3 Stocks to Buy Ahead of the Next Market Crash

After years of consistent economic growth, and dramatic stock market increases, a growing number of investors, economists, and analysts are predicting a recession and downturn within the next couple of years. When we asked three Motley Fool contributors what defensive stocks they would consider buying before the next market crash…

Waste Management (NYSE:WM)Constellation Brands (NYSE:STZ), and Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B)were at the top of their lists.

One man’s trash…

Daniel Miller (Waste Management): If you’re looking for safer stocks to own in the event of a swift downturn or market crash, investors would be wise to find companies with a business model that will remain resilient. One perfect example is Waste Management, the leading provider of waste management environmental services in North America and owner of landfill facilities. Regardless of how the economy or stock market is doing, America will still need Waste Management’s services, and that means the company’s business will remain healthy over the long term.

Investors should first consider Waste Management’s long-term competitive advantages. We often overlook, or are just unaware, that there are significant barriers of entry to Waste Management’s business. Operating a landfill, for instance, requires facility permits, a number of licenses, and federal and local government approvals for zoning and other environmental concerns. Add to those hurdles the fact that many populations don’t want a new landfill in their backyard and that Waste Management has a cost-efficient and dense route structure, and it’s easier to understand that Waste Management has a nice niche carved out in the waste services industry with new competitors less likely to pop up.

Waste Management should be well positioned as the nation’s population increases and we produce more trash, but management is also willing to pull the trigger on acquisitions that fold nicely into the company’s business model. Just this week, it announced it would acquire all outstanding shares of Advanced Disposal Services for $33.15 per share in cash. Waste Management believes it can generate more than $100 million in annual cost savings and capital expenditure synergies, and the acquisition will be immediately accretive to its adjusted earnings per share and cash flow.

Regardless of what happens with the market, we’re almost guaranteed to need Waste Management’s services, and that makes it a stock to own before any potential market crash or downturn…

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