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The coronavirus pandemic compressed five years of digital transformation in the U.S. into five months, “Shark Tank” star Kevin O’Leary said Saturday.
What O’Leary calls “the great digital pivot” away from retail presents an opportunity for investors, he said. Retail sales have 50% gross margins, but direct-to-consumer sales have gross margins nearing 100%, O’Leary said at Benzinga’s Stocks & Options 101 Boot Camp, held virtually June 26-27.
“I’ve been working hard on indexing this change and investing in it myself,” said O’Leary, the chairman of O’Shares ETF Investments.
O’Leary On The Digital Pivot: Before the pandemic, a typical American business made 50% of sales at retail, 40% on Amazon.com, Inc. (NASDAQ: AMZN) and 10% direct-to-consumer, he told Benzinga’s Neal Hamilton during a Boot Camp session.
Then came the coronavirus and an economic shift to “America 2.0,” O’Leary said.
“Most of these companies said, ‘I don’t want to give all retail sales to Amazon for one reason,” he said. “Amazon does not give you back your customer. They keep [them].”
With direct-to-consumer sales bringing what O’Leary said are almost 100% gross margins, sales can fall by half without impacting free cash flow, he said.
“What I care about [as an investor] is free cash flow.”
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Three Stocks will Lead the Recovery
Is now the time to buy stocks?
That’s the question I keep hearing from friends, family, and readers.
They want to know if its smart to buy cheap stocks when there is so much bad news coming out.
Tens of millions without jobs… earnings sinking through the floor… huge amounts of government debt…
So why buy stocks now?
It pays to remember that the stock market is a leading indicator of what’s coming in the future. And while the bad times are already well documented, the smart money clearly expects better times ahead.
Find details on the three stocks set to lead the recovery here.
And it’s easy to see why…
Author and Singularity University Chairman Peter Diamandis estimates that between, 100 million and 200 million; scientists, technologists, engineers and healthcare workers have taken aim at this pandemic.
They are running tens of thousands of experiments and sharing information with a transparency and speed we’ve never seen before.
Never before have so many researchers in so many countries focused simultaneously on solving a problem… and with such urgency.
At the same time, cases and deaths from the coronavirus have reversed direction… It doesn't appear to be as deadly as the experts initially foretold… and the government is now planning the end of the lockdown.
In short, it’s time to plan for the future.
And that means identifying the stocks that will be the biggest winners as the economy recovers.
To help you with that, I’ve put together a new video from my home office.
In it, I detail what I believe is next for the markets, including the three stocks I am certain will be big winners moving forward
When the markets react to good news, it happens very fast.
You don’t want to get left behind. Click here, to get details on the top three stocks of the coronavirus recovery.