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by Fred Fuld III
Businesses across the country have been changing their travel policies. Over the last several years, many companies with diverse geographical footprints have moved towards video conferencing instead of meetings in person, in order to save on travel, hotel, and car rental costs.
Now companies are stepping up their online meetings for the health and safety of their employees, due to the outbreak of the Coronavirus, also known as COVID-19.
There are several companies that will benefit from this massive change in how company employees interact with other employees, vendors, customers, suppliers, and others.
One example is Cisco Systems (CSCO), the large hardware and software network company. The company owns the web conferencing applications WebEx and Jabber. However, these divisions are only a small part of Cisco’s business. In the last month, the stock has dropped by over 22%. It trades at 13.5 times trailing earnings, and pays a dividend yield of 3.9%.
In terms of the purer plays, there are a couple stocks to choose from. LogMeIn (LOGM) is a collaboration service company that owns the popular GoToMeeting product, along with Join.me. However, the company has agreed to be acquired for $4.3 billion by the private equity companies Francisco Partners and Evergreen Coast Capital Corp., with the closing taking place sometime this year.
Then there is Zoom Video Communications (ZM), the remote conferencing company which offers its Zoom conferencing product. The company is generating earnings but has a nosebleed high forward price to earnings ratio of 256.
Other companies in this industry are similar to Cisco, in that the video conferencing makes up a small portion of their business. These include Alphabet’s (GOOG) (GOOGL) Google Hangouts, Microsoft’s (MSFT) Skype and Teams, Adobe (ADBE) Connect, and RingCentral (RNG).
Let’s hope the Coronavirus is eliminated quickly. But in the meantime, at least we have a way of communicating with each other without meeting in person.
Disclosure: Author owns MSFT.
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