Want to make a million? The 2020 stock market crash provides you with a great opportunity to do just that. Okay, the consequences of Covid-19 for the global economy over the next few years will be colossal. But with the right investment strategy, the recent crash provides FTSE 100 investors the chance to squeeze every last drop of profit out of their invested capital.
The FTSE 100 is off March’s 10-year lows, though there remain many brilliant blue chips trading at rock-bottom prices. This provides an excellent opportunity for eagle-eyed share pickers to buy in low and watch their shares steadily gain value as the global economy recovers over the next five to 10 years.
One FTSE 100 share I have my eye on today is Smith & Nephew (LSE: SN). Its share price has fallen almost a fifth in value during the past six months. It’s a great opportunity for dip buyers to play the healthcare giant’s long-term growth story.
Smith & Nephew has seen demand for its artificial limbs and joints sink following the Covid-19 outbreak. Underlying revenues dropped 29% in the second quarter as non-critical procedures were cancelled across its major territories.
Revenues are already improving, though, with lockdown measures being rolled back (sales fell just 12% in June compared with 47% in April). And investors can now focus back on Smith & Nephew’s bright long-term outlook, one driven by rising healthcare spending in its gigantic US and Chinese markets. Some analysts reckon the global artificial joint market will grow at a compound annual growth rate of around 5% through to 2024.
City brokers expect the FTSE 100 company to bounce back in 2021 with an 53% earnings jump. I’d buy it today and hold it for the rest of the decade.
I bought this FTSE 100 hero!
I’d also consider buying Diageo (LSE: DGE) shares following its 15% share price decline since mid January. I actually own the FTSE 100 beverages giant in my own Stocks and Shares ISA. And I’m considering buying more following the recent dip.
Diageo sold off as investors feared the impact of bar and restaurant closures on its bottom line. But like Smith & Nephew its outlook is improving as pubs and eateries open their doors again. In fact, given the correlation between economic downturns and alcohol sales I reckon the Guinness manufacturer can look forward to a couple of extra-profitable years.
I bought this FTSE 100 share because of the immense brand power of its drinks all over the globe. It allows Diageo to keep growing profits at all stages of the economic cycle. The company’s great track record when it comes to innovation and successfully exploiting consumer trends also excited me. Its rising focus on the premium and low calorie parts of the market have been particularly triumphant in recent years.
No wonder City analysts expect Diageo’s bottom line to rebound in 2021 and rise 8%. This is one FTSE 100 share which I think, like Smith & Nephew, is too good to miss following the stock market crash. I think it could help you make a million.
Royston Wild owns shares of Diageo. The Motley Fool UK has recommended Diageo. 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.