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Nikes and Winnebagos Are Winners in Post-Covid-19 World, BMO Says

Nikes and Winnebagos Are Winners in Post-Covid-19 World, BMO Says

People who embraced new habits during virus lockdowns while working out of their home offices are creating a new set of stock market winners and losers, according to Bank of Montreal.

Companies that are placed to outperform include Nike Inc., campervan maker Winnebago Industries Inc. and home improvement website ANGI Homeservices Inc., analysts including chief investment strategist Brian G. Belski wrote in a note dated June 17.

“As society begins to open up, the question remains whether these lifestyle changes will last after the pandemic is over,” the note said. “The digital transformation of society has reshaped many aspects of consumers’ lifestyles with respect to fitness, health, travel and retail, and we believe this trend will most likely persist.”

Nikes and Winnebagos Are Winners in Post-Covid-19 World, BMO Says

Technology stocks have emerged as early winners as markets recover from the deepest economic shock on record, propelling the Nasdaq-100 Index to an all-time high last week. Meanwhile, industries such as hotels and airlines have lagged behind, with S&P gauges of each sector down more than 40% apiece.

“In the very near term, drivable local trips to vacation rentals will ease shell-shocked travelers back into adventure,” BMO’s note said, rating Winnebago the only outperformer among its coverage under the travel and tourism theme. Since bottoming out in March, the stock is up 229%.

Some traders on the commission-free brokerage Robinhood appear to have taken notice of the stock surge, according to positioning data on Robintrack.net, a data aggregator which has recently become a popular window onto retail investor activity. Accounts owning Winnebago shares, though low relative to others named in the report such as Nike, Amazon.com Inc or Activision Blizzard Inc, have almost tripled since the start of the year, from 610 to 1785.

Nikes and Winnebagos Are Winners in Post-Covid-19 World, BMO Says

Nike should outperform amid a lasting shift toward “work-out from home,” the note said. Gyms with business models that rely on members continuing to pay subscription fees for services they fail to actually use -- like Planet Fitness Inc. -- are also placed to benefit even if the sector as a whole suffers, the note said.

Relocation out of cramped metropolitan areas to avoid close contact with potential virus carriers on public transport should favor companies like Boyd Group Services Inc., which operates automobile collision repair centers, the note said.

“City dwellers, living in smaller, confined spaces, have left their homes during the crisis, opting for suburban areas that offer more space for their families,” the note said. “With the lockdown being extended and summer months approaching, there is an increasing possibility that future plans of those who have left may not include moving back.”

©2020 Bloomberg L.P.