The FTSE 100 has tanked recently due to the coronavirus. Over the first three months of the year, the index fell 25%. That was its worst performance since 1987.
In the short term, there’s every chance the Footsie could fall further. In the long run, however, the index is likely to rebound. With that in mind, here’s a look at five FTSE 100 shares I’d buy while the index is trading at a low level.
One FTSE 100 stock that I’m always looking to add to during periods of stock market turbulence is alcoholic beverages legend Diageo. Why? Well, it owns a world-class portfolio of liquor brands. It often trades at a lofty valuation due to its excellent long-term track record, so the best time to buy is generally when fear levels are high.
In the near term, Diageo’s profits will take a hit from Covid-19 due to the fact that bars and pubs around the world have been temporarily closed. However, the long-term growth story associated with emerging market consumers remains intact. So I’m looking at the current share price weakness as a buying opportunity.
Another FTSE 100 company that often trades at a high valuation and is now ‘on sale’ is Unilever. It’s a consumer goods business that owns a wide range of trusted brands including Dove and Domestos.
Unilever is a dependable stock as its products tend to be used by millions of people globally, no matter what the economy is doing. It also has an attractive growth story. Like Diageo, it’s poised to benefit from rising wealth across emerging markets. I believe that those buying ULVR while the stock market is depressed will be rewarded in the long run.
Cloud-based accounting solutions provider Sage is another stock worth a look while the FTSE 100 is down, in my opinion. It’s a high-quality company poised for solid growth over the next decade as businesses move their accounting systems to the cloud.
It’s worth noting that Sage is held by two of the UK’s most respected portfolio managers, Terry Smith and Nick Train. So if you own Sage shares, you’re in good company.
Shares in online broker Hargreaves Lansdown are also worth a closer look while the FTSE 100 is well below its 2020 highs. Hargreaves is the leader in its industry. It is an extremely profitable company, and it has the financial strength to survive an economic downturn.
In the short term, HL’s profits will be impacted by the recent stock market pullback. In the long run however, profits should expand as global stock markets rise. With the stock currently well off its 52-week highs, I think it’s a great time to be buying.
Smith & Nephew
Finally, I also think Smith & Nephew is a great share to buy while the market is down. It’s a healthcare company that specialises in joint replacement systems.
Smith & Nephew is certainly going to see a decrease in profits in the short term. This is because elective surgeries have been postponed in the wake of the coronavirus outbreak. In the long run however, the world’s ageing population should drive demand for joint replacements, meaning there’s an attractive long-term growth story.
Interestingly, CEO Roland Diggelmann just bought 6,000 Smith & Nephew shares himself, which is a good sign for the future if you ask me.
The post 5 FTSE 100 shares I’d buy in this stock market crash appeared first on The Motley Fool UK.
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Edward Sheldon owns shares in Unilever, Diageo, Sage, Hargreaves Lansdown, and Smith & Nephew. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Diageo, Hargreaves Lansdown, and Sage Group. 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