We finally made it to the second quarter after a March that seemed to last forever, and we pretty much started off the same way it ended, with more selling. The first quarter of 2020 ended with a loss on the S&P 500 of exactly 20%. In the history of the index since 1928, it was just the ninth quarter that has seen a drop of 20%, and it was the first since the fourth quarter of 2008, when the S&P fell 22.56%. Since World War II, it was just the fifth quarterly drop of 20% or more.
As distressing as the numbers are, which the team at BTIG sourced, they also say there is some good news The firm noted that after a 15% or higher drop in the S&P 500 since World War II, the index was higher seven out of the next eight quarters. Over the next two quarters, the S&P 500 was higher every single time, for an average gain of 12.66%.
While there is always the chance that “this time is different,” the data is persuasive, as well as somewhat reassuring for beaten-down investors. BTIG also featured a list of what they call “Sound Sleeper” stocks. These have mountains of cash and very little debt. We picked five that are solid buys for the future and pose little long-term risk.
Air Products
This company has seen some solid insider buying over the past couple of years. Air Products Inc. (NYSE: APD) provides atmospheric gases, process and specialty gases, electronics and performance materials, equipment, and services worldwide.
The company produces atmospheric gases (including oxygen, nitrogen, argon and rare gases) and process gases (such as hydrogen, helium, carbon dioxide, carbon monoxide, syngas and specialty gases). It makes equipment for the production or processing of gases, comprising air separation units and non-cryogenic generators, for customers in various industries, including metals, glass, chemical processing, electronics, energy production and refining, food processing, metallurgical, medical and general manufacturing. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction and liquid helium.
The Wall Street consensus price target for the stock is $246.86. The shares closed Wednesday’s trading session at $189.28, down over 5% on the day.
Alphabet
The search giant continues to expand and, while search remains king, the cloud presence is growing fast. Alphabet Inc. (NASDAQ: GOOGL) is a global technology company focused on key areas, such as search, advertising, operating systems and platforms, enterprise and hardware products. It generates revenue primarily by delivering online advertising and by selling apps and contents on Google Play, as well as hardware products. The company provides its products and services in more than 100 languages and in 190 countries, regions and territories.
Alphabet offers performance and brand advertising services. It operates through Google and Other Bets segments. The Google segment includes principal internet products, such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome and Google Play, as well as technical infrastructure and newer efforts, such as virtual reality.
Google has outlined expanding capabilities to facilitate commerce, capitalizing on the “treasure trove” of data provided by seven different properties, each with at least a billion active users (Android, Search, Chrome, Maps, Play, YouTube and Gmail).
Advertising remains a huge growth area as well, and the analysts expect the company to be a huge winner as product and service vendors look to reach the biggest possible audience.
The posted consensus price target is at $1540.18. Alphabet stock was last seen trading at $1,102.10 per share.
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