The U.S. services sector is sometimes considered the lifeblood of the economy. Angi Homeservices (NASDAQ:ANGI) depends on the health of this market and the price of ANGI stock tends to mirror its ups and downs.ANGI) logo outside of a corporate building " width="300" height="169">
Source: Jonathan Weiss / Shutterstock.com
If you’ve heard of Angie’s List, then you’re at least somewhat familiar with Angi Homeservices’ business model. On Angie’s List, clients can shop around online for a reputable plumber, cleaner, landscaper or a variety of other home service providers.
The company actually owns a number of home-services-oriented web portals that are similar to Angie’s List, but with some differences. These include Handy, HomeAdvisor, HomeStars (which focuses on the Canadian market) and Instapro (which centers on the Italian market).
The onset of the novel coronavirus did extensive damage to the economy in general and the home-services industry in particular. However, recent data suggests a brighter future for this market. If a turnaround is indeed in progress, then ANGI stockholders stand to benefit in a big way.
ANGI Stock at a Glance
The coronavirus crash took Angi down with it, but the share price’s decline started prior to 2020. The $23.50 area marked a medium-term top for Angi’s stock, and that’s going to be a target for the bulls.
And for the time being at least, the bulls are charging towards that price target. The 52-week low for ANGI stock is $4.10, and that occurred in early April. By July 9, the stock was already threatening to break through the $16 level.
Given that the stock has been above $20 more than once, it’s reasonable to conclude that it still has room to run. Still, a favorable market climate will be essential to the progress of both the company and the stock.
Marking a Low Point
The first half of 2020 will surely be remembered, but not for good times and prosperity. Stay-at-home mandates, lockdowns, and social distancing all contributed to a meltdown in the economy and markets.
As a result, the services provided by Angie’s List and Angi Homeservices’ other portals weren’t in high demand for a while. Thus, the economic slowdown weighed on Angi Homeservices as many people deferred their home-improvement projects and upkeep endeavors.
In April, the Institute for Supply Management or ISM gave the U.S. non-manufacturing activity index a reading of 41.8. That was the lowest reading since March 2009, which happens to be the month in which the S&P 500 bottomed out.
Any reading below 50 indicates that the service sector is contracting. Startlingly, April’s reading marks the first time the index has contracted since December 2009. May’s reading was somewhat better at 45.4, but it still indicated that the services sector was in contraction mode.
The Climate Changes for the Better
To kick off the summer, however, the ISM announced that June’s reading was 57.1. That’s an 11.5% improvement over May’s reading. It’s also the biggest month-over-month gain percentage-wise since the index was initiated back in 1997.
With this increase in services-market activity, ANGI shareholders have a reason to believe that the economic climate is showing signs of improvement. Besides, even if the coronavirus outbreak is causing people to stay at home, that could encourage people to engage in home-improvement activities.
Survey data from Angi Homeservices tends to confirm this. The company’s research found that “While sheltering in place, homeowners embraced DIY while also seeking professional help for key projects: 80% said they plan on taking on more projects – both on their own and with the help of hired pros this year.”
ANGI Homeservices CEO Brandon Ridenour further elaborates on how the home services industry, and particularly his company, is having a “real moment” this summer: “With all the time we have been spending at home, home projects are top of mind and despite an initial pause in activity, many homeowners are continuing hiring pros for help with home projects, home repairs and maintenance.”
The Final Word
There’s no denying that ANGI stock was a real fixer-upper during the most intense months of the coronavirus crash. But today, the home services sector is back on the upswing. Improved conditions are bullish for the service economy and, without a doubt, for Angi Homeservices.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
The post Angi Homeservices’ Stock Will Climb As the Services Space Recovers appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.