Our top covid-19 recovery stock report was sent out to our Members over the weekend. We are taking the current market volatility as an opportunity to buy quality companies which are trading at more attractive valuations compared to recent history, while remaining cautious on markets generally given the extent of the corona-virus pandemic is still very uncertain. We think it is time to start “averaging into” stocks (i.e. buying portions of shares, over a set period of time such as 6 months) selectively on a medium term (1 – 3 year) view.
It does appear the market is starting to now differentiate between the stocks and sectors which will face major problems for an extended period (e.g. retail/ tourism / airlines / property trusts), and those which are relatively immune and / or benefit e.g. healthcare. We have highlighted the reasons why we think these stocks will perform well once the world gets through corona-virus, and catalysts for stock outperformance.
Generally, we have chosen stocks as they:
– Are companies which can continue to make good profit margins.
– Have a solid balance sheet to weather an unprecedented economic shutdown period.
– Stable revenues during the lockdown period and/or low costs so there is manageable cash-burn
We are avoiding the most “at risk” industries – and think it is too early to buy the likes of airlines like Qantas & Air New Zealand, retailers, pure retirement villages, and casinos.
BHP Billiton (BHP:ASX)
One of our top 10 stocks which could be well places in a recovery is BHP. The sector could continue to perform well underpinned by demand from China which is back online, whilst BHP’s solid balance sheet can handle near-term risks such as weak demand and pricing shocks. Given the diversified and crucial nature of their commodities and being an efficient low-cost operator, BHP should continue to deliver strong cash flow within this challenging environment. The current valuation represents attractive upside potential once the global economy returns back to normal activity, in our view.
If you would like to access our Top 10 stock report, we are offering a special membership deal:
$20 per month (cancel anytime) / or $195 for 1-year.
To take up this offer please email info@atmstrategy.com.au or call 0800-435-001 (NZ)