This year’s stock market crash caught many investors by surprise. The global pandemic also caught many blue-chip companies unawares.
However, while some businesses have struggled to cope, others have thrived.
It could be sensible to buy some of these all-weather companies, such as the two businesses profiled below, before the next stock market crash occurs.
Stock market crash beneficiaries
Trading and investment companies such as Hargreaves Lansdown (LSE: HL) were among the few beneficiaries of this year’s stock market crash. Its latest trading update showed that 94,000 new customers joined the business in the first four months of the year. These new customers brought in new deposits of £4bn.
Thanks to this new business and increased trading activity among existing customers, Hargreaves’ revenues increased by 13% for the four months to the end of April.
These numbers suggest that the company is well on the way to reporting a solid trading performance for 2020. They also indicate that another stock market crash may result in an even better year for the online stockbroker.
Another crash may lead to a further increase in trading volumes, pushing up revenues later in the year.
As such, now could be an excellent time to buy a share of this market-leading investment champion. The increase in new customers has not only helped the business thrive in the coronavirus crisis but should lead to increased recurring revenues in the years ahead.
London Stock Exchange
The London Stock Exchange (LSE: LSE) could also be a beneficiary of another stock market crash. The LSE makes its money in the same way as Hargreaves. It profits whenever traders place a deal through its services. So, increased trading activity should result in higher profits for the group.
The company also controls the UK’s and Italy’s primary stock exchanges. So it has a definite competitive advantage over the rest of the financial services industry in these countries.
The company also has a strong presence in the European clearing business. Clearing is an essential part of trading. It is the process of making sure buyers and sellers have the funds and assets available to complete a trade. Once again, this business should benefit from higher trading activity.
In a second stock market crash, the LSE would undoubtedly benefit from higher trading volumes across all of its platforms. This may also allow the company to reduce borrowing and increase funds acquisitions.
Indeed, the LSE has been extremely happy to make significant acquisitions in the past. These deals have increased its dominance over the European financial system.
If a rise in volatility leads to more trading and higher profits, the company could take advantage of this. It may be able to reinvest this money back into struggling peers at attractive prices.
Therefore, the LSE seems extremely well-placed to generate good returns for investors in the next stock market crash.
The post 2 FTSE 100 stocks I’d buy before the next stock market crash appeared first on The Motley Fool UK.
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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2020