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Worried About the Global Supply Chain Crisis? These 2 Stocks Can Keep Winning

Global supply chain challenges continue to disrupt the operations of companies of all sizes and across nearly all industries. In this segment of Backstage Pass, recorded on Dec. 15, Fool contributors Rachel Warren, Connor Allen, and Danny Vena discuss two stocks that can keep winning for investors in spite of the supply chain crisis.

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Rachel Warren: CNN reported yesterday that much to my surprise, I don't know how you guys felt, but despite ongoing supply chain bottlenecks and shortages, holiday packages are actually moving on time. "Deliveries of packages by UPS, FedEx, and the U.S. Postal Service" according to CNN "are all moving at close to a 100% on-time performance according to data from ShipMatrix. It's a pleasant surprise even for those who anticipated that those three services will be well prepared for the holiday season."

The report noted that there are several factors behind why holiday packages are moving on time this year despite ongoing bottlenecks. One is carriers had already boosted their delivery capacity in anticipation of the busy holiday season.

Another is there's more shoppers going to brick-and-mortar stores because they are worried about being able to find the items they need online, and a third factor is people are shopping early because of supply chain concerns.

I thought this is very interesting. I'm curious to hear what you guys think of this. Danny, I'll let you take this one first. What's the company that you think can benefit the most from these positive holiday shopping trends?

Danny Vena: I will start by saying that I too was very surprised to see this. I remember all of the things that we were hearing last in the lead up to last year's holiday season about with all of the people joining the e-commerce revolution and more people ordering online and the shippers just weren't ready for all that so they get a little bit of a break now, so it makes sense.

For me, one of the biggest beneficiaries of that has still got to be Amazon (NASDAQ: AMZN). So much of the company's e-commerce business relies on it's deliveries, it's next-day, and two-day shipping model and a lot of folks that are not going into brick-and-mortar stores. I don't know if you heard this or not but California just instituted an indoor mask mandate again. Started today going on for the next month so anybody who wants to go out shopping put your mask on.

I think Amazon, so much of it's success is tied to that shipping. I think there is still going to be a lot of last minute e-commerce shoppers that are going to go online and try to pick up those last minute gifts. Supply chain shortages or not or logistics issues. I think we're going to see more of that. I expect the Amazon to benefit. We'll see how it happens.

Rachel Warren: Awesome. What about you Connor, thoughts?

Connor Allen: Well, first off I'm a beneficiary of the supply chain issues not being a big deal because I'm definitely a late Christmas shopper. I'm putting in orders currently. Hopefully they get here on time we'll see. But anyways the company that I think is going to benefit from this is a pick and shovel play off of Amazon and off of online retailers around the country and that is PayPal (NASDAQ: PYPL).

PayPal has done studies on how likely somebody is to buy a product when PayPal is offered versus when they are not offered. The results from those studies is that customers are much more likely to actually buy the product if PayPal is an option for them to use, just because it's so simple and puts in all your information and it ships up to the right place and has your address and everything.

Just really easy to use, it's connected with your credit or debit card. I think starting next year, you're going to be able to use Venmo and Amazon starting next year, so that's not a thing that's going to happen this Christmas, but potentially next Christmas that's going to be a big growth opportunity for them.

Rachel Warren: Absolutely. I think the whole Venmo, PayPal, Amazon partnership was a really interesting and strategic one because everyone uses Amazon but it makes it so much easier to checkout and pay for those items without any fuss.

I think for me, something that stuck out from this article [laughs] is the fact that one of the reasons we're not seeing a delay in holiday deliveries is because more people are shopping in-person instead of online. We've been talking for so long about could brick-and-mortar retail be dying?

I know this is a topic we've discussed a lot on this show and it's something that I think a lot of people were anticipating before the pandemic and then in the earlier days of the pandemic with so many more people shopping online because most of us couldn't go anywhere. [laughs] I think people were thinking that's going to accelerate that trend even more.

While I do still think that online shopping is the way of the future, I'm starting to think that maybe we're also going to see much more of a hybrid model here where companies don't ditch the brick-and-mortar model altogether.

If they have a successful model that's working for them. They're going to build upon that but also work on building a strong e-commerce business. I think it definitely raises some very interesting questions about what the future of retail at least over the next few years could look like.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Connor Allen owns PayPal Holdings. Danny Vena owns Amazon and PayPal Holdings and has the following options: long January 2024 $95 calls on PayPal Holdings. Rachel Warren owns Amazon. The Motley Fool owns and recommends Amazon, FedEx, and PayPal Holdings. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.


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