DAUNTLESS: Stocks With Staying Power

Our cast of survivors are well positioned to stay afloat in troubled times.

- NELLIE S. HUANG

NOTHING FEEDS FEAR IN the stock market like uncertainty, and nothing spreads fear and uncertainty like a global pandemic. As coronavirus worries infected the financial markets, stocks tumbled at a record pace. Standard & Poor’s 500stock index dropped 34% from its all-time high in about a month. During the Great Recession, it took nearly a year for the index to decline by that amount. A near-total economic shutdown in the country’s biggest cities compounded the damage. “These are unprecedented times,” says Philip Lawlor, managing director, global markets research at FTSE Russell.

But smart investors are greedy when others are fearful, and this time is no different. Fidelity Puritan fund manager Dan Kelley and other fund managers have been busy buying during the sell-off. “Opportunities like these come along once a decade if you’re lucky,” says Kelley, who says he’s finding some of the best investment opportunities he has seen in a long time.

Just because a stock is cheap doesn’t mean it’s a bargain. Stocks in high-quality firms—financially strong, well-established firms with lots of cash and little debt—are better equipped to withstand troubled times and rough markets. Some even emerge from a crisis stronger.

With that in mind, we set out to find stocks with staying power, focusing on firms that lead their industry and have a competitive advantage over peers, a steady history of profitability and good long-term growth prospects. We list our six favorites below.