It looks as if the risks of a stock market crash are growing. The economic recovery’s stalling, and rising commodity prices are leading to inflation across the world. This could hit consumers in the pocket, reducing their spending powers and further hurting the economic recovery.
At the same time, central banks are considering raising interest rates. This would make it more expensive for companies to borrow and reduce the demand for lending. If it becomes more costly to borrow money, businesses may put growth plans on ice.
While it’s impossible to predict what the future holds for equity markets, with risks growing, I’ve started to prepare for a stock market crash.
If the market does take a turn for the worst, I want to take advantage of this. There are a couple of companies on my list of shares to buy that I hope to be able to pick up at a discount.
Stock market crash bargains
The first company on my list is the retail giant Next. This FTSE 100 company has outperformed all expectations over the past two years. Thanks to heavy investments in its online operation and technology, sales and profits have jumped.
During the first half of 2021, total Next brand full-price sales increased by 8.8% over 2019’s figure.
Unfortunately for me, I’m late to the party with Next. Shares in the FTSE 100 company are trading at a relatively high valuation. That’s why I want to take advantage of a stock market crash to snap up some of the retailer’s shares.
However, it won’t be immune to some of the challenges outlined above, such as rising costs and a slowdown in economic activity, but it’s well-prepared to weather the storm.
Global growth
Other companies on my list of stocks to buy include Prudential and Bunzl. I think both of these international businesses are primed for growth, no matter what the future holds for the global economy in the near term.
As economies in Asia expand, demand for financial services is likely to increase. That will benefit Prudential.
Bunzl’s size is its most considerable advantage. The distribution group has substantial economies of scale, which aren’t available to its peers. This advantage has helped the organisation snap up smaller competitors in the past. As long as management doesn’t deviate from this plan, I think the company will continue to grow.
That’s not to say either group won’t have to fight off fierce competition in both the distribution and financial services markets. This is the most considerable risk both companies face.
Despite this challenge, I’d buy both of these global growth stocks for my portfolio in a stock market crash. I think they have enormous potential, no matter what happens to equity markets in the near term.
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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Next. The Motley Fool UK has recommended Bunzl and Prudential. 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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