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