Stock market crash: 2 FTSE 100 stocks I’d buy now for the rebound

A stock market crash can present great opportunities for long-term investors. Here are two FTSE 100 (INDEXFTSE: UKX) stocks with rebound potential.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Business development to success and FTSE 100 250 350 growth concept.

Image source: Getty Images

A stock market crash can present fantastic buying opportunities for long-term investors. No crisis lasts forever and, in the past, equity markets have always bounced back.

With the FTSE 100 down nearly 25% year-to-date, I’m seeing plenty of attractive buying opportunities right now. Here’s a look at two FTSE 100 stocks that I’d buy for the stock market rebound.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

Stock market crash: this stock has fallen 37%

The first FTSE 100 stock I want to highlight is wealth manager St. James’s Place (LSE: STJ). Its share price has fallen from near-1,200p to just 760p in the last two months. That represents a decline of about 37%.

The reason I think STJ looks interesting at the moment is that I believe the recent stock market crash could potentially boost demand for trusted face-to-face financial advice going forward. With so much economic uncertainty, I think there’s a chance plenty of people (particularly retirees) will turn to financial experts for help.

I also like the fact that St. James’s Place’s clients are generally very happy with the services it offers. Last year, 89% of clients said they were either satisfied or very satisfied with their overall relationship with the group. In addition, 93% said they would recommend the group to others. Clearly, the wealth manager offers a good service.

Of course, in the short term, the FTSE 100 company’s profits are going to take a hit. This is because much of its fees are linked to assets under management, which will have fallen in the recent stock market crash. However, the medium-to-long-term story remains attractive, in my view. I think the stock has the potential to bounce back as stock markets rebound in the years ahead.

JP Morgan currently has a price target of 937p for STJ. That’s 22% higher than the current share price.

This FTSE 100 stock looks oversold

Another FTSE 100 stock I believe has the potential to rebound is DS Smith (LSE: SMDS). It’s a leading packaging company specialising in manufacturing cardboard boxes. Its share price has fallen nearly 25% in the recent stock market crash.

Looking at DS Smith’s recent Covid-19 trading update, issued on 8 April, I think the near-25% share price fall here is unjustified. For a start, the company advised that trading had remained “resilient” with “relatively limited impact” from Covid-19. Secondly, it said supplies into the grocery sector had been “very busy” and that e-commerce has also been strong in most categories.

On top of this, it said its balance sheet and liquidity profile are strong, with around £1.4bn of facilities currently undrawn. Additionally, the group advised that its net-debt-to-EBITDA ratio was anticipated to be around 2.0 at 30 April, down from 2.3 at the end of December. So, overall, the group appears to be in pretty good shape.

The long-term story here remains attractive, in my view. Across the world, people are increasingly doing more shopping online (Covid-19 has boosted this), which translates to more demand for packaging. DS Smith looks well-placed to capitalise.

I’m convinced that those buying now will be rewarded in a few years time.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Edward Sheldon owns shares in St. James's Place and DS Smith. The Motley Fool UK has recommended DS Smith. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Tabletop model of a bear sat on desk in front of monitors showing stock charts
Investing Articles

3 reasons why the stock market is falling today

Jon Smith explains several factors that are contributing to the stock market falling today, and his thoughts on them.

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

2 stocks that are great long-term picks

As recession fears weigh on share prices, our author has found two stocks with strong long-term prospects. He’s looking at…

Read more »

Tanker coming in to dock in calm waters and a clear sunset
Investing Articles

2 lesser-known penny stocks to buy now and hold for 10 years!

I’m currently looking at penny stocks that could help my portfolio grow over the next 10 years. Despite recent volatility,…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

Here’s 1 of the best stocks to buy for passive income

Jabran Khan delves deeper into one of the best stocks to buy for passive income, which is a FTSE 100…

Read more »

Playful senior couple in aprons dancing and smiling while preparing healthy dinner at home
Investing Articles

IAG shares are down 15% amid travel chaos! Is now the time to buy?

IAG shares have collapsed over the past month. Shareholders had hoped for a strong Q2. But maybe this represents a…

Read more »

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

UK shares: 1 dividend stock I own to combat inflation

This Fool is looking for quality UK shares to combat inflation through consistent and stable returns as well as growth…

Read more »

A young woman sitting on a couch looking at a book in a quiet library space.
Investing Articles

Here’s how I’m investing as stock market volatility soars!

2022 has seen an explosion in stock market volatility. But with the right approach I think ongoing choppiness could turbocharge…

Read more »

Business development to success and FTSE 100 250 350 growth concept.
Investing Articles

2 top FTSE 100 shares to buy before a new bull market

On my search for FTSE 100 shares to buy before the recovery, I have found two growth options that could…

Read more »