£1,000 to invest? Here are 2 stocks I think could rally despite a second stock market crash

Jonathan Smith explains why he thinks that CRH and Experian could both outperform peers and do well, even if we see a second stock market crash.

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If you’re looking to deploy £1,000 in the stock market, congratulations. The first wave of the 2020 stock market crash provided some great long-term investing opportunities. Yet just blindly investing the thousand into any stock doesn’t guarantee you’ll make money.

The assumption that everything will rally in the long run isn’t true. If we do see a second stock market crash this summer, then some stocks will underperform massively. So it’s important to invest the funds in stocks that could perform well, even if we see a sustained recession and a low stock market for a while to come.

Safe as houses?

CRH (LSE: CRH) is one of the largest manufacturers of building supplies in the world. It operates under various different brand names, the most widely known being Tarmac. It has a presence globally, with a particularly large exposure in the US and Europe.

The share price is actually flat on a year-to-date basis. It did take a hit of more than 40% in the March sell-off, as construction ground to a halt around the world. So what would be different in a second wave or market crash?

The key difference is that governments are now prepared, and have already started huge infrastructure spending initiatives. Donald Trump has spoken of a $1trn infrastructure package he wants for the US. The recent EU recovery fund also has allocations for infrastructure spending. The net benefactors from this will be firms like CRH. It will be best placed to supply a lot of the materials (ranging from asphalt to other aggregates) and stands to profit from this demand.

So even if we see a second stock market crash as retail demand falls, projects such as the above should protect CRH from a large fall in revenues, and possibly even see the share price rally.

Where credit is due

Experian (LSE: EXPN) is a credit reporting company that helps both individuals and businesses. On a year-to-date basis, the share price is actually positive. It also saw a much shallower trough in the March sell-off, down around 29%. 

In announcing financial results last month, revenue jumped 6.5% and the firm said that Covid-19 had only a “limited financial impact” on the business. This is positive from my point of view, and I think the virus will have limited impact going forward. This is because the credit data that the firm gathers looks at everything from consumers’ spending habits to debt levels.

This data is going to be even more in demand this year, as businesses try to figure out how to get consumers to spend as they reopen operations. Consumers too will be very conscious of their credit scores, especially with most people tightening their belts. The bottom line is that the data and services Experian provides should be of great need in the current world climate. From this, I make the share price a buy, even despite a potential second market crash.

Don’t fear the second stock market crash

Whatever happens in the stock market this summer, you don’t have to be scared of it. The two great shares above, I feel, will do well even with a crash. So with £1,000 in the tin, investing now is certainly not a bad idea.

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 assessed. Consider taking independent financial advice.

Jonathan Smith does not own shares in any firm mentioned. The Motley Fool UK has recommended Experian. 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.

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