Most of us have been spending a lot of time at home lately, and investors are starting to notice. We've seen the obvious names soar in recent weeks, as video streaming services, videoconferencing platforms, and even gourmet meal-kit providers take off.
Now let's take a look around. There's something to be said about everything from flooring to furnishings to exercise equipment that you're leaning on more than usual these days.
Trex (TREX 2.15%), Sonos (SONO 0.65%), Lovesac (LOVE 4.89%), Peloton (PTON 9.43%), and Sleep Number (SNBR 3.61%) are some of the companies making life easier during this phase of the coronavirus pandemic. Let's get into why you may want to bring some of these stocks home to your portfolio.
Image source: Trex.
Trex
Fresh air means everything these days, and it's a blessing if you have a nice enough backyard to safely explore the great outdoors. Trex is the leading maker of wood-alternative decking, the eco-friendly stuff that's far easier to maintain than wood for your patio-based escapades.
Trex was rolling heading into this year's interruption, even hitting an all-time high in early March when the market was reeling on coronavirus concerns. Another monster quarter in late February helped it defy gravity -- at least initially. Net sales rose 18%, with earnings per share soaring 42% for the period. At the time, Trex was targeting strong double-digit growth for the entire year.
Folks with rotting wood decks are probably considering paying up for a Trex redo, especially now as springtime thaws out the wintry chills. The one challenge for Trex at this point could be that customers may have a hard time getting a pro to help with installation, but if any incident has made us appreciate the need to extend our living space, it's probably this pandemic.
Sonos
Streaming-video services and hubs are moving higher, but audiophiles have yet to crash the party. Sonos is a pioneer in wireless home audio systems and knows how to keep moving in the right direction. The company has posted positive sales for 14 years in a row.
Its latest quarter was another beauty, with revenue climbing 13% and net income clocking in slightly better with a 15% ascent. Sonos has proven that it can take on the tech giants rolling out subsidized smart speakers and low-end audio gadgetry. Folks who can appreciate premium audio will probably continue to gravitate toward Sonos products as they hunker down to good tunes in their homesteads.
Lovesac
One of this week's hottest stocks makes beanbags, but dig a little deeper before dismissing Lovesac and the blistering 72% rally that its stock has pieced together through Thursday and Friday trading. Lovesac makes high-end beanbags that can run north of $1,000 for a colossal piece of fluff that can hold an entire family.
Lovesac blasted higher after announcing that net sales rose 44% for its fiscal fourth quarter ending on Feb. 2. Its showrooms are now closed, but Lovesac played up strong e-commerce sales since the crisis hit. Lovesac's plush beanbag chairs and modular sectionals, which can be pieced together to create flexible sofas and chairs, seem like just the ticket to get folks through long days of streaming video, playing with apps, or writing the next great American dystopian novel.
Peloton
The company behind the pricey namesake treadmills and stationary bikes is huffing and puffing through some heavy financial cardio. Revenue soared 77% in its latest quarter, and there are now more than 2 million subscribers across its various platforms.
With gyms closed, folks are probably envious of Peloton owners who can replicate the experience with live group workout sessions. A knock on gym memberships and even workout equipment is that folks tend to lose interest, but that's not happening here. Engagement continues to grow, and the company's monthly churn rate is clocking in at a mere 0.74%.
Sleep Number
Your bed has always been waiting for you at the end of a long day, but you may find yourself taking more breaks on your mattress during the day now -- and those puffy pieces that whisk you off to dreamland need to be replaced. Sleep Number offers a differentiated product with its air-chambered mattresses that have adjustable firmness settings. It recently introduced the Sleep Number 360, billed as the industry's first smart bed for its ability to adapt to sleepers during the night.
Sleep Number is on a roll. Adjusted net sales and earnings per share rose 14% and 41%, respectively, in its latest quarter. Its showrooms are now closed, but it wouldn't be a surprise if it's thriving on the e-commerce front the way that Lovesac has been with its own showrooms shuttered. Sleep Number stock has been beaten down in recent months, but sometimes all it takes is one good quarter to turn a nightmare into a dream.
Trex, Sonos, Lovesac, Peloton, and Sleep Number may not seem like top stocks for investors, and only Peloton is trading higher for all of 2020. However, these companies are toiling away right where you probably are right now -- and that's a good place to be.
