What Can Google Tell Us About Treadmills And Table Saws?
May 2020 (click here to download)
Google search activity can be used by investors as a good barometer of what consumers are looking to purchase. While only one data point, year-over-year, changes in Google searches can, in many cases, be correlated with a company’s revenue growth. With this in mind, we can check in with Google Trends, a publicly available tool, to learn what consumers are interested in while sheltering in place.
With gyms across the country closed, millions of people are having to look for alternate ways to exercise. Not surprisingly, this has led to an explosive growth in Google searches for various types of exercise equipment, such as treadmills (Exhibit 1). Investors have taken note, with the stocks of a few exercise equipment companies meaningfully outperforming in recent weeks.
For those that are handy around the house, now seems to be the time to take care of some home improvement projects, leading to a big increase in consumers looking for table saws (Exhibit 2). Unfortunately, there are no table saw stocks to invest in, but many companies in the home furnishings industry with strong ecommerce businesses are similarly seeing the benefits of a population sheltering in place and looking to make their homes more comfortable.
So what are consumers not looking to buy? Given all the cancelled vacation plans, luggage has moved way down on shopping lists (Exhibit 3). For those looking for bargains, it may be a good time to get a new suitcase!
Source: Michael Buck of Driehaus Capital Management LLC.
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