Three stocks that can cope with Covid-19
Professional investor Zehrid Osmani of the Martin Currie Global Portfolio Trust, picks three stocks that he thinks should be able to weather the coronavirus storm.
The outbreak of Covid-19 and its ripple effects across the global economy continue to cloud the outlook for long-term investors. It is especially important to assess the investment risks posed by the ongoing impact on various industries’ supply chains.
It is crucial to assess industry and company risk across the whole value chain and watch out for companies exposed to supply-chain risks. Then you will be ready and able to respond efficiently during times of market panic, turning fear into opportunity.
Our emphasis on supply chains has facilitated investment in businesses with sustainable franchises, strong pricing power, low disruption risk, high returns on invested capital (a key gauge of profitability) and strong balance sheets.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
These are companies better able to weather the short-term storm that the coronavirus has generated across both the supply and demand side of global economies and along whole supply chains.
Resilience in Italian luxury retail
We believe that companies with more wholesale exposure will be at higher risk. However, established brands with stronger balance sheets will be in a better position to withstand the inventory dislocation caused by the marked reduction in customers.
The Italian luxury fashion retailer Moncler (Milan: MONC) is a good example of this resilience. Thanks to its limited wholesale exposure and strong inventory control, it stands to benefit from strong pricing power over the long term.
We believe that the structural growth potential of the company and its ability to innovate remain strong despite the global economic damage done by the pandemic.
Medical monitoring devices
We also hold the global medical technology company Masimo (Nasdaq: MASI), which develops and manufactures innovative non-invasive patient-monitoring technologies. Products range from fingertip pulse-measuring devices to wearable thermometers that send data to smartphones.
We view Masimo as an extremely high-quality business stewarded by an experienced management team, and as such we are confident in its ability to navigate turbulent operating environments – witness the group’s recent relative performance this year.
Potential virus-induced supply chain problems for Masimo could come from consolidated manufacturing facilities or single-source component suppliers being temporarily disrupted. However, we continue to expect a very strong performance from the company.
Ferrari roars ahead
Inventories in this sector are generally low, and so there is a higher risk of disruption along the supply chain and onto the car manufacturers. In terms of our portfolio holdings, Ferrari (Milan: RACE) might look the most vulnerable, with its entire manufacturing base in Italy.
The company can shift some of its production base around the different models, notably its limited-edition cars, to ensure that capacity is managed efficiently. This is testimony to the company’s pricing power and unique product offering, which should help it get through the short-term volatility in better shape than the rest of the sector.
-
Lloyds, Halifax and Bank of Scotland to shut another 45 branches
Lloyds Banking Group, which includes Halifax and Bank of Scotland, is set to close a further 45 branches in 2024 - find out if a branch near you is closing.
By Vaishali Varu Published
-
US stock trading app Robinhood launches in the UK
The low-cost trading platform has opened another waiting list for British investors - following two failed attempts to launch in this country - and is hoping to be fully operational next year.
By Ruth Emery Published
-
M&S shares shift from frumpy to fabulous as pre-tax profits are up by 56%
M&S is performing strongly and has announced it will pay a dividend for the first time since the pandemic.
By Dr Matthew Partridge Published
-
The rise and fall of Sam Bankman-Fried – the “boy wonder of crypto”
Why the fate of Sam Bankman-Fried reminds us to be wary of digital tokens and unregulated financial intermediaries.
By Jane Lewis Published
-
Three defence stocks set to flourish in an era of instability
A professional investor tells MoneyWeek where he’d put his money. Tom Bailey highlights three defence stocks that look promising.
By Tom Bailey Published
-
EasyJet shares are volatile but enticingly cheap
The EasyJet group has shrugged off the cost-of-living crisis, restarted dividends and shares look good value.
By Dr Matthew Partridge Published
-
The fallout from the war on landlords
Investors fleeing the market and the rise in rents are affecting us all.
By Charlie Ellingworth Published
-
Eight small-cap trusts to bet on
Funds investing in market minnows are out of favour, but the cycle will turn. Here are the best bets.
By Max King Published
-
Trust in US TIPS to beat inflation
In an inflationary market TIPS, the US Treasury Inflation-Protected Securities are most compelling says Cris Sholto Heaton.
By Cris Sholto Heaton Published
-
What is Vix – the fear index?
What is Vix? We explain how the fear index could guide your investment decisions.
By Dr Matthew Partridge Published