See the Stocks That Beat This Week’s Market Crash

Only a handful of names defied Thursday’s selloff. Here’s why stocks like Transcontinental (TSX:TCL.A) beat the market.

Businessman looking at a red arrow crashing through the floor

Image source: Getty Images.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The outlook was bleak Thursday after the Fed issued a stark warning that the U.S. economy could not face further closures as a result of the spread of COVID-19. Markets returned to April lows on renewed fears, as investors got an injection of reality. Friday saw markets rally, with the TSX seeing early gains of 300 points (2%). But was the rally just another dead-cat bounce?

Prepare for a W-shaped recovery

There are few signs that the impact from the pandemic is about to ease up, and an array of hurdles that will have to be passed on the route to a full recovery. Investors should therefore be looking at a timescale of at least six to 12 months, as they massage portfolios for a new balance of risk and reward. All eyes will be on transmission rates as the threat of a second wave of infections menaces the markets.

The U.S. and Canadian stock markets have shown considerable disconnect from actual economic forces of late. Equities have been rallying on a widespread assumption that normal operations would soon resume. However, with the top-down assertion that this is unlikely to be the case, the TSX — in line with the major U.S. stock exchanges — is now undergoing another correction.

As before, it’s time to break out the recession investing guides and get back down to basics. Investors seeking to make a stock portfolio safer while continuing to buy shares in the current market may want to use the build-and-trim method and buy outperforming stocks.

The all-weather stocks that beat the selloff

It’s always a good idea to make a note of which names see gains during a broad market selloff. South of the border, only four names stood out immediately after markets plunged Thursday. These were Kroger, Kimberly-Clark, Cabot Oil & Gas, and Netflix. Kroger and Kimberly-Clark are “essential item” stocks, with the former being a major grocery name and the latter a producer of tissue and personal care items.

The TSX saw similarly few tames ticking higher as Thursday wore on, with only four names standing out as the index lost more than 640 points (4.1%) in just a few hours. The TMX Group was just about in the green, while some unlikely names such as Transcontinental (up 5%), HEXO, and Jamieson Wellness saw some gains.

Let’s break down why these names have outperformed. Let’s take the short view first. Thursday was disastrous, seeing a sea of red engulf all corners of the TSX, except for very few exceptions: Transcontinental bounced on a positive quarterly report, while cannabis investors brushed off market fears. Taking the longer view, names like Barrick Gold and Alimentation Couche-Tard are low-risk plays.

Another way to single out the best-performing names on the TSX is to compare share prices with last year’s price tags. Names that stand out include CN Rail, Barrick Gold, Alimentation Couche-Tard, Shopify, Franco-Nevada, Waste Connections, and Constellation Software. Taking the longer view helps to cut through the headline blur and hype to identify which names are truly outrunning the pandemic.

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 and Netflix. Tom Gardner owns shares of Netflix and Shopify. The Motley Fool owns shares of and recommends Canadian National Railway, Constellation Software, Netflix, Shopify, and Shopify. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC, Canadian National Railway, HEXO., HEXO., TMX GROUP INC. / GROUPE TMX INC., and TRANSCONTINENTAL INC A.

More on Coronavirus

Business success with growing, rising charts and businessman in background
Coronavirus

1 Growth Stock Every Canadian Investor Should Consider Right Now

This growth stock saw shares pop 10% on June 20, as one analyst stated there is a significant opportunity to…

Read more »

Aircraft wing plane
Coronavirus

Bombardier Stock Merge: What it Means for Investors

Bombardier (TSX:BBD.B) stock went through a reverse stock split on June 13, turning 25 shares into one in one swift…

Read more »

Aircraft wing plane
Coronavirus

Air Canada (TSX:AC) Stock: Ready to Take Off?

While Air Canada is handling what it can control really well, there are many worsening macro headwinds that will likely…

Read more »

rail train
Coronavirus

Bull or Bear: Why Analysts Changed Their Tune on Aecon Stock

Analysts had been champing at the bit for the construction company, but the tides have turned.

Read more »

Biotech stocks
Coronavirus

Is Bellus Health Stock Still a Buy After 30% Earnings Jump?

The biotech continues to make progress on obtaining FDA approval for its chronic-cough therapy.

Read more »

grow dividends
Coronavirus

Goodfood Stock Likely to Double in 2022!

Goodfood (TSX:FOOD) stock has had a huge rise and fall in the last few years. But at $1.85 a share,…

Read more »

grow dividends
Coronavirus

Canfor Stock Pops 5% as Sales Climb 15% YOY

Canfor (TSX:CFP) stock remained positive about its future in the global lumber market after profits climb 15% year over year.

Read more »

edit Safety First illustration
Coronavirus

2 Crash-Proof TSX Stocks I’d Buy With $5,000

These two TSX stocks have proven they can handle this economic downturn and likely will continue to be safe far…

Read more »