We're seeing encouraging news on the COVID-19 vaccine front, but it's too early to start taking mask-free victory laps. Coronavirus cases and deaths continue to climb, and things may get worse before they start getting better. Is your portfolio ready for a second and potentially more dangerous pandemic wave?
Livongo Health (LVGO), Tractor Supply (TSCO 0.27%), and Peloton (PTON 2.58%) are three stocks that initially moved higher as the rest of the market swooned when the COVID-19 crisis started to intensify. They should be even bigger winners if things get worse in the coming months.
More than 10% of the country has diabetes these days, and there's another third of the U.S. checking in with blood sugar levels that would place them in the prediabetes camp. With our eating habits not getting any better during the shelter-in-place phase of this pandemic, how many more of us will have diabetes if a second wave sparks fresh shutdown orders?
Livongo Health is aggressively tackling diabetes with tech through what it calls advanced health signals. The platform uses data science and machine learning to provide better outcomes for its members using Wi-Fi-tethered glucose meters. Livongo offers exercise and diet coaching when it sees blood sugar levels start to climb. The process works. Members on the platform have seen their glucose readings improve dramatically in just the first few months, and it's a win-win-win situation.
Members obviously stay healthier. The insurance companies and self-insured corporations that offer Livongo have seen an average annual savings of $1,908 in medical costs per member. Livongo's user base has doubled to 328,000 members over the past year, and it's turning its next-gen applied health signals technology as a means to tackle other chronic conditions including hypertension and weight management.
Tractor Supply may not be a household name unless you live in a rural market, but it's a fast-growing retailer in the rapidly expanding recreational farming industry. It provides casual and hobbyist farmers with farming tools, livestock supplies, and pet food.
You may not initially think of the pandemic as a boon to recreational farming, but with folks concerned about food supply shortages is it really surprising to see folks with the means and acreage beefing up their commitment to farming? What do you think will happen if the situation grows more dire in the months to come?
Back in late May, Tractor Supply impressed the market by forecasting comps to soar between 20% and 25% for the quarter that ended in June. Tractor Supply is seeing its e-commerce business boom despite its seemingly earthy pursuits, and it's launching its first mobile app this summer.
Your gym misses you, but you probably don't miss your gym. There was already a strong movement for in-home fitness, and the pandemic has simply sped up the disruption process. Peloton has become the face of at-home workouts, and business is booming despite its big-ticket treadmills and stationary bikes and costly monthly memberships.
Fitness seekers aren't flinching at the price points. We've seen Peloton's connected-fitness subscriber count nearly double to 886,100 over the past year. Engagement has never been higher, going by the growing number of workout sessions per user, and churn is at a four-year low. Demand only picked up during the first coronavirus wave, leading Peloton to forecast roughly 128% in revenue growth for the quarter that ended last month.
Livongo Health, Tractor Supply, and Peloton are among the market's best growth stocks. They have some of the best prospects to keep climbing if the COVID-19 news gets worse this year.