Some investors make the mistake in thinking that after a stock market crash, they should buy anything and everything. This isn’t true. Some sectors will have been hit very hard by the catalyst which caused the crash in the first place. Firms within these sectors may be ones to stay away from.
As a smart investor, it pays to be selective in the stocks you buy after a market crash. Finding companies that have been oversold but still have a fundamentally sound business model is key. This leads me to my top shares to buy now!
Defensive stock to buy
Don’t be misled by the name of Coca-Cola HBC. The HBC (Hellenic Bottling Company) is the more important part of the company name. The firm is one of the largest bottlers of Coca-Cola, but isn’t the actual Coca-Cola company (that’s listed in the US). Aside from drinks, the firm has also expanded into food operations in recent years, via buying a Serbian biscuit company.
The share price has fallen over the course of this year, in line with the FTSE 100 as a whole. But I’d bucket the firm into the defensive stock category. The firm is closely linked to the success of Coca-Cola, which in itself is a mainstream, affordable soft drink. Even with a downturn in the global economy, I’d expect sales to remain fairly unaffected (compared to those of higher priced energy drinks). This should help the share price outperform peers, making it one of my top shares to buy now.
Growth stocks to buy
The Boohoo share price has been hit twice recently. Firstly, the stock market crash saw the stock tumble significantly. Add on to this the recent news of poor working conditions and pay from one of its suppliers, and the stock now trades under 300p. When you consider the highs of the year are above 400p, there’s a good opportunity to make a profit from buying the stock now.
The crash in March was across the board, and wasn’t specifically aimed at Boohoo. As for the recent news story, it’s more of a reputational issue than financial. For that reason I wrote a piece on why I thought it could be the buy of the decade when it was trading around 230p earlier this week.
Finally, I’m still bullish on Persimmon, and the prospects for the share price to rally further. This pick ties in with my outlook for Brexit for the rest of the year. Given the desire of the UK government to strike a deal, domestic firms are likely to see a share price bump in the immediate aftermath of this happening. Construction is one sector which would certainly benefit from the Brexit uncertainty being taken away, with Persimmon leading the charge. It is still down 20% from its year-to-date highs, making it a top share to buy right now.
The stock market crash has provided some great opportunities that won’t hang around that long. The market has already been rallying since the lows in March. Yet all three stocks are still below the highs of the year so far, indicating further growth is definitely possible.
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Jonathan Smith owns shares in boohoo group. The Motley Fool UK has recommended boohoo group. 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.