If yesterday was anything to go by, we could be gearing up for another bout of volatility and, potentially, another momentous market crash. Of course, no one knows for sure, hence why I think it’s important to always have a list of quality stocks to buy should things take turn for the worse.
Here are three from the FTSE 100, all of which report to investors next month.
In just a few days (4 August), we’ll get full-year figures from drinks giant Diageo (LSE: DGE). Despite recovering alongside other stocks since March’s market crash, the Guinness owner’s share price is still 10% below where it was at the start of 2020 and a little over 20% off its all-time high.
At least some of this may be down to the rather bearish stance taken by some brokers. One — Bryan Garnier — believes it could take the beverage sector five years for alcohol volumes to return to where they were before the pandemic. Spirits could also underperform beer sales due to the consumers keeping an eye on their finances. With its premium brands, this could hurt Diageo in the near term, as could any hint of bars being forced to close again.
At Fool UK, however, we’re in for the long ride. Unless you believe that everyone will dramatically reduce their alcohol consumption over the next few months and years, the shares are surely a solid hold.
Buy on weakness
Investment platform Hargreaves Lansdown (LSE: HL) also reports to the market next month (final results on 7 August). Based on what it had to say in May, the numbers are likely to be really rather good.
Back then, Hargreaves reported adding 94,000 net new clients and £4bn of net new business over the four months to the end of April. Thanks to huge amounts of dealing, year-to-date total revenue was already up 13% to £448.1m.
As well as boasting rock-solid finances and a market-leading position, Hargreaves has a long history of generating huge returns on capital for its owners. The fact that US trading app Robinhood has now cancelled its UK launch suggests it’s likely to maintain its dominance on these shores for the foreseeable future.
If you believe people will go on investing for retirement post-coronavirus (which, of course, they will), then any significant drop in the share price over the next few months might be worth taking advantage of.
Mining for profits
A final FTSE 100 member reporting next month is miner BHP Group (LSE: BHP). It’s down to release results for the year to the end of June on 18 August.
BHP’s share price has now recovered to roughly where it was at the beginning of 2020. Had you the skill (or luck) to buy back in mid-March, however, you’d now be sitting on a near-80% gain. For such a massive company, that’s a remarkable turnaround.
Regardless of whether markets crash again in 2020, I think BHP could still be worth backing in the long term given the sizeable future demand for metals such as copper from electric car companies such as Tesla. The former does, after all, currently own and operate one copper mine in Australia and several in Chile.
Investing in anything commodities-related almost guarantees a choppy ride, but those willing to buy the world’s biggest miner and sit on their hands could be well rewarded.
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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo and Hargreaves Lansdown. 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.