Stock market crash: I think these 2 FTSE 100 stocks could help you get rich from the recovery

The stock market crash offers investors the opportunity to buy these two FTSE 100 stocks at reduced prices, before they recover.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

After the stock market crash, plenty of FTSE 100 shares now trade at bargain prices. Investors are beginning to notice this too. If you buy top companies when their share prices are down, you can accelerate your plans to get rich and retire early.

You have just such an opportunity today. These two FTSE 100 shares have fallen far during the coronavirus crash, but are flying right now.

FTSE 100 recovery play

After a nervous Friday, investors have rediscovered their appetite for risk. The Standard Chartered (LSE: STAN) share price is up 6% this morning, as bargain seekers decide the potential rewards outweigh the risks.

Like all the banks, Standard Chartered has been hit hard by the stock market crash. Its focus on Asia and China made that inevitable. Unlike many FTSE 100 stocks, it failed to recover during April and May’s rebound. But it’s flying today.

Standard Chartered has also been caught up in rising tensions between China and the West, and concern over the Hong Kong clampdown. Its share price is still 45% lower than before the stock market crash, even after today’s rebound.

Standard Chartered is up today after US President Donald Trump surprised markets by failing to introduce new, more punitive trade measures in response to China’s new security law in Hong Kong. Shares rose across Asia amid relief that the trade war hasn’t further intensified.

Inevitably, the US-China stand-off remains a threat. Along with Covid-19, that explains why the bank trades at just six times earnings. Anybody who buys into the Standard Chartered share price must brace themselves for further political volatility, or even another stock market crash.

Also, there’s no dividend for now. However, the risk seems to be reflected in today’s price. It still looks a strong long-term buy-and-hold at today’s entry price.

Stock market crash opportunity

Standard Chartered is only the second fastest rising share price on the FTSE 100 today. Associated British Foods (LSE: ABF) is up more than 8%. The Primark owner has inevitably been hit hard by the lockdown but, as the government relaxes rules, it should benefit once people get outside and want to smarten up their wardrobes.

Investors have welcomed today’s news that management aims to open all Primark stores in England by 15 June, with openings in Northern Ireland, Wales and Scotland coming later this month.

It’s currently trading from 112 stores across Europe and the US, around a third of its total selling space. Today, it reported that overseas customers are queueing to get in and “once in store, spending on larger basket sizes.” 

Cash flow should improve markedly in the second half of this financial year, although management has yet to reinstate guidance. The share price is now bouncing back from the stock market crash.

The group is also renegotiating lease arrangements to cut overheads at Primark, which contributes around two thirds of the FTSE 100 group’s operating profit. The big opportunity here is that Associated British Foods shares still trade around a quarter lower than before Covid-19.

But one threat is that shoppers now reject fast fashion in favour of more sustainable options. Right now, I think the opportunity outweighs the threat.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods and Standard Chartered. 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.

More on Investing Articles

Investing Articles

After it crashed 25%, should I buy this former stock market darling in my Stocks and Shares ISA?

Harvey Jones has a big hole in his Stocks and Shares ISA that he is keen to fill. Should he…

Read more »

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

How’s the dividend forecast looking for Legal & General shares in 2025 and beyond?

As a shareholder, I like to keep track of the potential dividend returns I could make from my Legal &…

Read more »

artificial intelligence investing algorithms
Investing Articles

Could buying this stock with a $7bn market cap be like investing in Nvidia in 2010?

Where might the next Nvidia-type stock be lurking in today's market? Our writer takes a look at one candidate with…

Read more »

Investing Articles

Is GSK a bargain now the share price is near 1,333p?

Biopharma company GSK looks like a decent stock to consider for the long term, so is today's lower share price…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could December be a great month to buy UK shares?

Christopher Ruane sees some possible reasons to look for shares to buy in December -- but he'll be using the…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Sticking to FTSE shares, I’d still aim for a £1,000 monthly passive income like this!

By investing in blue-chip FTSE shares with proven business models, our writer hopes he can build sizeable passive income streams…

Read more »

Growth Shares

BT shares? I think there are much better UK stocks for the long term

Over the long term, many UK stocks have performed much better than BT. Here’s a look at two companies that…

Read more »

British Pennies on a Pound Note
Investing Articles

After a 540% rise, could this penny share keep going?

This penny share has seen mixed fortunes in recent years. Our writer looks ahead to some potentially exciting developments in…

Read more »