Sometimes it pays to keep an eye on the news Stateside. During the coronavirus market crash is definitely one of those times. Morgan Stanley has predicted a 30% growth slowdown in the U.S. in the next quarter. Canadian investors may very well conjecture that this is likely to have a direct effect on our own economy.
The multinational banker did have some good news, however. A return of the Great Depression is certainly not a given. While a sharp recession may be on the way, Morgan Stanley said, “The good news is that unlike in 1929-33, we are already seeing an aggressive policy response.” This response, TSX investors will note, has also been reflected in Canadian policy.
The bank added that, “Back then, strict adherence to the gold standard further exacerbated the deflationary tendencies. The Federal Reserve also maintained a hawkish monetary policy stance for an extended period.” The bank’s economists cited recent fiscal responses to the 2008 Financial Crisis. They also worked off an assumption that the virus would peak April or May.
The coronavirus market crash, however dire, has at least highlighted which sectors remain resilient to extreme volatility.
Today we’re going to take a look at three stocks that beat the TSX last week.
Three stocks beating the market crash
Kinross has gained 25% in the last 12 months. Compare that with the TSX, which has lost almost as much in the same time period. On average, the TSX has shed an incredible 23.4% year on year.
The stock rebounded 9% midweek. This name is a buy for geographical diversification across the Americas, Russia, and Africa. It’s a senior player that offers both gold and silver exposure to TSX investors.
Why buy CN Rail? Let’s examine. First, there’s value. There’s simply never been a better time to buy stocks, period. Then there’s the 2% dividend yield, which is as reliable as they come.
Another strong reason to get invested in the country’s best rail stock is diversification. This wide-moat name covers a comprehensive cross-section to just about the entire Canadian economy. CN Rail bounced 7% midweek.
Finning International services and maintains Caterpillar machines, making it a strong low-exposure play for infrastructure investors. Construction sites have remained open so far, buoying this name.
But even if they close during the quarantine, Finning is looking like a must-have stock for TSX investors. The stock is up by an incredible 32% in the last five days and pays a tasty 5.7% dividend yield.
There are a few smart moves that investors can make right now to stabilize a stock portfolio. This is a great time for window shopping. Investors should make a list of stocks they would love to buy during a market crash. Conversely, though, potential shareholders should revise EPS projections.
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The bottom line
Investors should decide the price they would buy in at. They should also scale back the number of shares they would normally buy, and consider buying in increments, which will allow market crash investors to increasingly build their position in their favourite names.
Investors should only sell on strength, waiting for rallies to trim and cash in their weaker names.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway. The Motley Fool recommends Canadian National Railway.