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Value stocks can seem like a bargain to investors, but can become a valuable part of an investor’s portfolio. This article will explain what value stocks are, how they differ from growth stocks, and how TradingSim can help investors find the top 10 value stocks to invest in.

What is a value stock?

A value stock is a bit like a stock on sale. Value stocks tend to trade at lower prices than other stocks. In addition to being cheap, value stocks tend to have less-than-average growth than other stocks. They also tend to have low valuations in relation to earnings and cash flow.

Value investing can be a great choice for risk-averse investors who want to slowly wade into the investing waters. Value stocks also tend to have dividend payments to investors every quarter. Also, with the Dow Jones in such volatility, these value stocks could be a safer alternative to faster-paced growth stocks.

How is a value stock different from a growth stock?

Here are some differences between growth stocks and value stocks. The comparison of value stocks versus growth stocks shows vast differences.

Growth stocks usually

have high valuations. Tech stocks, like Amazon (NASDAQ:AMZN), often have a sky-high valuation in the billions. Amazon has a record-shattering $1 trillion valuation.
have high P/E ratios. Growth stocks usually have a P/E ratio of 16 and higher. Netflix’s ( NASDAQ:NFLX) P/E ratio has skyrocketed to trading for 86 times its earnings.
steadily rising stock prices. Growth stocks like Zoom ( NASDAQ:ZM) have stock prices that surged 200% above its listed IPO price of $ 36 per share.
strong growth rate. Many growth stocks have better-than-average projected future earnings. Growth stocks also tend to outperform the overall S&P 500.
more available cash flow. Easily available cash flow is usually a sign that a company has a growth stock.
don’t pay dividends to investors. Growth stocks from corporations tend to reinvest money back into corporations. They don’t usually offere quarterly dividends to investors.
many growth stocks are in tech or other growing industries. Teledoc (NYSE: TDOC) is a growth stock that rose 18% just over the past month. The telehealth company is successful because of its innovation in medicine. Teledoc’s stock is also performing well because of its timely use by patients during the coronavirus crisis.
riskier for investors. Growth stocks can rise higher than the overall market, but can fall faster into a bull trap when the market declines into a bear market as well.

Value stocks are less volatile than growth stocks

In contrast to growth stocks, value stocks usually

have low price-to-earnings ratios (P/E). Value stocks, like MetLife(NYSE:MET) have a rock-bottom P/E ratio of 5.10. Life insurance stocks often have a low P/E ratio below 16.
have a slower growth rate in more established industries. Growth stocks tend to increase quickly in innovative new fields. Tech stocks, like Tesla (NYSE: TSLA) especially, may have wild swings on the stock market because of production issues ( or Elon Musk’s comments). However, value stocks usually grow at a slower pace and are in industries that have been around for decades. BP(NYSE:BP) is a giant in the oil industry and is a value stock with less drastic change in its stock price.
pays dividends to investors. In addition to BP, another oil stock, Chevron (NYSE: CVX) is a high-paying dividend stock. Chevron pays investors a 7.5% dividend to investors.
are undervalued. Semiconductor maker Qualcomm(NYSE: QCOM) has undervalued stock because it’s overlooked, but will be vital to the future. Even though Qualcomm stock is in the $66 range, the stock should rise soon. Since Qualcomm is making chips that will be used in 5G technology, the corporation’s stock will likely benefit from this in the future.
are less risky than growth stocks. Value stocks are usually less volatile and have steady returns for investors. Even though IBM (NYSE:IBM) stock has dropped, the stock is still a solid value stock. IBM is moving into cloud computing with its acquisition of software company Red Hat. The stock will likely remain a safe bet for investors who are looking for value stocks.

Top 10 Value Stocks for Investors

For investors that want low-risk investing , this value stock list has venerable stocks that have high-yield dividends. Here are 10 stocks that are some of the top value stocks to add to a portfolio.

1. Berkshire Hathaway

Warren Buffett is the OG investor and his Berkshire Hathaway (NYSE:BRK-A) and (NYSE:BRK-B) is the top value stock on Wall Street. The Oracle of Omaha has been choosing stocks since the Beatles were a new group. His conglomerate has chosen some of the best value stocks to invest in, and Buffett’s corporation itself is a must-pick stock.

Berkshire Hathaway started in 1929, but didn’t become a viable company until Buffett took over the corporation in 1965. His investment strategy was to buy undervalued companies, then let them grow. As a result of value investing, Buffett’s fortune has grown to almost $70 billion.

Former hedge fund manager Whitney Tilson says Berkshire Hathaway is a top value stock because of Buffett’s wise choices.

“I’m being even more conservative because I’m not factoring in the value Warren Buffett will likely create as he puts his $128 billion cash hoard to work amidst this chaos: buying back his own stock in size, buying other stocks, and negotiating deals with desperate companies,” said Tilson.

“It’s an incredible collection of high-quality businesses… it’s run by the greatest investor of all time… and it has the ultimate, Fort Knox-like balance sheet: $128 billion in cash and short-term investments, $19 billion in bonds, and roughly $200 billion in liquid, blue-chip stocks,” added Tilson.

This TradingSim chart shows Berkshire Hathaway’s trajectory the week of March 19, 2020.

Berkshire Hathaway has a low P/E ratio of 5.46, which makes the company’s undervalued shares a value stock for investors. While most value stocks offer dividends, Berkshire doesn’t. Buffett noted that he’d rather reinvest in his companies to improve the efficiency of his investments. For investors interested in value investing, Berkshire Hathaway is a must.

Buffett only buys stocks he likes for the long haul

Berkshire Hathaway is a value stock because of its investment in other blue-chip stocks. Buffett is known for his quotes about cautious, long-term investing. One quote about long-term investing is especially timely with the stock market slowing down now:“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

Buffett also loves to quote Benjamin Graham, the father of value investing. “Long ago, Ben Graham taught me that price is what you pay; value is what you get. Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down,” said Buffett.

Buffett doesn’t just chase trading trends. He only invests in companies he believes in for a long time. Even though his stock picks may seem too safe, they pay off in the long run. His recent $549 million investment in Kroger grocery stores in February has been very savvy. The recent run on grocery stores like Kroger during the COVID-19 pandemic has made Berkshire Hathaway’s investment a good buy. Buffett has the Midas touch when it comes to picking stocks. His time-tested value investing in top corporations make Buffett’s Berkshire Hathaway a top value stock.

2. Apple

One of the value stocks that Berkshire Hathaway invests in is Apple (NASDAQ:AAPL). The tech giant is a value stock because of its lower-than average P/E of 20. For the largest tech company in the world, Apple is ironically undervalued compared to other tech stocks like (NASDAQ:FB). Even though Apple is a tech company, it’s also seen as a hardware company since it produces iPhones and Apple Watches.

The company has a hallmark of a value stock, strong earnings reports. Apple’s last earnings report saw the company earn a record- shattering $91.8 billion. Apple’s ample cash glow gives the stock a characteristic of a growth stock. However, the company’s $58.9 billion in cash flow in fiscal year 2019 helped pay its $14.1 billion dividend payout to investors. That’s an impressive 6.5% yield. Apple is a reliable value stock that investors should add to their portfolio.

Coronavirus will impact Apple, but stock will bounce back

The COVID-19 crisis has hit every corporation, especially Apple. Many Chinese factories that make Apple devices have been shut down in February. However, the pandemic is slowing in China and factories are starting to reopen. Apple is also set to launch its 5G iPhone in the fall, which should help Apple stock recover from its current losses. Apple recently noted that even though iPhone sales are down in China, there is still growth in sales in other countries. This TradingSim chart shows the volatility in Apple’s stock.

“Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations, ” said Apple.

Wearables make Apple a value stock

Even though Apple stock is currently down, Apple devices are still going strong. Many homebound people are Facetime on their iPhones and iPads to stay connected to each other (and to the games they’re addicted to playing). Apple Watches and other wearable device sales rose 17% in 2019. The ability of Apple to innovate in technology gives value investing in Apple a benefit to investors.

Craig Johnson, chief marketing technician at Piper Sandler, said Apple is still a value stock because of customer loyalty. He noted that even through the last economic downturn 10 years ago, customers still bought iPhones.

“People are still going to step up and they’re going to buy the iPhone. You know, when this gets relaunched and gets released for the 5G iPhone, they’re going step up and buy it. We saw the iPhone get released in 2007 and 2008 in the middle of the crisis there. Consumers still were able to open their wallet and buy these things,” said Johnson.

Apple can withstand the current market volatility and COVID-19 crisis because of its ample cash flow, innovative new products, and a devoted customer base.

3. Coca-Cola

Another value stock Buffett believes in is Coca-Cola( NYSE:KO). Buffett owned the stock since hip-hop was a new category of music. The soft drink company is a value stock because of its high dividend and its steady cash flow. Coca-Cola made billions by selling its soda. Then the corporation pivoted to sales from water and low-calorie drinks and increased sales. The beverage company’s earnings for Q4 2019 were $9.07 billion and the stock rose 22% over the past year. However, CEO James Quincey noted that Coca-Cola has been negatively impacted by the coronavirus pandemic.

“The supply chain is creaking around the world. There are flash points when it’s getting a little harder to get ingredients through, whether it’s delays at the borders, the big changes in channel mix,” said Quincey.

The corporation also noted that the 2020 guidance would be impacted by restaurant closures and sport events cancellations. Coca-Cola sells many of its beverages in dining establishments and during games.

“[S]ince our last guidance update, local market policies and initiatives to reduce the transmission of COVID-19 have significantly increased. These initiatives include the direction to refrain from dining at restaurants,” said Coca-Cola.

However, Quincey noted that Coke’s workers are “doing a great job at adapting” to the changes brought on by COVID-19.

Coca-Cola dividend consistent for investors

The company’s dividend may be small at 3.5%, but it’s very consistent. The dividend has risen for an astonishing 57 straight years. For a value stock that proves that slow and steady investment pays off, investors should choose Coca-Cola.

4. ExxonMobil

In addition to Coca-Cola and Apple, ExxonMobil ( NYSE:XOM) is an established value stock for investors for many reasons. One reason investors can pick ExxonMobil to implement their value investing is its well-paying dividend. ExxonMobil had $6.6 billion in free cash flow last year. The oil corporation paid $14.6 billion in dividends to investors in 2019. Like many value stocks, ExxonMobil is an undervalued stock that has a high-yield dividend of $3.48 per share. That’s an impressive 9% dividend for investors.

ExxonMobil will survive oil crisis

ExxonMobil has been hit by two crises. The ups and downs of the stock market has affected the Dow Jones overall. However, oil companies have been rocked by the decline in oil prices. Saudi Arabia is overproducing oil to drive down prices and spite rival producer Russia.

As a result, the volatility of the stock market and oil prices have dropped to about $30 a barrel. ExxonMobil CEO Darren Woods announced that ExxonMobil will reduce capital expenditures to reserve its cash flow.

“Based on this unprecedented environment, we are evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term. We will outline plans when they are finalized,” said Woods. This TradingSim chart shows ExxonMobil’s stock trajectory over the past few weeks.

Despite the reduction in spending, Woods said ExxonMobil will survive the current uncertainty in the oil industry. With refinery expansion around the world, ExxonMobil is poised to recover from this current setback.

“We are confident that we will manage through these challenging times by taking deliberate action to keep our people safe, our environment protected and our company strong,” said Woods.

ExxonMobil is a value stock before oil companies recover

ExxonMobil is a bargain value stock for investment. Investors could buy the stock while the oil industry is in turmoil. Then they could reap the benefits when the economy and oil industry recovers. Oil will likely bounce back above $30 a barrel if Saudi Arabia compromises with Russia and other oil-producing countries in OPEC ( Organization for Petroleum Exporting Countries) to reduce its oil output. If the economy recovers, the oil company will rebound and ExxonMobil will remain a value stock.

5. Johnson & Johnson

Just as ExxonMobil has been an established stock for almost a century, Johnson & Johnson (NYSE:JNJ) is another value stock with longevity. The multinational corporation has been around for a century and has been a reliable stock for value investors. The company’s stock pays a healthy 2.6% dividend and increases every year. The corporation has survived a scandal about asbestos in their talcum powder to remain a value stock. For investors that want a safe value stock, Johnson & Johnson is a safe pick-especially in the wake of the coronavirus outbreak.

Johnson & Johnson stock rises on coronavirus vaccine hopes

The world’s biggest healthcare product producer is racing to create a vaccine for COVID-19. The company has signed a $1 billion deal with the U.S. government to create 1 billion doses of a possible vaccine for the respiratory disease. Johnson & Johnson CEO Alex Gorsky expressed optimism that the company can create an effective vaccine to slow the disease.

“We have very good early indicators that not only can we depend on this to be a safe vaccine base but also one that will ultimately be effective based on all the early testing and modeling we’ve been doing. This is a bit of a moonshot for J&J going forward, but it’s one we feel is very, very important for use to be doing at this period in time,” said Gorsky.

Johnson & Johnson stock the week of March 19

Johnson & Johnson said in a statement that it “is committed to bringing an affordable vaccine to the public on a not-for-profit basis for emergency pandemic use.”

The hope of a vaccine has raised investors’ confidence in the stock. Johnson & Johnson stock has jumped 8% as a result of the news. Johnson & Johnson’s stock shows that an established company can weather any storm and persevere. By providing medical devices and other badly needed products during this health crisis, Johnson & Johnson has proven to be a value stock that will withstand Wall Street volatility.

6. JP Morgan Chase

Just as Johnson & Johnson is a health product institution, JP Morgan Chase (NYSE:JPM) is a banking institution that has a value stock. Chase’s P/E ratio is 8.68, making it an undervalued stock that’s perfect for value investing. Chase had a positive earnings report in Q4 2019 with profits of $8.52 billion. CEO Jamie Dimon said in a statement that the company can withstand Wall Street’s ups and downs.

“While we face a continued high level of complex geopolitical issues, global growth stabilized, albeit at a lower level, and resolution of some trade issues helped support client and market activity towards the end of the year,” said Dimon. This TradingSim chart shows the volatility of Chase stock during the week of March 19.

Chase stock has also been helped by the Federal Reserve injecting $1 billion into banks as part of the Fed trying to revive the economy. With that security, Chase can loan more to customers. Customers themselves will need to take out loans more than ever with the struggling economy. Before the coronavirus crisis, Chase was opening more branches and investing more in banking apps. Now the bank can be an option for consumers during this time of economic uncertainty. Chase is a top value stock for investors looking for a solid bank stock to add to their portfolios.

7. Walmart

While many banks have value stocks, the nation’s biggest retailer also has a reliable value stock. Walmart(NYSE:WMT) has succeeded by selling many essential products and become a value stock because of its strength during the COVID-19 crisis. The nation’s largest big-box store was a top stock to financial experts like Jefferies analyst Christopher Mandeville. Even before the coronavirus pandemic, Mandeville praised Walmart for its financial strength.

“WMT[Walmart] exhibited just how well the company is leveraging its physical scale/digital presence and financial stamina to push the boundaries of retail, using innovative tech and learnings from abroad. With clear momentum in grocery and a sustainable productivity loop in place, WMT[Walmart] now pivots to better general merchandise, one item alongside enhanced fulfillment practices that is critical to long-term e-com success,” said Mandeville.

Walmart thrives during COVID-19 outbreak

After the COVID-19 outbreak,Walmart has become an essential resource by staying open during the pandemic.

Walmart CEO Doug McMillon noted that the corporation has seen e-commerce sales grow by 35% over the last few months.

“We continue to see good traffic in our stores. We’re growing market share in key food and consumables categories, especially with its online grocery delivery service. including fresh,” said McMillon.

Goldman Sachs analyst Kate McShane noted that Walmart will help customers by keeping stores open and by delivering groceries as well.

“In the short term, we expect demand to remain robust, even if panicked buying subsides, given the companies’ mix of essential/grocery. Further, these stores will likely remain open (versus over half of retail in the U.S. that is currently closed), even in states that have “shelter in place” rules,” said McShane.

Walmart dividend makes stock attractive to investors

Like many value stocks, Walmart has a well-paying dividend for investors. Walmart’s payout to investors tops 2% and has steadily increased for an impressive 47 years. Walmart’s consistent dividend payouts make the retailer’s stock a stable value stock for investors.

8. AT&T

AT&T(NYSE:T) is another top pick for value investors. The telecommunications company has been a great value stock. The corporation is a “dividend aristocrat” that consistently raises dividend for investors every year. The current yearly payout to investors is a hefty 6.5%.

AT&T also will keep many of its stores open during the coronavirus pandemic. The corporation said that it’s critical for customers to stay connected during the quarantine orders nationwide.

“Connectivity is always essential to our customers — doctors and nurses, first responders, governments, banks, grocery stores, pharmacies, and others delivering vital services.”It’s even more critical during a public health crisis that’s challenging everyone. In fact, as a critical infrastructure provider, AT&T views it as our civic duty to step up and keep our customers and communities connected,” said AT&T.

5G technology and streaming could help AT&T stock

The lastest Wi-fi technology could also help boost AT&T stock. 5G technology will soon come to many phone customers that subscribe to T-Mobile ( which is owned by AT&T) could benefit from having 5G devices. With faster streaming on devices, AT&T could have a lock on the 5G market once the technology takes off.

In addition to 5G technology, AT&T stock could rise once it enters the streaming wars. The corporation plans to launch HBO Max, which will fan favorites like Friends and The Boondocks. When the service debuts in May, HBO Max could help AT&T stock grow if gains a lot of viewers. AT&T stock could rise after launching the streaming service. AT&T stock could be ideal for value investors looking for a long-established stock pick.

9. Disney

Just at AT&T is evolving to meet new communications needs, Disney is adapting to new forms of entertainment. The entertainment conglomerate has been struggling during the COVID-19 crisis because of the closure of its theme parks. However, Disney+has been a bright spot for the corporation. The streaming service has attracted 28.6 million subscribers since its launch in November. The international expansion of Disney+ in Europe should help the corporation’s earnings in the long run. Minal Modha, consumer research lead at Ampere Analysis, noted that Disney has to appeal to kids that love Frozen 2 and adults who want to binge watch Star Wars: The Mandalorian.

“It will now be key for Disney to ensure it retains these customers with a mix of new Disney Plus originals and new release movie titles,” Modha said in a statement. “Furthermore, while there is still room for growth among both the two core demographic groups, it will be imperative for Disney Plus in the longer term to broaden out its content offering to appeal to a wider audience.”

Hulu, another Disney-owned streaming service, is also an area of growth for the company with 30 million subscribers. Even though many sports events are canceled, ESPN+ still has 6 million subscribers. With many people being quarantined, Disney’s popular movies can enjoy a greater audience and possibly increase its stock price.

Disney dividend is no Mickey Mouse amount

Disney can be a daily stock pick for investors because of its ability to withstand the current Wall Street volatility. The corporation’s dividend payout is consistent for investors. Because Disney’s net income grew to $10 billion in 2019, its dividend payout to investors is 1.8%. While that figure is smaller than other companies’ yields, it’s still a steady increase year after year. Disney stock is a top stock pick for value investing.

10. Weight Watchers

Another value stock may be the least likely. Weight Watchers(NYSE:WW) isn’t just for your fluffy Aunt Margaret anymore. The company has grown from a weight-loss company predominately for women to a wellness company for all genders. Since Oprah purchased 5 million shares of Weight Watchers, the company has added 6 million more subscribers. “The Oprah effect” of her magic touch helping businesses has helped Weight Watchers.

Weight Watchers has also evolved because of its new marketing campaigns to reach more male customers. DJ Khaled has become a spokesperson and another one- big male superstar, that is- is aligning with the brand. The Rock joined Oprah on her Weight Watchers tour to promote the rebranding of the corporation. The revamp to focus more on holistic health instead of weight loss appears to have worked. Chief Financial Officer Nick Hotchkin, said that tour helped drive Weight Watchers awareness up with potential customers. The success also drove the corporation’s earnings up to $29 million in its last earnings report.

“We believe this high visibility has had a halo effect well beyond those who are in the audience.In addition, the tour helped reinforce our brand transformation, showing how WW is your partner in both weight loss and wellness. Member recruitment so far in 2020 has been well above the prior year, as expected, and is reflected in revenue and earnings growth guidance for full year 2020,” said Hotchkin.

Weight Watchers may benefit after quarantine

With many people cooped up inside and stress eating during the quarantine, Weight Watchers could benefit after the nationwide quarantine ends. When the COVID-19 crisis passes, people will be eager to be more active and become healthier. Morgan Stanley analyst Lauren Cassel says that Weight Watchers could add more subscribers after the end of the nationwide quarantine.

“Once the ‘cocoon’ phase ends and shelter in place measures are raised, we[Morgan Stanley] see WW as a potential beneficiary of changes in consumer behavior. We anticipate a heightened focus on health, wellness, and weight loss after weeks of gym closures, stress eating, and limited physical activity.”

In addition, Cassel said that “the extent to which existing subscribers are currently showing greater interest and spending more time engaging with the app during the cocoon phase could lead to better retention curves for these subscribers over the medium term, which we incorporate into our $47 Bull case valuation. Bottom line, we think WW’s value proposition is actually stronger post-COVID-19 than it was before,” Cassel said.

“WW’s value proposition is actually stronger post virus than it was before”, said Cassel.

Weight Watchers stock the week of March 19

The wellness company has had its stock rise 17% last week while the S&P only gained 11%. Weight Watchers can be an affordable option for investors who want to cash in on wellness.

Weight Watchers stock is a bargain for investors

The wellness company is undervalued and is selling for only 8 times its earnings. The stock will likely continue to rebound and be a great pick for value investing. Unlike other value stocks, Weight Watchers stock doesn’t pay a dividend. However, Weight Watchers stock is a value stock that investors can choose if they want a stock that is capitalizing on the wellness trend.

Value stocks are safe stocks in volatile stock market

Value investing may seem boring, but can pay off in the long run. In this time of economic instability, value investing can be a great way for investors to build a slow and steady growth in their portfolios. Growth stocks and cryptocurrencies may get more attention, but value stocks can stand the test of time. For investors taking a long-term view and that can exercise patience, value stocks are a safer option.

Diversification is key in value investing

Even though many value stocks are in similar established fields, there is still room for diversification. Value investing can consist of investing in life insurance stocks, bank stocks, and even tobacco stocks. Altria (NYSE:MO) is a long-established stock that offers a strong dividend. By diversifying a value stock portfolio, investors can get bigger returns in their investments. If the bank industry is struggling, diversification in another field can help create a healthier portfolio.

Conduct research before investing in value stocks

Research is important to find the best stock for investors. By using TradingSim’s analysis and trading simulations, investors can find the best value stocks for them. Investors can take advice from Warren Buffett, but ultimately have to decide for themselves what value stocks are best for them. With TradingSim’s charts and guidance, value investing can be rewarding- and maybe even profitable.

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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