Believe it or not, this isn’t the first time the stock market has crashed. Sure, the coronavirus from China is a unique foe that the stock market has yet to face. But, so was the housing crisis back in 2008. So was the Dot Com Bubble back in 2000. So was the Flash Crash of 1987.
The stock market beat all of those crises. It will beat the coronavirus crisis, too. So, instead of running away from the markets during this time, history actually says that now is the time to look for stocks to buy.
And what better place to find strong stocks to buy than in the group of stocks that survived the 1987, 2000 and 2008 crashes?
These are what I call “survivor stocks.” They’ve been around the block around a few times. Stock market crashes. Economic recessions. They’ve seen it all. And, through it all, these stocks have not just survived, but actually thrived, rallying to all-time highs after each and every bear market since 1987.
With that in mind, some of the best stocks to buy that should survive the coronavirus crisis include:
- Nike (NYSE:NKE)
- Apple (NASDAQ:AAPL)
- Starbucks (NASDAQ:SBUX)
- Microsoft (NASDAQ:MSFT)
- Disney (NYSE:DIS)
- McDonald’s (NYSE:MCD)
- Walmart (NYSE:WMT)
Stocks to Buy to Survive the Coronavirus Crisis: Nike (NKE)
Over the past 35 years, global athletic apparel maker Nike has seen a crisis or two — and each time, NKE stock overcame the crisis, and proceeded to rally to all-time highs as soon as the crisis cleared up.
During the Flash Crash of 1987, NKE stock dropped 35% in a few months. By early 1988, the stock had rallied back to new all-time highs. Fast forward a few years. During the 1990 Recession, the stock dropped 45%. By early 1991, it was back at all-time highs.
Then, in the late 1990’s around the Dot Com Bubble, Nike dropped 60% in 1997/98. Shares were choppy for a few years, but then hit new all-time highs in early 2004. The Financial Crisis of 2008, meanwhile, took NKE stock down by about 45%. By early 2010, shares were back at all-time highs.
Time and time again, Nike has trumped crisis after crisis, and come out the other side a better company than before.
The coronavirus crisis will prove no different. NKE stock has dropped 30% in the wake of this new pandemic. But, this is still the world’s No. 1 athletic apparel brand, with huge demand across the globe. That demand is temporarily depressed. Nike has the liquidity to weather this temporary depression. Once the virus passes, demand will come roaring back. So will Nike.
Much like Nike, technology giant Apple has weathered every financial and economic storm since 1985.
During the Flash Crash of 1987, AAPL stock dropped more than 50%. It was back at all-time highs by early 1991. When the Dot Com Bubble burst in 2000, AAPL stock tanked 80%. It recovered all those losses, and hit new all-time highs by late 2004. During 2008/09, the stock plummeted 60%. By late 2009, the stock was making new highs.
In other words, AAPL stock has taken its fair share of beatings over the past 35 years. But none of them knocked the stock out. Instead, each time, Apple punched back, and ultimately won the fight.
This crisis will produce a similar outcome. With over $100 billion in cash, Apple is equipped with enough resources to weather the current storm, even if it drags on for several quarters. Even further, the company has huge catalysts on the horizon (including a 5G iPhone launch towards the end of the year), and its production facilities in China are coming back online.
By the end of 2020, it’s likely that AAPL stock runs back to all-time highs.
In becoming the world’s No. 1 retail coffee chain over the past 20 years, Starbucks has seen its fair share of economic downturns. None of them inflicted permanent damage on the company or the stock.
During 2001, amid a broader economic slowdown coming out of the Dot Com Bubble bursting, SBUX stock lost about half of its value. By early 2002, the stock had doubled from its lows, and was making new highs. During 2007/08, SBUX stock fell even harder, losing about 80% of its value. By early 2011, though, shares were yet again making new highs.
Today, the stock is down about 30% — matching its biggest drop since the Financial Crisis.
Much like it has with the previous crises, Starbucks will weather the coronavirus pandemic. Indeed, thanks to its exposure to China, Starbucks already has a playbook for how to navigate through this crisis. That playbook will help the company weather the coronavirus storm in Europe, Latin America and the U.S.
And, when the virus passes within the next few months, pent-up consumer demand will turn into robust sales growth at the coffee chain, which will translate into big share price gains.
Technology giant Microsoft has survived through four major economic and market downturns over the past 35 years, and appears well-equipped to similarly survive through this downturn.
First, in the back half of 1987, MSFT stock shed 50% of its value in a few months. By early 1990, the stock was back at all-time highs.
Second, during the 1990 Recession, the stock dropped 35%. It was back at all-time highs by early 1991.
Third, when the Dot Com Bubble burst in 2000, shares dropped 65%. It took forever for shares to climb back to those lofty levels … but they did, by 2016.
Fourth, during 2008/09, MSFT stock dropped 60%. Shares reclaimed their 2008 highs by late 2013.
With $134 billion in cash on the balance sheet and robust demand tailwinds in its cloud computing business, Microsoft appears well-equipped to both weather this current economic downturn, and come out the other side with a ton of firepower. Ultimately, that means MSFT stock will reclaim its 2020 highs at some point in the foreseeable future.
Global media giant Disney isn’t new to the whole recession thing. The company has seen several of them since 1985. Obviously, none of them killed the company, because Disney today is as big, powerful and important as the company has ever been.
In 1987, DIS stock dropped 42%, before rebounding to all-time highs by mid-1989 Similarly, in 1990, DIS stock shed 35%, before rebounding to all-time highs by early 1992.
The 2000 crash was worse for Disney — shares dropped 70% — and the stock didn’t reclaim its highs until 2011. But, during the 2008/09 market meltdown, DIS stock plunged 55% and recovered all of those losses by mid-2010.
Today, DIS stock is down 40% from its recent highs, putting this correction broadly in-line with previous bear market downturns in the stock. Much like it did during all previous downturns, Disney will leverage its iconic brand name, strong balance sheet and diverse businesses to weather the coronavirus crisis.
Of all the survivor stocks to buy, perhaps the most historically resilient is McDonald’s.
In the market downturns of 1987, 1990 and 2000, MCD stock was hit hard, with drops varying from 30% to 75%. Yet, each time, the stock rebounded to fresh all-time highs within four years. Meanwhile, during the 2008 Financial Crisis, MCD stock was hardly impacted, mostly because, by that time, McDonald’s was the world’s largest fast food chain and consumers still needed to eat, even though the economy was crashing.
That same logic applies today. Since 2008, McDonald’s has only widened its lead in the fast food segment. Sure, the economy today is shut down (it wasn’t shutdown in 2008). But, consumers still have to eat, and not everyone can buy groceries. So, McDonald’s drive-thru should be a popular option for millions of Americans and Europeans over the next several weeks.
This sustained demand will help MCD stock weather this coronavirus storm. Once the economy normalizes, McDonald’s demand trends will normalize, too, and the stock will fly back to new highs.
Last, but not least, on this list of strong survivor stocks to buy is Walmart.
The general merchandise retail giant is very familiar with recessions and market downturns. The company is also very good at weathering these downturns. In both 1987 and 1990, WMT stock fell off a cliff. But, within a year of each major selloff, the stock was back at all-time highs.
Meanwhile, during the 2008 Financial Crisis, Walmart actually fared pretty well, as consumers flocked to discount retailers as their budgets tightened up.
It seems Walmart will fare pretty well during this economic downturn, too. Yes, parts of the economy are entirely shut down. But Walmart stores are entirely open. And they are entirely busy, as consumers are panic buying everything from water to toilet paper.
So long as the virus keeps spreading, this panic buying will continue. So long as the panic buying continues, Walmart will be able to weather the coronavirus storm.
Luke Lango is a Markets Analyst for InvestorPlace. He has been professionally analyzing stocks for several years, previously working at various hedge funds and currently running his own investment fund in San Diego. A Caltech graduate, Luke has consistently been rated one of the world’s top stock pickers by various other analysts and platforms, and has developed a reputation for leveraging his technology background to identify growth stocks that deliver outstanding returns. Luke is also the founder of Fantastic, a social discovery company backed by an LA-based internet venture firm. As of this writing, he was long MSFT and SBUX.