The March market crash illustrated the seriousness of the COVID-19 global outbreak. Governments have responded with decisive action to contain the pandemic. However, the economic disruptions from these lockdowns have already led to record-breaking job losses.
Opportunity in a market crash
Back in 2007-2008, there were real fears that the global economy could fall into a deep depression. There was a market crash, albeit one not as rapid as what we have witnessed this year. Fortunately, governments around the world acted swiftly, and investors enjoyed the fruits of a long recovery.
A $20,000 investment split between Constellation Software and Kirkland Lake Gold in the beginning of 2010 would have grown to over $1 million in value by December 31, 2019.
Late last month, I’d discussed how investing legends like Warren Buffett have behaved in previous bear markets. Value investing asks that its adherents target high-quality equities that are trading below their fair value. Moreover, Buffett has proven the eternal optimist in his career. He has consistently bet on the top companies in the world and has become very rich because of this strategy.
Investors should not underestimate the seriousness of the current crisis. A months-long lockdown will result in incalculable economic damage. However, in the long term, investors should maintain faith in our robust systems and in the top companies in the world. Today, I want to look at three stocks that are well positioned to flourish in the years to come. This way, investors have a chance at turning tens of thousands into millions!
Three stocks to grab in April
Jamieson Wellness is a Toronto-based company that develops, manufactures, distributes, sells, and markets natural health products in Canada and around the world. A recent report from Grand View Research projects that the dietary supplements market will by worth $230 billion by 2027. This would represent a CAGR of 8.2% over the forecast period dating back to 2019.
Shares of Jamieson have climbed 11% so far in 2020. The stock has been one of the top performers in this market crash. It is not the top value pick right now, but it boasts attractive long-term potential.
National Bank is the smallest of the Big Six Canadian banks. Its stock has dropped 25% month over month as of close on April 2. National Bank boasts an immaculate balance sheet. Like its peers, it is a profit machine that is worth trusting in the long term. Many of Canada’s top banks have fallen into attractive price territory after the market crash.
Canada’s bank stocks offer nice value right now. National Bank stock last had a favourable price-to-earnings (P/E) ratio of 7.9 and a price-to-book (P/B) value of 1.3. Moreover, it offers a quarterly dividend of $0.71 per share. This represents a strong 5.5% yield.
Park Lawn provides death-care products and services in the United States and Canada. Its stock plunged 20% week over week as of close on April 2. This was largely due to a Q4 earnings miss. However, investors should still have faith in this company going forward.
Like Jamieson, Park Lawn is positioned to grow due to aging demographics. Revenue and earnings have posted promising growth over the past half-decade. After its most recent plunge, shares offer a favourable P/B value of 0.9. Park Lawn last paid out a monthly dividend of $0.038 per share, representing a 2.7% yield.
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 Ambrose O'Callaghan owns shares of KIRKLAND LAKE GOLD LTD. The Motley Fool owns shares of and recommends Constellation Software.