Every stock market crash provides opportunities for long-term investors. This crash is likely to be no different. With FTSE 100 share prices down significantly this year, many compelling opportunities are emerging.
Of course, in the short term, the FTSE 100 could fall further. No one knows what’s going to happen tomorrow, or next week. However, in the long run, the stock market should recover.
With that in mind, here’s a look at three FTSE 100 stocks I’d snap up while share prices are low.
FTSE 100 champion
One stock I’d buy is Unilever (LSE: ULVR). It’s a consumer goods company that owns a powerful portfolio of trusted brands, including Dove and Domestos.
Unilever appears to be a classic Warren Buffett-type stock. For a start, its brands provide a strong competitive advantage. Secondly, it’s able to generate relatively consistent earnings throughout the economic cycle. Third, it’s highly profitable, generating a return of 20%+ on every euro invested. And finally, it has a superb long-term track record.
ULVR shares have held up well in the recent stock market crash, as I expected. However, I wouldn’t be surprised to see near-term share price weakness if the FTSE 100 falls further. I’d view any such frailty as a buying opportunity.
Another FTSE 100 share I’d buy while the market is down is GlaxoSmithKline (LSE: GSK). It’s a healthcare giant that specialises in pharmaceuticals, vaccines, and consumer healthcare products.
The reason I like GSK is that it appears well-placed to benefit from a number of dominant structural trends in the years ahead. Firstly, there’s the world’s ageing population. This is likely to mean increased demand for healthcare. Then, there’s the rise in wealth across the emerging markets. As wealth rises, so does healthcare spending. Finally, there’s the increasing prevalence of diseases, such as chronic obstructive pulmonary disease (the second most common lung disease in the UK after asthma).
I also like the fact that GSK operates in a defensive sector. No matter the state of the economy, people are still likely to need medication and healthcare products.
GSK shares were trading near 1,800p at the start of the year, yet today are significantly cheaper. I’d take advantage of this share price weakness and buy for the long term.
Finally, another FTSE 100 stock I’d buy while share prices are low is JD Sports Fashion (LSE: JD). I like JD because it’s a play on one of the most dominant trends in the clothing industry today – athleisure.
Throughout the world, demand for the sports casualwear/fitness crossover has skyrocketed in recent years. And this trend looks set to continue. In 2018, the athleisure market was valued at $155bn. Yet by 2026, it’s forecast to be worth $257bn. That’s an annualised growth rate of 7% per year. “The adoption of the athleisure trend is here to stay and it’s going to accelerate,” says Adam Goldenberg, CEO of fashion retailer TechStyle Fashion Group.
Of course, JD’s sales are likely to take a hit in the near term. Its stores are closed, and discretionary income is likely to fall. However, the FTSE 100 company’s share price has fallen a long way this year, meaning a lot of risk is priced in.
Under 500p, I think the stock offers great value.
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Edward Sheldon owns shares in Unilever, GlaxoSmithKline and JD Sports Fashion. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Unilever. 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.