Questor: let’s forget coronavirus gloom for a moment and look for some shares to buy

Questor share tip: among our previous picks are some excellent businesses whose share prices have suffered along with the rest

Richard Evans 25 March 2020 • 6:00am

Recent columns have had of necessity a gloomy feel. Last week we were forced to take the drastic step of scanning our selections for any whose survival had been put in doubt by the coronavirus crisis.

But we must remember this won’t last forever and businesses and the stock market, as well as our own long-term savings plans, still have a future.

So today we switch from thinking about what has to be sold to looking for purchases. In particular we will look back at stocks recommended in the past whose share prices we feel have been unduly punished and that, if bought today, might recover enough to counteract some of the damage done to other parts of our portfolios.

It’s striking how well certain stocks built around strong, long-established brands have held up. The firms endure through good times and bad because their products have an appeal that spans generations.

Questor has three in mind: Diageo, Rémy Cointreau and Manchester United. It’s hard to imagine these companies not continuing to enjoy loyal support from their legions of customers all over the world in 20 or more years’ time. Their share prices have fallen by 7pc, 23.4pc and 34.6pc respectively since our tips. Buy.

Two other French stocks make it into our list. Dassault Systèmes makes extraordinary software that helps businesses in a wide variety of industries design and prototype their products. Customers tend to be loyal because switching to other systems would be fraught with problems, and the company has a strong long-term culture from the founding family. The shares have lost 1.9pc since our tip. Buy.

Française des Jeux runs the French national lottery and remains part owned by the state. The shares are 4.7pc lower than when we tipped them but this strikes us as a highly defensive business. Buy.

You might not expect to see Next feature here but we have often written about its well thought-out long-term plan to become steadily more online-focused while maintaining its high street presence at a level that is both profitable and able to support its digital operations.

People will buy clothes one way or another during and after the crisis. The shares have lost 23.2pc since our first tip and much more relative to recent highs. Buy.

There’s anecdotal evidence that people are rushing to buy puppies as a reason to go out during the lockdown and much more solid long-term proof that pet owners would rather go without themselves than cut spending on their animals. Pets at Home is of course a retailer but the share price fall of 20.1pc since our tip last month looks overdone. Buy.

Hargreaves Lansdown has suffered heavily because its income is broadly a percentage of the value of its clients’ stock market holdings, which has of course fallen heavily. But the firm facilitates long-term savings for more than a million people and that need will not go away. In time, we believe, markets will rise and with them Hargreaves’ income. The firm has great technology and service, innovates constantly and is conservatively run. The shares are 4.2pc down. Buy.

Bioventix is another business based on proprietary technology, in this case for antibodies used when blood samples are tested for various diseases. Once its products are approved they enjoy an effective monopoly. This has not stopped the shares from falling by 10.3pc since we made them our “Aim tip of the year” in January. Buy.

RWS has long been a Questor favourite: its expertise in translating patents would be almost impossible to replicate. It has a long record of making successful acquisitions. Such quality is reflected in the shares’ performance: they are 54.2pc higher than when we tipped them. However, the price is 30.7pc below a recent peak and we say buy.

Craneware produces software that helps hospitals run their operations more efficiently, something that every health service is striving for at present. The shares are 6.8pc ahead of where we tipped them but 58.7pc below their peak in June last year. Buy.