A few more quarters of pain seem likely as the pandemic drags on. Portfolios are at risk from a sterile economic landscape. That said, though, investors looking for long value plays on an eventual recovery do still have some quality names to pick over. While it may take some time to see improvements, certain areas should see gains once a successful vaccine has been made widely available.
The five names that we will be looking at today are Leons Furniture, Transcontinental, Westshore Terminals, Clairvest Group, and Aecon Group. This is a diversified mix, leaving room open for investors to mix and match without overexposure.
Furniture sales have been rather more solid than other retail areas. Having lost 12.8% on average in the last 12 months, Leons Furniture’s share price has displayed stronger resilience than the Big Five banks. A 3.6% dividend yield is supported by diversified revenue streams.
These include home furnishing, mattresses, appliances, and electronics – all of which are arguably suitable for a “stay at home” portfolio segment.
Up 28% since May, Transcontinental is a wide-moat pick in a niche area that mixes flexible packaging and printed material. This stock is a surprise defensive pick due to its involvement with food packaging.
As such, this makes this satisfying dividend stock (see a yield of 5.8%) a related pick for consumer staples investors. Its multiples couldn’t be better, with a P/E of 9 times earnings and P/B of 0.8 times book.
Key industrials stocks to buy for a bouncing market
Westshore Terminals has seen its share price slip as the coal industry faces a barrage of headwinds. Down by almost 20% since this time last year, Westshore has certainly had a tough time of it. However, bullish investors seeing a strong recovery ahead could gain by stacking chewed-up Westshore shares. With a growth in energy demand from rebooted industrial activity, Westshore shares could appreciate fast.
Private equity management firm Clairvest trades below its book price, with a P/B of just 0.85 times book. The upside potential here is palpable: Clairvest is a slow-growing name to hold for years of steady appreciation.
A recovery will see Clairvest improve as its assets – some owned outright and some held in partnerships – likewise see an improvement. Down 8.4% in 12 months, though, this name has been fairly resilient.
Aecon saw its revenues drop during the year’s second quarter. The stock was down 4.2% on average last week amid a dismal earnings season. Overall, though, Aecon has lost 32% in the last 12 months of trading. This leaves investors with the decision: Is this stock a falling knife? And if so, has it hit the bottom? Analysts are arguing that the worst is behind us as we grapple with the pandemic. The worst could be behind Aecon, too.
Construction is likely to be one of the fastest growing industries upon a recovery. This makes chewed up names such as Aecon a strong choice right now for the long-term value buyer.
Transcontinental would make a good counter-investment, having proved popular in recent months, with a rich yield and consumer staples access.
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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. The Motley Fool recommends LEONS FURNITURE, TRANSCONTINENTAL INC A, and WESTSHORE TERMINALS INVESTMENT CORP.