It is always going to be challenging to predict when the next stock market crash will occur. That is why I keep a list of FTSE 100 shares to buy in a market downturn.
Thanks to this list, I think I will be able to act quickly to take advantage of opportunities when they present themselves. So here are three FTSE 100 companies that I would acquire in a stock market crash.
Stock market crash shares to buy
The first company on my list is Intercontinental Hotels Group (LSE: IHG). A pandemic recovery play, I would buy this stock in a downturn, due to the strength of its brands.
Over the past 18 months, I have watched the enterprise struggle through the pandemic and start to claw its way back to growth on the other side. I have been impressed by its resilience and the group’s continued growth in a hostile market environment.
As the economy continues to recover from the pandemic, I think the demand for hotel accommodation will continue to increase. As one of the largest hotel groups globally, Intercontinental should benefit significantly from this tailwind. Therefore, I believe it could be an attractive addition to my portfolio at the right price.
Challenges it may face in the future include additional pandemic restrictions and rising costs, which may put consumers off its premium brands.
FTSE 100 events business
I would also acquire Informa (LSE: INF) for the same reasons. The business services group experienced a significant downturn last year as its event division witnessed a near-total collapse in sales.
However, the organisation’s diversification helped it pull through the crisis. Informa’s specialist data and information businesses have continued to grow and enabled the group to achieve its target of becoming free cash flow positive from January.
Management expects free cash flow to total £325m in 2021, which is impressive considering its challenges over the past 18 months.
Additional pandemic restrictions and competition in the data sector could hit these targets. These are the biggest challenges the group faces right now. Nevertheless, I am excited by Informa’s recovery potential and would jump at the chance to buy the stock at a lower valuation.
Global rebuilding
Throughout the pandemic, one sector that was generally allowed to remain open was the construction industry. And coming out of the crisis, demand for construction and related materials has remained elevated.
CRH (LSE: CRH) is one of Europe’s largest construction materials suppliers, with substantial economies of scale. As the world has started to rebuild after the pandemic, it has experienced rapid sales growth. Sales for the nine months to the end of September increased 11% year-on-year and, thanks to better economies of scale, the group’s profit margin increased by 0.5% for the period.
Management is looking to make the most of this windfall. The group has already spent $1.4bn on acquisitions this year and has more deals in the pipeline.
Despite CRH’s growth, I am wary about the group’s exposure to the construction sector. This is usually the first industry to feel the heat in an economic downturn. So as pandemic restrictions return across Europe, the firm’s growth could slow.
Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended InterContinental Hotels Group. 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.
This post was originally published on Motley Fool
