Five stocks that can weather the storm

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Stormy weather ahead – but some stocks could do well. Photo: Alamy

The Covid-19 pandemic, trade disputes with China and more recently the conflict in Ukraine have caused huge supply problems – but some companies, including UK online estate agent Rightmove (RMV) and US giant of social media Meta Platforms (FB), have managed to weather the storms better than others.

There is a saying “It’s an evil wind that blows on no one”, which basically means that every bad situation must have good results. So where are these “good results” on the stock market? Which companies could benefit or at least be immune to the impact of global supply pressures?

Laith Khalaf, head of investment analytics at AJ Bell, suggests you can probably avoid the worst of supply chain problems by focusing on companies that offer services rather than goods and are therefore less impacted by logistical problems. In the UK stock market, it chooses Rightmove (RMV) and Legal and General (LGEN), and in the US, Meta (FB) – formerly Facebook.

Christopher Rossbach, chief investment officer at investment manager J Stern & Co, says his technology exposure is heavily focused on software and internet companies. Like Khalaf, he chooses Meta, on the grounds that it doesn’t have the same semiconductor supply issues associated with hardware companies.

He also names Eaton (ETN), a global technology leader in electrical systems, which he says has changed its supply chains to multi-sourcing, adopting digital logistics planning solutions and rethinking products.

Jamal Abida Norling, CEO and chief investment officer of investment manager Ohman, said his stock selection during the period focused on quality companies with good growth characteristics. As an example, he chooses Veeoner, which he calls a “quality company with a strong track record of acquisitions.”

Let’s take a closer look at these five preferred stocks.

eaton

Founded in the USA but now a global company with headquarters in Dublin, Ireland, Eaton (ETN) is a power management specialist.

At the end of March 2020, as the impact of Covid-19 began to be felt across the world, the stock price stood at $74.42 – it is now $149.95.

Eaton Price Table (ETN)

Move right

Online property portal Rightmove (RMV) is well positioned to benefit from what has been a buoyant property market following the lockdowns.

The start of 2022 painted a positive picture for investors, with average UK property values ​​up 11.2% on the year to January, marking the best start to the year for 17 years, according to the Nationwide lender.

Recent figures from rival portal On The Market show that 48% of residential properties were sold under contract within 30 days of being announced in January, up from 36% in January 2021, indicating strong buyer demand. Whether this continues as inflation bites and the cost of living rises is up for debate.

Rightmove has also been criticized for the high listing fees it charges real estate agents, but several new challengers have so far failed to unseat the market leader from its dominant position.

London-listed Rightmove’s share price was around 487p, after hitting a high of 795p in early December 2020. The share has since fallen back to around 620p.

Rightmove Pricing Chart (RMV)

Legal and general

It has been a steady year for London-listed financial services provider and asset manager Legal & General (LGEN).

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At this time last year, the share price was around 272p, and it fell to 243p at the end of February before falling back to the current level of 262.80p.

Legal and General Fee Schedule (LGEN)

Metaplatforms

The American giant (FB) is the parent company of Facebook, Instagram, WhatsApp, Workplace and Messenger (among others).

Meta Platforms shares pulled back somewhat in 2022 and one could argue that this has created a buying opportunity.

MarketBeat currently lists Meta Platforms as having a buy consensus rating. The average rating is based on 32 buy ratings, 11 hold ratings and 1 sell rating.

The strength of the company’s digital advertising is well documented – Facebook currently has over 10 million advertisers on its platform. And he continues to spend a lot to develop his offer.

However, in the fourth quarter of 2021, Facebook saw its user numbers plummet. There are also concerns whether the negative media attention late last year, when a former senior employee accused the company of putting profit before the public good, will resurface. There is the possibility of tighter regulation on social media platforms.

Meta Platform (FB) Pricing Chart

Veoneer

In June 2018, Swedish company Autoliv (ALV) spun off its automotive technology business into a separate company, Veoneer (VNR).

Veoneer produces sensors, control units, software and systems for Advanced Driver Assistance Systems (ADAS) and Automated Driving (AD).

Nasdaq-listed Veoneer’s stock price has risen steadily over the year, rising from just over $24 last year to around $37 today.

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