Investing

Working From Home Permanently Could Rise 100% and These Stocks May Benefit

Best Buy

The need for the electronics and gear to set up a WFH office could be a huge tailwind for this leading retailer. Best Buy Inc. (NYSE: BBY) is the top specialty retailer of consumer electronics. The company operates about 1,000 stores in the United States, primarily big-box Best Buy locations, and over 200 stores in Canada and Mexico. The company also offers a variety of high-margin services, through its Geek Squad and Magnolia home theater channels, as well as a recent expansion into connected health and emergency services for seniors through its purchase of GreatCall.

The company announced this week that it has held on to 70% of its year-over-year sales despite the move to curbside-only service amid the COVID-19 outbreak. All the retailer’s domestic stores are closed to customers with the exception of the curbside service, and about 40 stores are shuttered entirely. Online sales have soared 250%, with half of those orders using the curbside service.

Investors receive a 3.40% dividend. Jefferies has a $101 target price, while the consensus target was last seen at $81.55. Best Buy stock closed at $64.76 on Wednesday.

Broadcom

This stock has rallied smartly off the lows and offers big upside potential. Broadcom Inc. (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.

Applications for Broadcom’s products in its end markets include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems and displays.

Top Wall Street analysts like Broadcom’s leadership in the mobile, data center and broadband markets, and especially in the radio frequency (RF) arena. Many on Wall Street see a cyclical rebound in industrial and communications demand later in 2020 and in 2021.

Investors receive a 5.05% dividend. The $300 Jefferies price target is higher than the $296.04 consensus target. Broadcom stock was last seen trading at $257.44.

Ciena

This company has had a very up and down 52 weeks and frequently has been the subject of takeover rumors. Ciena Corp. (NASDAQ: CIEN) is a vendor for high-capacity optical transport and Ethernet switching equipment to carriers, enterprises, cable operators and governments. It specializes in transitioning legacy communications networks to converged, next-generation architectures capable of efficiently delivering a broader mix of high bandwidth services.

The company’s Converged Packet Optical segment offers networking solutions optimized for the convergence of coherent optical transport, Optical Transport Network (OTN) switching and packet switching. Its products comprise the 6500 Packet-Optical Platform, 5430 Reconfigurable Switching System, CoreDirector Multiservice Optical Switches and OTN configuration for the 5410 Reconfigurable Switching System.

Jefferies has set a $55 price target on Ciena stock. The posted consensus target is $49.83, and the last trade on Wednesday came in at $43.90.

Clearly, the Jefferies team is bullish on technology stocks that make the WFH job easier, and they also feel that brick-and-mortar and online retail could be winners as well. While working from home is not for everybody, it is something that will only grow in the years to come. Those companies that embrace it after the pandemic subsides will see numerous benefits, as will many employees.

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