There are plenty of companies in the FTSE 100 I would like to buy for my portfolio in the event of a stock market crash. However, if I had to buy just one stock, it is clear to me which business would deserve the place in my portfolio.
Financial data company Experian (LSE: EXPN) has some of the most deeply entrenched competitive advantages in the blue-chip index. The organisation provides credit rating and financial data services for consumers and businesses worldwide. I believe this business has so much potential, I would be willing to invest £10k in the stock.
FTSE 100 champion
This is a pretty unique and exceptional business. The company has been building its data resources over the past few decades. Today, it has unrivalled access to consumer credit data and enterprises that supply this data worldwide. It has also spent hundreds of millions of pounds developing its own cybersecurity security protocols. This ensures the customers and suppliers of data that it is secure.
A business cannot develop these sorts of competitive advantages overnight. As I noted above, it has taken the company decades to build its current data trove. The business has also spent years developing the security and infrastructure required to maintain and solidify its competitive advantage.
That said, this is not the only credit rating agency in the world. Experian does have competitors. These businesses are trying to compete for market share and have similar competitive advantages. This is probably the biggest challenge the corporation has to deal with right now.
Fighting off the competition will be a significant challenge for the group over the next couple of years. Despite its advantages, the company cannot take its position in the market for granted.
Still, I think the business has tremendous potential over the next couple of years. Following the pandemic, the demand for consumer credit products has exploded. This is generating a windfall for the group. According to its latest trading update, total revenue growth hit 14% in the three months to the end of December.
Stock market crash opportunity
I think it is unlikely this growth will grind to a halt in the event of a stock market crash. As such, I will be buying the shares hand over fist if the FTSE 100 falls substantially in the weeks and months ahead.
The stock has already fallen in value by around 20% from its all-time high printed at the end of December. If it falls further, I think the shares will only become more attractive.
Indeed, the company will not lose its competitive advantages because the stock market falls 20% or more. These advantages will remain in place for the next few decades, no matter what happens in the equity markets.
That is why I would look to take advantage of a stock market crash sell-off and acquire a significant position and this FTSE 100 company at a discounted price.
Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Experian. 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.
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