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ISA investors! Are these stocks brilliant buys or terrible traps for the global recession?

A global recession is approaching at pace. It’s one whose scale will likely have huge social, macroeconomic, and geopolitical implications long beyond the current decade. With this in mind it’s up to ISA investors to shape their stocks portfolios in line with this ‘new normal’.

In this environment I think buying shares in Cranswick (LSE: CWK) is a good idea. Broader retail conditions might suffer during economic downturns but our need for edible goods remains constant. This is why City analysts expect this FTSE 250 meat manufacturer to keep growing earnings through the next three fiscal years at least.

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These defensive qualities are reflected in Cranswick’s elevated rating. At current prices it sports a price-to-earnings (P/E) ratio of around 21 times for the financial period to March 2021. But so what? With corporate earnings expected to come under sustained pressure during the post-coronavirus period, firms like this that are able to keep growing earnings are worth their weight in gold.

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Set to short circuit?

Conversely, Dixons Carphone (LSE: DC) is a share I think all sensible ISA investors need to avoid at all costs. Trading has been strong for the electricals retailer during the lockdown period but I think it’s only a matter of time before its tills start to fall silent.

On Friday, Samuel Miley, economist at the Centre for Economics and Business Research, summed up my fears in a nutshell. He commented that consumer activity is expected to remain suppressed… with lingering fears over the virus, the continued need for social distancing, and wider economic uncertainty all serving to restrict spending”. He went on to add that household consumption won’t reach pre-crisis levels until the mid-2020s.

The landscape is particularly dangerous for sellers of more expensive products and those that are deemed to be non-essential (TVs, games consoles, cameras and the like). It’s no wonder that City analysts expect annual earnings at Dixons Carphone to fall again despite the sales strength of recent months, then. So I don’t care about the FTSE 250 firm’s low forward P/E ratio of 6 times. It’s far too risky for my liking.

A superior ISA buy

I’d much rather put my investment capital to work with Tristel (LSE: TSTL). This isn’t a share that comes cheap. In fact its forward P/E multiple of around 40 times sails above that of Dixons Carphone. But I reckon this is an appropriate reflection of its exceptional defensive characteristics.

Healthcare shares are some of the safest flight-to-safety shares out there. Suppliers of medical services and drugs tend to be more recession-proof than most other businesses. Tristel, though, could well see demand for its products ignite following the coronavirus crisis. Why? It is a major supplier of disinfectant products that are used in hospitals, doctor surgeries, nursing homes and ambulances.

This is why City brokers expect annual earnings at Tristel to keep rising at mid single-digit percentages through to 2021 at least. This is one brilliant stock for ISA investors seeking peace of mind during the imminent global recession.

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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.