Stripped supermarket shelves and angry shoppers over-filling their trolleys have been some of the abiding images of the coronavirus crisis. Panic buying of toilet rolls, soap, pasta and other so-called essential items may have increased the sense of impending doom.
But frantic shopper behaviour is something that could drive sales over at Naked Wines (LSE: WINE). That’s what news of surging demand at its recently-divested Majestic Wines stores suggests.
Apparently, “customers are filling their racks with wines from across Europe ahead of any potential disruption to supply lines caused by the Covid-19 outbreak,” the retailer says.
As a consequence, sales of Italian and French wines jumped 44% and 68% during the seven days to Tuesday. Sales of English wines have also more than doubled.
It’s perhaps little wonder Naked Wines’ share price has remained unchanged over the past month. This may mean the retailer doesn’t come cheap. The business is sporting a price-to-earnings (P/E) ratio of 37.1 times for the financial year to March 2021.
However, as a lifeboat in these troubled times, it could be considered worth the premium. City analysts expect annual earnings to double in this period. Majestic Wines’ latest release suggests it could remain on course to do so despite the coronavirus threat.
Business is booming
Buying shares in corporate restructuring firm Begbies Traynor Group (LSE: BEG) is another good idea as the coronavirus batters the UK economy. The company’s fallen 14% in value over the past month, versus the near-30% drop for the FTSE 100.
It’s no surprise this share has performed better than the broader market. In an increasingly-difficult environment, it’s likely the number of UK firms experiencing financial distress will increase. This will drive business flows at insolvency practitioners, like this AIM-quoted firm, steadily higher.
Let me give you an example. According Altus Group, the number of accommodation, food and beverage companies going into insolvency leapt 10.4% in 2019. This picture can only worsen. The number of hospitality providers experiencing severe financial difficulties is tipped to accelerate in the months ahead, as citizens self-isolate in increasing numbers. This bodes well for Begbies Traynor.
In great shape
Concerns over Brexit may have been relegated from the front page. But this is another issue adding immense strain to firms in 2020. Immense political and economic uncertainty has supported business activity at Begbies Traynor for well over a year now. More recently, it’s helped drive “strong organic growth” in the three months to January.
No wonder City analysts expect Begbies Traynor earnings to rise 18% and 14% in the fiscal years to April 2020 and 2021. In my opinion, this is one of the best shares to capitalise on current economic conditions in the UK, bolstered by its ongoing commitment to expansion via acquisitions.
Its rock-bottom forward P/E ratio of 12.9 times also provides an added incentive for dip buyers to pile into today too.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.