The “Mad Money” host said that even though the pandemic is now in its seventh month, the stocks continue to have reasons to move to the upside. Other beneficiaries include the homebuilders and packaging companies, he said.
“The stay-at-home story, it’s not quitting,” Cramer said. “Every time we get hit with another wave of Covid infections — this is wave three, when wave four happens and wave five happens — these stocks will keep roaring. I bet they’re going to keep roaring until we all have been vaccinated.”
Cramer acknowledged there are some investors who are wary of Zoom’s valuation as the stock has run up 688% so far in 2020. It notched another all-time high Thursday. However, the former hedge fund manager said the company has done a nice job innovating, including its recently announced product that will allow organizations to host paid events through Zoom.
“All of this keeps Zoom one step ahead of the posse and the short sellers,” Cramer said. “So what if it trades at 50 times sales? Think of Zoom as an entity that’s trying to grow into its market cap. If we’re going headed back into another lockdown, or pseudo-lockdown, or partial lockdown, then you better believe Zoom gets a major boost.”
Soon-to-be-public DoorDash also has developed creative new offerings to adapt to the work-from-home world, offering tailwinds for the stock after its planned IPO, Cramer said. The company established an initiative to allow businesses meal benefits and perks while they’re working remotely, a substitute for catered lunches that used to arrive at the office.
Cramer said packaging companies represent another category of under-the-radar pandemic winners. In particular, Cramer said stocks such as International Paper and Westrock had been real laggards prior to the health crisis and he had avoided recommending them.
“They added too much capacity to meet the demand for delivery. It’s gotten so bad that they had to close mills and shut down the production,” Cramer said. “But that’s all changed with the stay-at-home economy. We’ve never had so much demand for boxes. Look at FedEx up again today.”
Big restaurant chains such as Chipotle and Darden Restaurants, the parent of Olive Garden, have the balance sheets and scale to withstand the persistence of the coronavirus, Cramer said. That is especially true as smaller restaurants struggle without relief from Washington, he added.
Not every stay-at-home stock has succeeded lately, Cramer acknowledged. Video game stocks have largely stalled, he said, but he contended there is a move higher in the future. “Sony and Microsoft are about to launch brand new consoles. I recommend buying Take-Two Interactive, my favorite. My charitable trust owns it. It’s going to have a huge holiday season.”
Disclosure: Cramer’s charitable trust owns shares of Microsoft and Two-Two Interactive.