Stocks and sectors to invest in view of the rebound after the coronavirus crisis: strong sales on the financial markets have led to firm prices but analysts warn, act prudently
In recent months, sales on the financial markets have led to balance prices. Valuations have fallen to historic lows for many stocks and there is a new interest in equities among traders. The goal is to start buying, perhaps in small steps, to have those stocks in the portfolio that will rise at great speed as soon as the situation is calmer. However, prudence is still great: to avoid new losses, it is therefore necessary to move in defense.
The stock market situation during the coronavirus pandemic
Some indications come from past numbers. The first quarter of 2020 was the worst fifth ever since the Second World War for stock market returns, with a drop of 22%. It is worth noting that similar drops in 1974, 1990, 2002 and 2008 were followed, two quarters later, by some of the strongest rebounds and then began several years of market growth. For analysts, looking to the past it is therefore appropriate to carefully examine the buying opportunities offered by the market. But always by monitoring the liquidity risks of the companies in which to invest.
Opportunities are not lacking. The current context presents uncertainties due to a new form of crisis in the real market, but there are also opportunities for all those companies that have a solid business, few debts and above all a lasting competitive advantage.
Investments in stocks recommended by analysts
Analysts advise investing in shares of large companies such as the American Waste Management (waste treatment and integrated environmental solutions), those that offer a type of business that is hardly sensitive to crises and operates in a sector with few competitors. Even the giant Microsoft, leader in PC operating systems with Windows but also in new technological forms such as Teams and other apps very useful for business management, is on the list of favorite titles. It is also liked for the research and development activity in the field of blockchain which could put it at the top of the new frontier of certification.
In Europe, the focus is on Unilever, a dutch-british multinational holding 400 of the best-known brands of large retailers. In all cases, these are companies that have the characteristics to keep up with the current crisis and to be able to start off once the worst is over.
In Italy it may be interesting to invest in shares of family holding companies, such as Exor of the Agnelli family: With the sale of PartnerRe, Exor will soon have a lot of liquidity in its belly and will certainly be ready to support new operations. Or the case of Tamburi Investment Partners, investment and independent italian merchant bank.
Investing in stocks during the coronavirus crisis: what to watch out for
Prudence must remain high: the real impact of the pandemic is difficult to define and unemployment will be the real problem of the current forced closure of many businesses. It is therefore necessary to carefully analyze your savings and verify that the investments made comply with your risk profile.
In the medium term, global economic growth is likely to be permanently compromised by consumer hysteria following the shock, and by the fiscal disregard of the past. Therefore, sectors that are not sensitive to the trend of the economy are likely to have an advantage over the “value” shares, whose valuations may still remain low for a long time.
Technology stocks, in their broadest sense, which includes platform-based activities, medtech, biotech and healthcare, are likely to outperform.