The recent FTSE 100 stock market crash suggests there are numerous cheap income and growth stocks currently available. These businesses might experience significant uncertainty in the short run. But many have the potential to deliver substantial recoveries and high total returns over the long term.
As such, now could be a great time to snap up some of these bargains for the long run.
FTSE 100 tech leader
Since the beginning of the year, FTSE 100 tech champion Rightmove (LSE: RMV) has recorded a 24% drop in its share price. It’s easy to see why investors are selling shares in the property portal. The coronavirus crisis has frozen the UK housing market. This is likely to place pressure on Rightmove’s near-term income.
This may cause a further decline in the company’s shares. However, the UK property market is likely to recover over time. As the most significant player in the sector’s online marketplace, this suggests Rightmove’s long-term potential is attractive.
The housing market has experienced many booms and busts over recent decades. The market has always recovered. The same is true of the FTSE 100.
Therefore, while there could be further difficulties ahead for the sector, over the long run, activity in the property market should recover. Factors such as low interest rates, reduced supply, and schemes such as Help to Buy could also boost the industry over the coming years.
With this being the case, now could be an excellent time to capitalise on the market’s short-term focus and buy shares in FTSE 100 champion Rightmove.
Coronavirus is also having a significant impact on Relx (LSE: REL), the global provider of information-based analytics and decision tools. The group’s exhibition business, which accounted for 16% of revenues in 2019, has seen income evaporate.
Still, the rest of the FTSE 100 business seems to be holding up well. Sales of the company’s risk analysis and legal operations, which accounted for 84% of revenues in 2019, expanded in Q1.
Relx believes any downward trend is unlikely to last with the majority of its income subscription-based. That suggests the impact on the business should be limited.
The FTSE 100 firm also is supporting the fight against Covid-19. It’s “mobilising” its scientific, technical and medical “research content, data analytics know-how, and clinical insight.” The company is working with the WHO, OSTP, NIH and the Wellcome Trust to help support the battle against the virus.
This suggests that while the business might see a decline in near-term revenues, over the long run, it’s well placed to recover. Relx may even be able to improve on its competitive position as a result of the uncertain economic outlook.
As such, with shares in the business down 12% from their 52-week high, now could be an excellent time to capitalise on the firm’s weak near-term outlook through buying its shares.
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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended RELX and Rightmove. 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.