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The Pandemic's Still Not Over: 3 Stay-at-Home Stocks to Buy Right Now

By David Jagielski – Nov 15, 2020 at 5:30AM

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GoodRx, Nintendo, and Roku are all great growth investments to hang on to for the long term.

There's excitement in the markets on news that Pfizer's (PFE -1.04%) coronavirus vaccine is potentially 90% effective in preventing COVID-19. However, Dr. Scott Gottlieb, who previously served as the commissioner of the U.S. Food and Drug Administration, warned people last month not to get too optimistic about a vaccine, telling CNBC in an interview that "we're probably in the seventh inning of the acute phase of this pandemic right now, but the hardest part is probably ahead."

It could be months before people start receiving vaccines, and likely even longer before things start getting back to some sort of normalcy. That's why stay-at-home stocks including GoodRx (GDRX 6.61%)Nintendo (NTDOY 0.18%), and Roku (ROKU 6.58%) are still attractive right now: Their products and services will remain in strong demand as people continue sheltering at home and minimizing travel. And many of the new customers those companies gain amid the pandemic will likely stick around even after it's over. Here's a closer look at why they're great buys right now.

1. GoodRx

California-based GoodRx went public in September, and although its returns thus far haven't been all that impressive -- the stock is down 5% while the S&P 500 has climbed 8% during the same time frame -- that just makes it all the more attractively priced today. The company saves customers (with or without insurance) time and money by finding the best prices on prescriptions, comparing prices from more than 70,000 pharmacies in the process. Patients can easily obtain coupons via email or text message, and thanks to convenient delivery options from many providers, they can use GoodRx to find the cheapest prescriptions without leaving home. .

Woman in isolation during covid-19.

Image source: Getty Images.

On Nov. 12, GoodRx released its third-quarter results for the period ending Sept. 30, reporting sales of $140.5 million that grew 38% year over year. Its number of monthly active users, at 4.9 million, was up 29% from a year ago to the highest level the company has ever reported. The one downside was that GoodRx reported a net loss of $50 million in the quarter, primarily because of an increase in stock-based compensation. However, in the previous six quarters, GoodRx has recorded profit of at least $11 million.

GoodRx is showing lots of growth, and although its bottom line may have disappointed this time around, there's a lot more reason to be bullish on the stock than to be negative today. Thanks to its share-price struggles of late, this one could be an underrated buy now.

2. Nintendo

Video games are a wildly popular source of at-home entertainment, which is why Nintendo is such a good potential pick for your portfolio today. Building on the popularity of its portable Switch console, which allows people to play at home or on the go, Nintendo is showing impressive results. For the six-month period ending Sept. 30, its sales topped 769.5 billion yen ($7.4 billion), up 73% from the prior-year period.

Sales from the Switch platform rose 80% year over year to 12.5 million devices. Of that total, 8.4 million were the hybrid model, which functions as both a home and portable console, while 4.2 million were portable-only Lite devices. All this good news led management to raise guidance; they now expect that by the end of the fiscal year in March, Nintendo will have sold 24 million Switch devices, up from a previous estimate of $19 million. Those expected sales should also boost the bottom line by up to 50%.

3. Roku

For everyone who doesn't play video games (or likes to change it up sometimes), Roku is a popular entertainment choice. The company's streaming devices and easy-to-use software make it easy to balance different online video subscriptions and watch comfortably on several screens. On Nov. 5, the company released its third-quarter results, in which sales of $452 million were up 73% year over year. Its active accounts totaled 46 million, up from an already impressive 43 million in the previous quarter, during which lockdowns forced many people to stay at home. And streaming hours of 14.8 billion showed a continued increase, too, up from 14.6 billion in the second quarter.

Roku is doing great on a year-over-year basis, but what's really encouraging for investors is that these trends aren't dying down even though lockdown restrictions are currently looser than they were in Q2. People are still using the devices, even outside of quarantine. Whether you're looking for a stay-at-home stock or just a solid growth investment, Roku is a great option that shows no signs of slowing down just yet.

Great growth stocks to build your portfolio around

GoodRx, Nintendo, and Roku are attractive investments for the long haul. Stay-at-home orders could bring in more customers, and (as Roku's results indicate) they may well stay after life goes back to normal. GoodRx will still provide value and save time; Nintendo's Switch devices will still offer easy on-the-go entertainment; and Roku will remain a popular option for cord-cutters. None of this will disappear if and when the coronavirus does.

Year to date, Nintendo and Roku have both soundly outperformed the S&P 500:

ROKU Chart

ROKU data by YCharts

GoodRx, meanwhile, is off to a tough start in its early stages as a public company,  but it still shows a lot of promise and could be a top-performing stock next year. Investing in all of these stocks could provide exposure to the healthcare, gaming, and video streaming industries through three solid companies to build a portfolio around.

David Jagielski has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Roku. The Motley Fool recommends Nintendo. The Motley Fool has a disclosure policy.

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