Stocks to buy in a recession

Stocks to buy in a recession

Posted: MikeLee On: 12.07.2017

Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. In this vein, O'Reilly Automatic, Inc. ORLY , Zoetis, Inc.

Make money during any market conditions with recession-proof stocks. The first point -- that more older cars will be used -- suggests demand will hold up in a recession. As you can see below, all three of the leading players in the industry managed to grow revenue during the recession.

ORLY Revenue Quarterly YoY Growth data by YCharts. In case you're wondering, the big revenue jumps for O'Reilly Automotive in and Advance Auto Parts in are the result of acquisitions. O'Reilly Automotive's acquisition of CSK Auto Corporation saw the company expand its dual-store strategy.

stocks to buy in a recession

O'Reilly Automotive is well positioned for any market condition. ORLY Operating Margin TTM data by YCharts. ORLY data by YCharts.

stocks to buy in a recession

The second sector to look at is animal health, and in particular, the companion animal market. Livestock can be cyclical -- after all, commodity prices fluctuate considerably -- but recessions don't usually stop people from caring about their pets. It's not a foolproof argument, as economic slowdowns tend to cause people to visit veterinary practices a bit less, but the evidence is that animal health does well enough in a recession. For example, I've delved into Pfizer 's annual reports, and here's how its animal-health sales fared between and , after which Zoetis Inc.

Moreover, Zoetis isn't just a stock with defensive properties. Management forecasts revenue growth of between 5. In addition, now that Zoetis is separate from Pfizer, investors have a chance to get direct exposure to animal health without the regulatory and pipeline uncertainty inherent in big pharma stocks.

Now, I know what you're thinking -- but bear with me. The rationale here is that the global economy is in uncharted territory with regard to current debt levels and recessions.

Top 10 Dividend Stocks to Buy Before the Next Recession - TheStreet

The chart below shows debt-to-gross domestic product GDP for some major countries and the eurozone. In every case, the debt load is higher than it was entering the last recession, and there appears to be little political will to do much about it. Government Debt data by YCharts. Perhaps the next recession really will see gold massively outperform, as the doom and gloom merchants have long told us it will.

Lee Samaha has no position in any stocks mentioned. The Motley Fool owns shares of O'Reilly Automotive.

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A firm believer in behavioural finance and an Austrian approach to the business cycle. Follow me on Twitter to receive quick and thorough analysis of your favorite stocks. Skip to main content The Motley Fool Fool. Premium Advice Help Fool Answers Contact Us Login.

stocks to buy in a recession

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