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Three covid-19 resistant small caps to put in your portfolio

Find out what stocks have a chance of performing better despite adverse market conditions.
Richard Hemming | Under The Radar Report
03 April 2020 09:40 AM
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In times like these, you wonder if there are any stocks that can outperform in a market crisis. Here are three small caps that could potentially shine during this bear market.
 

The ship builder Austal (ASB) is a key source of diversification in the Under the Radar’s small cap portfolio since around 90% of revenue is contracted from US and Australian governments.  We think companies will be able to rely on previously contracted revenue from government customers.  Governments will be reluctant to allow their defence capabilities to diminish because of the impact of this virus.

There are big risks, but it helps if your operations are essential. Last month Austal announced that its US operations, employing 4000 people, are to remain operational, having been designated mission critical.

Then there is Freedom Foods (FNP). It’s not hard to see why consumers are looking for its combination of dairy and plant based food products, which include milk, nutritional powders, cereals, muesli bars and nuts. People need nutritious foods more than ever.

Stocks to watch Stock ideas Small caps COVID19 Stock ideas Richard Hemming
About the Author
Richard Hemming , Under The Radar Report

Richard is an experienced finance analyst, stock broker and financial journalist, having worked for over 25 years in the finance sector. He has worked as an analyst and stockbroker in Sydney and in London and for the Australian Financial Review, Investors Chronicle and the Financial Times. He had always wanted to start a research newsletter focussed purely on Small Caps because they were simply not covered with any regularity by stockbrokers because they were too small. Small Caps require diligent research and follow up.  The lack of quality research on Small Caps was why Richard started Under the Radar Report with Caroline Mark.