Market Crash: Hedge Your Portfolio With These 2 Top Growth Stocks

The stock market crash of 2020 has led to the emergence of new defensive industries. Take a hard look at these stocks hitting 52-week highs.

| More on:
Hand arranging wood block stacking as step stair with arrow up.

Image source: Getty Images

April has gotten off to a decent start, as the markets have bounced off March lows. Month to date, the S&P TSX Index is up 8.40%, as investors enjoy a reprieve from one of the worst months on record. Unfortunately, the market crash may not yet be over, and investors will want to maintain a defensive position. 

Part of that strategy, includes investing in companies that will do well in an environment of social isolation. Since this market crash is like no other, investors must think outside the box when it comes to their stock picks. 

Case in point, there are a few stocks that are hitting 52-week highs. These stocks are worth a closer look, as they are tailor-made for today’s market crisis. 

A hedge against COVID-19 market crash

The stock market crash of 2020 is a pandemic-induced event. COVID-19 will usher in an era of new normal. Of the utmost importance is proper health and hygiene — enter Jamieson Wellness (TSX:JWEL). 

In Canada, the Jamieson brand is a household name. It is the market leader in the vitamins, minerals, and nutrition supplements industry. According to research, less than 30% of Canadians take a vitamin, and more than 60% don’t get enough nutrients from food. 

Since the COVID-19 crisis began, demand for Jamieson’s products has been on an upswing. This is not surprising, as individual health is at the front of everyone’s minds. The COVID-19 pandemic has been life changing, and it is likely that Canadians will continue to increase their vitamin intake.

Last week, Jamieson announced that first-quarter revenue is expected to be approximately $83.0-$84.5 million. This is well above the street forecast for $75.8 million. 

This week, the company hit a 52-week high, and it is now trading at 26 times forward earnings. Year to date, Jamieson’s stock price is up by 12.78% far outpacing the S&P/TSX Index (-18.20%) during this market crash. 

Although not cheap, there are plenty of growth opportunities for the company. Analysts expect high, single-digit growth over the next couple of years. 

A leading cloud tech company

An interesting phenomenon is occurring — technology companies are becoming leading defensive stocks in this market crash. The work-from-home movement and e-commerce have taken centre stage in a world where countries are in lockdown. 

One stock that is taking full advantage is Kinaxis (TSX:KXS). Up by 19.98% year to date, Kinaxis also hit 52-week highs this past week. Kinaxis specializes in cloud-based supply chain management. Despite the market crash, the demand for its products in support of e-commerce is likely strong. 

The company’s subscription-based model leads to predictable revenue. In an environment where guidance is far from certain, visibility into revenue and earnings is a positive. Investors like certainty, and Kinaxis’s business model lends well to this. Not to mention, it has a strong balance sheet, with $182 million in cash and little debt. 

Much like Jamieson, Kinaxis won’t come cheap. It is trading at 76.92 times forward earnings and at almost 10 times book value. Given its high valuation, it is best to average into a position. Likewise, since the market crash is expected to take another big downturn, it is an excellent buy-the-dip candidate.  

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 Mat Litalien has no position in any of the stocks mentioned. The Motley Fool recommends KINAXIS INC.

More on Tech Stocks

Shopping and e-commerce
Tech Stocks

1 Tech Stock You’ll Be Glad You Bought When the Bull Market Starts

Historically, tech stocks have done well during bull markets. Here’s one you’ll be happy you bought before the next bull…

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

3 Stocks to Anchor Your Portfolio in a Rocky Market

Three stocks are solid anchors in any portfolio today for their outperformance in a weak market and defiance of the…

Read more »

edit Sale sign, value, discount
Tech Stocks

2 Cheap Tech Stocks to Buy Right Now

Many tech stocks offer exceptional returns compared to other stock sectors when the market is bullish. You can add to…

Read more »

Hands shaking over a business deal
Tech Stocks

Got $5,000? These 2 Growth Stocks Are Smart Buys

Are you looking to invest $5,000 in the stock market? Here are two of the best growth stocks you can…

Read more »

man sitting in front of 3 screens programming
Tech Stocks

2 Best Software Stocks to Buy in 2023 and Beyond

Salesforce (NYSE:CRM) and Constellation Software (TSX:CSU) are the two best software stocks to buy this year and beyond.

Read more »

consider the options
Tech Stocks

Is it Too Late to Buy Shopify Stock?

Shopify is one of the most popular stocks on the market. Is it too late to buy shares?

Read more »

Tech Stocks

2 Best Canadian Stocks Under $10 to Buy Now

Cheap TSX stocks such as Payfare and StorageVault are trading under $10. Both these stocks have significant upside potential in…

Read more »

edit Businessman using calculator next to laptop
Tech Stocks

Better Buy: BlackBerry Stock vs. CrowdStrike

BlackBerry and CrowdStrike are tech stocks part of the cybersecurity segment. Which is a better buy between CRWD stock and…

Read more »