enablers Slack (NYSE:WORK; +23% in February) and Zoom Video (ZM; +20%) and telemedicine provider Teladoc (TDOC; +23%) have also outperformed the broader market,” noted Renaissance.

Zoom’s popularity is because of its reliability. In contrast to other videoconferencing apps that have glitches and buffering problems, Zoom mostly manages to avoid prolonged outages. So, while there may be awkward moments of kids interrupting meetings, the livestream will always come through very clearly.

Zoom is growth stock because of accessibility

Zoom stock is also surging because of the app’s accessibility in many areas. Apple’s FaceTime is exclusively on iOS and Apple devices. However, Zoom is widely available on Android and any Apple or PC. Zoom also is not just being used by workers, but by schools to help with digital learning. The corporation has eliminated the 40-minute limit on free calls so students and teachers can remain in contact with each other. The company’s CFO, Kelly Steckleberg, noted that reliability and easy access for students makes Zoom an attractive option for customers.

“The usability and the reliability of Zoom is what has led to this incredible adoption, combined with, honestly, the generosity of Eric and his willingness to open it up especially to the schools,” said Steckelberg.

Why is Zoom stock a growth stock?

Zoom stock is also a high-growth stock because of its potential revenue growth. Bernstein’s Zane Chrane and Michelle Issacs note that if Zoom’s free users convert to paid users, there could be an explosion in revenue for the company.

“If we … assume that 75% of the active users added YTD are incremental purely due to CV [coronavirus], the massive spike in usage YTD would suggest that Zoom could get as much as $140M in incremental revenue if customers that convert to a paid plan are retained for at least a year,” said Chrane and Isaacs.

Even after the coronavirus crisis abates, Zoom stock could still a long-term option for investors. More workers are working from home, so Zoom is becoming an option for many investors. This TradingSim chart shows that Zoom stock has steadily risen and should continue to remain a buy for investors.

Why Teledoc stock is a growth stock possibility for investors

In addition to Zoom, another tech stock booming in the wake of coronavirus is Teledoc (NYSE: TDOC). The computer software company’s stock has steadily risen in the past few days. Similar to Zoom, Teledoc has been a necessary health resource for many people who want to check their health through a mobile device. The subscription-based telemedicine company was founded in 2002. The company offers virtual consultations with doctors and the stock has exploded during the recent coronavirus outbreak.

The corporation’s stock grew 30% over the past month and 400% since Teledoc went public in 2015. During the company’s Q4 2019 earning call Teledoc’s CEO, Jason Gorevic, said that Teledoc’s physicians would work with clients to weather the current pandemic. With many people under quarantine, Teledoc has been the perfect way for people to safely interact with doctors to monitor their health.

“Our clinical teams, thousands of physicians around the world, are actively working along with our commercial teams and clients to ensure that members have the most timely and relevant access to the latest information during this unfolding situation, and access to care if and when they need it,” said Gorevic. This Trading Sim chart shows mostly steady growth for Teledoc stock.

Teledoc hopes to increase customers to increase stock growth

Even before the COVID-19 crisis, Teledoc stock looked attractive because of the corporation’s partnerships with (NYSE: CVS) and hundreds of hospital systems. This growth shows that Teledoc will have a wide reach to a larger number of customers. During a recent conference call, Teledoc noted the potential to expand its customer base.

“Our existing health plan clients and self-insured clients associated with these health plans currently purchase our solution for only a small percentage of their beneficiaries in the aggregate, and we estimate this provides us the opportunity to grow our membership base by more than 75 million individuals in the United States by expanding our penetration within our existing clients alone,” noted Teledoc.

Teledoc’s profile rises with coronavirus pandemic

Lew Levy, MD, Teladoc’s chief medical officer, noted that telemedicine companies like Teledoc are vital during this current health crisis.

“We are seeing more patients, and more of those patients are experiencing upper respiratory issues. As we saw during the flu epidemic of 2018, a community’s healthcare system can become overwhelmed and virtual care can help provide needed relief,” said Levy.

During the coronavirus crisis, Teledoc is working closely with the Center for Disease Control to provide information to clients.

Levy noted that Teledoc has a “unique ability to immediately connect with the CDC and other government agencies to add the right screening tools and clinical quality protocols to our system, and most importantly, to keep patients — particularly those most at risk with underlying health conditions — out of care settings where they can face exposure.”

Netflix stock benefits from quarantine life

Teledoc benefitted from patients increasing as a result of coronavirus. Similarly to Teledoc, Netflix (NASDAQ: NFLX) stock has jumped as a result of ” stay at home” orders. The streaming service’s stock surged 8.2% over the past week. Baird Equity Research said Netflix would outperform because of two strengths. Netflix is the go-to home entertainment for quarantined Americans. The corporation is also part of a growing trend of customers abandoning cable.

Netflix has always been able to set trends since launching in 1998. The company evolved from DVD rentals to streaming entertainment in 2007. Since producing original content in 2013, the hundreds of original shows currently offered have helped Netflix 167 million subscribers worldwide. So, watching Love is Blind may actually be a smart move to boost Netflix stock.

Since going public in 2002, Netflix stock has grown 3,000%. Even with competition from Disney + (NYSE:DIS) and Hulu, Netflix subscribers grew in Q4 2019 by 20%. Netflix was a pioneer in streaming entertainment. By being first and have more options for viewers, Netflix remains a strong growth stock for investors.

Analysts see Netflix stock as growth stock

Many analysts are bullish on the stock, like Credit Suisse analyst Douglas Mitchelson. Data from Credit Suisse found that quarantined people in countries hard hit by COVID-19 are becoming devoted subscribers.

“The data in both Hong Kong and Korea present a strong case Netflix is seeing increased demand, as first-time app downloads inflected positively starting in January and continued into March,” said Mitchelson. This Trading Sim chart shows Netflix stock rising on March 11.

Rob Drury, vice-president of client partnerships for media and TV at CSM Sports and Entertainment, also believes that the global quarantine and growing customer base makes Netflix stock a growth stock.

“I‘m bullish on the impact this will have for Netflix. Their business is driven primarily by renewal rates, and on a global scale people are experiencing first-hand the benefit of Netflix’s content library. Social distancing is adding an entirely new dimension to content bingeing.”

Social distancing has been difficult for many during the coronavirus pandemic. The economic downturn has also led people to cut cable packages to only have streaming services for entertainment. However, the social distancing and cord-cutting have been beneficial for Netflix stock.

Lowe’s stock solid because of quarantine orders

Lowe’s (NYSE:LOW) stock is a safe option for beginning traders. The home improvement store has been Like Netflix, the concern about COVID-19 has helped this company’s stock rise. As more people stay at home, many are taking up home improvement projects. That desire to do DIY projects has benefitted Lowe’s shares. Wall Street experts predict that Lowe’s will have a growth stock. High earnings per share usually is a hallmark of a growth stock. Earnings per share rose to $0.94 a share in Q4 2019. Sales also jumped 2.4% to $16.03 billion. Financial analysts predict that Lowe’s earnings per share will skyrocket 15.8% over the next five years.

If investors want short-term returns, Lowe’s stock has a lot to offer investors. Lowe’s shares have grown 20% since its recent earnings report. Lowe’s stock is not only growing, but its dividend is a steady 2% payout to investors. This Trading Sim chart shows the growth of Lowe’s stock during the week of March 12.

In addition to stock growth, Lowe’s store sales performed well over the last month. CEO Marvin Ellison touted the store sales growth in the company’s last earnings report.

“I’m very pleased with the strength and productivity of our brick and mortar stores. There are very few large retailers in America delivering a 2.6% comp growth almost exclusively from the brick and mortar stores. This underscores the sales productivity improvement of our physical stores and our opportunity to unlock additional growth when Lowe’s.com sales accelerate,” said Ellison.

The stores’ sales grew as customers purchased large appliances like refrigerators to store large quantities of food. Lowe’s sales also increased as Ellison started “seeing people start to work down that to-do list and get those things done in their homes.”

Lowe’s CEO buys company shares to show confidence in stock

Ellison also said that he bought Lowe’s shares to show his confidence in the company. “I’m a believer in my company. “I’m here for the long term.”

“We think that we will create a great value and we’ll create a great opportunity for shareholder value over the long term. As CEO, if I don’t have confidence in the company, then I don’t know who will,” said Ellison.

Lowe’s stock could be a growth stock because of the current need the corporation serves during this coronavirus crisis. Big purchases like freezers and even small purchases like toilet paper have made Lowe’s a shopping destination. Lowe’s stock is also a potential growth stock because of its impending expansion into online sales.

Amazon stock a growth stock during coronavirus

Even though Lowe’s is just making a dent in online sales, Amazon( NASDAQ: AMZN) has been an online giant for years. The company has been able to adapt to change since its founding in 1996. Since Jeff Bezos founded the company as an online bookstore, Amazon has grown into an e-commerce and cloud computing behemoth. From Amazon Prime Video to its Amazon Web Services, the corporation is a tech powerhouse.

Just as Lowe’s has seen growth through sales of necessities, Amazon stock has increased through coronavirus checklist item sales. Amazon was already a powerhouse stock because of its dominance in e-commerce. Now with COVID-19 spreading worldwide, shoppers are buying supplies on the site. Popular items like cleaning supplies and even toilet paper are selling out on Amazon.com in the wake of the coronavirus pandemic.

Amazon stock is also increasing because of its grocery delivery service. Amazon owns Whole Foods, which offers free delivery to Amazon Prime subscribers. Many customers are buying groceries from Amazon Fresh, the company’s food delivery service.

Jim Kelleher, an analyst at Argus, noted that Amazon will benefit from the worldwide quarantine.

“As more and more businesses shutter or move to online operations, and more and more consumers shelter in their homes, we expect traffic on the Amazon site to increase. Certain counties with COVID-19 clusters are implementing stay-at-home policies with varying degrees of stringency. Even in communities with low or no cases, consumers are prudently minimizing interactions, including trips to retail stores,” said Kelleher.

Amazon adjusts to help workers amid COVID-19 pandemic

Amazon’s business has grown so much that it is hiring thousands of temporary workers to keep up with demand. The corporation will hire part-time and full-time warehouse workers to fulfill the high demand for shoppers’ needs.

“Because of high demand, Amazon is hiring 100,000 new workers. In addition to the 100,000 new roles we’re creating, we want to recognize our employees who are playing an essential role for people at a time when many of the services that might normally be there to support them are closed,” noted Amazon.

Bezos noted that Amazon is getting its warehouses ready to combat coronavirus.

“We’ve changed our logistics, transportation, supply chain, purchasing, and third party seller processes to prioritize stocking and delivering essential items like household staples, sanitizers, baby formula, and medical supplies. We’re providing a vital service to people everywhere, especially to those, like the elderly, who are most vulnerable. People are depending on us, ” noted Bezos.

Amazon stock still strong despite Wall Street volatility

Amazon stock recently dropped 11%, which is disappointing. However, it’s less than the overall 28% decline in the S &P. The Trading Sim chart below shows the volatility of Amazon stock.

Amazon is also a growth stock because of its dominance in varied industries. The world’s largest retailer controls most of e-commerce. The corporation is also making inroads into cloud computing with Amazon Web Services. More workers are telecommuting, so Amazon Web Services (AWS) benefits. Work-from-home apps like Zoom depend on AWS cloud computing to run, so Amazon is well-positioned as a growth stock.

Analysts say Amazon is safe haven stock

Economic analyst Jim Cramer also believes that Amazon’s stock could rise over 30% to the $3,000 range in this current climate because “Amazon Web Services must be just crushing it.”

Stock analyst Jason Helfstein noted that Amazon is a stock that will outperform other equities. He noted that Amazon’s grocery and e-commerce delivery sector will help quarantined customers.

“COVID-19 is driving widespread demand for essentials, combined with increased e-commerce usage from ‘social distancing’ and ‘shelter-in-place’ programs. While some items are taking longer to be delivered, and grocery delivery capacity is strained, we think Amazon is seeing record consumer demand, with share gains likely to remain post virus,” noted Helfstein.

Amazon is a growth stock because of the company’s versatility. Amazon is able to adapt to any online shopper’s needs and to provide cloud computing to stay-at-home workers.

How to spot growth stocks like Zoom

Growth stocks aren’t just trendy pump-and-dump stocks that are here today and gone tomorrow. Many growth stocks that trade as much as 10 times their IPO price can follow current trends, like Zoom. However, Zoom stock is likely to be a growth stock even after the stay-at-home orders come to a close. Zoom is part of a technology that is a staple in work life, so that corporation’s stock is likely to increase. Growth stocks often start as trends, but grow into blue-chip stocks to add to portfolios.

Growth stocks fulfill new needs as game changers

Stocks with high growth potential can outperform more established stocks by fulfilling needs or creating innovative products. Corporations like Teledoc are meeting a need for telemedicine in this time of people being socially distant from each other. Just as Amazon created a new world of e-commerce, many growth stocks evolve from unfamiliar new technology to a pivotal need for consumers. Even established brands like Lowe’s can have shares become growth stocks by rising during seasonal events.

While many investors may see tech stocks as the main growth stocks, online retail can see growth as well. With many people abandoning physical stores, many shoppers are turning to tailored subscription services like Stitch Fix (NASDAQ:SFIX). Any company in an industry that has any innovation or generates interests from consumers is sure to earn a look from investors.

Growth stocks have high earnings- and higher P/E’s

In addition to filling needs for consumers, companies with growth stocks have good earnings reports to please investors. Many growth stocks have high price-to-earnings ratios above 16. Netflix’s price-to- earnings(P/E) ratio is well above that. The streaming service’s stock is valued at 87 times its past year earnings. Amazon’s Q4 2019 sales surged 21% year-over-year to $87,4 billion. On the strength of diversified services the retailer offers customers, Amazon stock is the epitome of a growth stock with its explosive expansion over the past 20 years. Growth stocks usually have two or more consecutive positive earnings reports that show that a corporation has the potential for expansion.

If investors can’t afford Amazon stock, they still shouldn’t invest in risky cheap stocks like penny stocks unless they can withstand the volatility. Investors shouldn’t see penny stocks as growth stocks unless they want to start with low-cost stocks to add to their portfolios.

Many growth stocks have positive cash flow

Growth stocks like Zoom also have a lot of available cash on hand. Zoom has $855 million in cash and investments in reserve. Many growth stocks may have debt, but have a large cash reserve. In its Q4 2019 earnings report, Zoom’s operating income increased 292% from Q4 2018 to $38.4 million. Many growth stocks have to have available cash to weather any storms in the volatile stock market.

Even though Netflix is in millions of dollars in debt to pay for original content, the corporation still has billions on hand. As of Q4 2019, Netflix had $5 billion in available cash. That’s a 32% year-over-year increase.

While growth stocks usually don’t pay a dividend to investors to increase growth, some do both. Lowe’s pays dividends to investors unlike many other growth stocks. However, like many other growth stocks, Lowe’s participates in stock buybacks to reinvest in their companies.

Tom Plumb, money manager at Wisconsin Capital Management, says that tech companies with a lot of cash on hand will have profitable stocks.

“The companies taking in a lot of cash because of their disruptive business models and technologies and their focus on how money is spent and where it is spent, are showing no signs of abating,” he said.

Growth stocks start in U.S., but expand globally

While many growth stocks started in California’s Silicon Valley, but expand around the world. Netflix has 167 million subscribers, but only about 60 million of them are in the U.S. Out of the hundreds of shows offered, many are from India and Nigeria. Those two countries have billions of potential new customers. Netflix is expanding its global outreach to increase the value of its stock.

Amazon is moving to expansion in Brazil and Canada to increase profits. Many growth stocks expand globally after first starting in the U.S. to reach new consumers. By reaching out to international customers, growth stocks have increased potential.

Even before the coronavirus pandemic, Teledoc purchased a French telehealth company to help reach more patients. Now the global expansion is helping Teledoc stock soar. Carlos Nueno, president of Teledoc Health International, touted the acquisition of MedicinDirect.

“With a continued focus on our global expansion, we will now become the market leader in France with the ability to have an immediate impact on healthcare delivery in the country. On the successful foundation built by MédecinDirect, we will bring our full suite of virtual care services to multinational clients who have been eager to expand,” said Nueno.

Growth stocks test an investor’s patience

Growth stocks tend to be focused on the future potential of stocks. While value stocks can capture a company’s current value, investors that focus on growth stocks tend to focus on potential growth. While value stocks are profitable today, many investors think growth stocks will continue to be profitable in the future.

As opposed to value stocks that are undervalued, growth stocks can be overvalued. Investors will likely have to wait out the volatility of growth stocks, some of which are often new to the Dow Jones.

If investors need the money in the stock market within five years, then growth stocks are not for them. Growth stocks tend to require more patience, so investors need to let the money from growth stocks stay in their portfolio in the long run.

Exercise caution when investing in growth stocks

While growth stocks may want investors to rush in, they should be cautious. They shouldn’t invest only in growth stocks. By diversifying, investors don’t have to depend on growth stocks to increase an investor’s profits. A mixture of growth and value stocks can make a more well-rounded portfolio.

Investors also shouldn’t pour too much money into growth stocks because of their volatility. Investors should start small and only invest up t0 3% of their portfolios on growth stocks. Economic expert Tom Engle noted, “If this company is the next great growth stock, then a little is all I need. If it’s not, then a little is all I want.”

While investors may want to go full- speed ahead on a growth stock, it’s best to slowly wade into investing in the stock. If there is volatility in the stock’s industry or on Wall Street, investors can withstand it with their portfolios intact

Why J.C. Penney is the opposite of a growth stock- it stayed behind trends

While Zoom is a cutting-edge stock with huge growth potential, J.C. Penney is on the exact opposite end of the spectrum. Zoom is a relative newcomer to Wall Street, while J.C. Penney has been offering stock for almost a hundred years. The retailer has been struggling for years because of its inability to adapt to change.

The store took too long to offer e-commerce to consumers. As a result, other brick-and-mortar competitors like Target ( NYSE: TGT) scooped up shoppers looking for sales online. Growth stocks often are looking for what’s new, now, next- but J.C. Penney was still stuck in the past. Instead of investing in online sales, J.C. Penney spent millions on stores in malls. But who shops in malls anymore? Everyone gets their favorite pants (or dress) from online retailers like Amazon now. J.C Penney is the exact opposite of a growth stock because the company didn’t have any innovation in its sales strategy or business model. Amazon evolved to cater to shoppers’ needs, unlike the brick-and-mortar retailer.

Companies with growth stocks listen to consumers- J.C. Penney didn’t

Unlike tech stocks that conduct focus groups that listen to consumers, J.C. Penney made many changes without consulting consumers. By abandoning loyal bargain shoppers and not offering coupons anymore, J.C. Penney lost a lot of customers. Zoom often listens to its customers and asks customers for feedback.

As Zoom noted when it reached 10 million participants in 2014, customer service is key to create a growth stock.

“We have a relentless focus on making the best product with the best user experience. This is ultimately what every customer wants. Toward this end, we spend much of our time listening to customers and fine-tuning our software to fit their needs,” said Zoom.

Companies with growth stocks often reach out to customers and stay loyal to their main customer base. J.C. Penney didn’t listen to its customers- and the stock suffered as a result.

Growth stocks have a clear niche unlike J.C.Penney

Growth stocks like Amazon have a clear identity of being the world’s online retailer. With competition from Amazon, J.C .Penney lost its niche as a retailer.

Neil Saunders, an analyst at GlobalData Retail said that the rise of Amazon led J.C. Penney to have a “lack of understanding about what it is, what it stands for, and who it wants to serve”.

Bob Phibbs from the Retail Doctor, also said J.C. Penney lost its identity by neglecting its core shoppers- moms ( or dads) on a budget.

“These companies are so busy trying to figure out who their shoppers are — Is it moms? Is it millennials? — that they’ve lost their most loyal shoppers. Plus the customer experience is forgettable. Nobody is going into a J.C. Penney and saying, ‘You’ve got to see this place. It’s great.’ ”

This Trading Sim chart shows how far J.C. Penney stock has fallen since its last earnings report.

While bargain-hunting shoppers knew to turn to Amazon or Target, J.C.Penney was forgotten and its stock had plummeted to only about $1 a share. Companies with growth stocks often fill a specific niche and know how to stand out among competitors. J.C. Penney doesn’t have that advantage. J.C Penney’s stock is down so low, it might be delisted from the New York Stock Exchange. Not having a clear identity confuses consumers and investors.

J.C. Penney has no cash available to grow stock

As J.C. Penney tried to get customers back, it burned through a lot of cash- a warning sign that a stock is bound to fail. Many growth stocks have a lot of cash on hand to reinvest back into the corporations. However, stocks that are tanking often are in too much debt with no chance at profitability. J.C. Penney is about $4 billion in debt and has had to close hundreds of stores nationwide. J.C. Penney only has $386 million of available cash. In contrast, growth stocks have a lot of cash on hand to weather Wall Street volatility.

Growth stocks like Netflix has debt, but also has a positive net income of $1.9 billion in 2019. While there is no one magic way to predict a growth stock, the contrast between J.C. Penney shares and other stocks show a clear contrast. Investments in innovation, growth in profits, and of course, a rising stock.

J.C Penney is a cautionary tale about stocks and corporations. Companies have to innovate or serve a niche need in order to increase their influence with investors. Corporations like Zoom are shaping the present and are building a strong future. On the other hand, dinosaur retailers like J.C. Penney are falling because it fell behind the times and couldn’t turn a profit.

Research is key to picking growth stocks

If investors want to learn more about how to pick the best growth stocks, thorough research is best. Investors can investigate earnings reports, stock price movements, and more through Trading Sim. With Trading Sim’s expert analysis and platforms to analyze stocks, investors can make wiser stock picks. Investors may even be able to spot the next growth stock with Trading Sim’s guidance and analysis.

Zoom and other growth stocks show that by being innovative leaders or filling niche needs, investors can see an increase in their portfolios.

Tracking growth stocks can be complicated, but studying Trading Sim’s charts can help investors keep track of which stocks are rising like Zoom and which ones are plummeting like J.C. Penney. By simulating trades first, investors can test out Trading Sim’s theories about what creates a growth stock. Trading Sim’s trading platforms can help investors possibly find the next potential growth stock.

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