Warren Buffett was pretty much silent the first half of 2020. There was a lot happening with build up for a recession, a pandemic, and then a market crash. Yet there was Buffett, mouth firmly closed.
That is, until the summer. Then there was a flurry of activity with the investment mogul buying, selling and seemingly hoarding cash. Even today, Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) has an unprecedented $147 billion as of writing. So what’s he waiting for?
The short answer is that Buffett is waiting for an opportunity. Unfortunately, that wait could be a while. The long answer here is even though the stock market seems to be doing well, multiple crashes are still very likely. Warren Buffett knows this, so it’s likely the investor is going to finds stocks that will bring him through the pandemic, and to the other side of a recession.
What kind of stocks? I’m glad you asked.
Telecommunications Warren Buffett seems to be moving away from cable, but buying more from telecommunications companies that are ahead with internet. Companies that have a lead from the pack will continue to do well even during a lockdown. These companies will take advantage of the need for remote working, and possibly see an increase in revenue rather than decrease.
A perfect example for the TSX is Telus Corp. (TSX:T)(NYSE:TU). The company’s wireline business puts it far ahead from the rest of the telecommunication businesses in Canada. Telus is likely to have its customers on 5G much sooner, with all the investment behind it. Revenue has been coming in steadily, most recently seeing an increase of 4.21% year over year, and shares have been the same moving 5.27% in the last year.
Health care It’s no secret that vaccines for COVID-19 will be a game changer for the world once everyone is vaccinated. Warren Buffett saw this, recently investing in Pfizer (NYSE:PFE) as it seems to be leading the way amongst the COVID-19 vaccines. However, vaccines aren’t the only way Buffett is investing, finding companies that should stand to make gains during and after the pandemic.
Telehealth companies like CloudMD Software & Services Ltd. (TSXV:DOC) will continue to make headway with giving people a safe and convenient option for health care. That care ranges from mental health to a plain doctor visit. So these kinds of services are likely to continue seeing gains. CloudMD alone has seen record breaking revenue this year, with returns of 758% as of writing!
Grocery Finally, the one area that is going to be open no matter what is grocery stores. People need food, but there are some grocery stores allowing customers to use curbside delivery. Not everyone is doing it, so these stores stand a chance to see more revenue come their way.
Loblaw Co. (TSX:L) is a great choice as it has a number of stores under its umbrella, all offering curbside delivery. Whether it’s Loblaw or No Frills or its other locations, you can pick up for a small fee and see lower risk. This is a great option instead of the hefty price tag of delivery services. Revenue increased 7% year over year during the last earnings report, with shares at a discount as of writing.
Bottom line Warren Buffett is preparing for more crashes, and you should too. But there are still stocks that you can stick with no matter what happens in the future. Taking his guidance, these three stocks would be solid options for investors on the TSX.
The post Warren Buffett: 3 Lockdown Stocks to Get You Through a Crash appeared first on The Motley Fool Canada.
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares). The Motley Fool recommends TELUS CORPORATION and recommends the following options: short January 2021 $200 puts on Berkshire Hathaway (B shares) and long January 2021 $200 calls on Berkshire Hathaway (B shares).
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2020
This Article Was First Published on The Motley Fool
