5 Best Investments During A Recession

In this article, we discuss 5 best investments during a recession. If you want to read our discussion on the stock market and recessionary concerns, head over to 10 Best Investments During A Recession.

 5. The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 68

The Home Depot, Inc. (NYSE:HD) is a retailer focused on home improvement. It offers a range of construction materials, home improvement products, items for landscaping and gardening, and decorative products. On August 17, The Home Depot, Inc. (NYSE:HD) declared a quarterly dividend of $2.09 per share, in line with the previous quarter. The dividend was distributed on September 14. During recessionary periods, people are driven towards DIY projects, essential repairs and maintenance of their properties, and smaller yet affordable home upgrades. This makes Home Depot, Inc. (NYSE:HD) one of the most sought-after recession stocks.

According to Insider Monkey’s second quarter database, 68 hedge funds were bullish on The Home Depot, Inc. (NYSE:HD), compared to 65 in the previous quarter. Israel Englander’s Millennium Management is a prominent position holder in the company. 

Madison Sustainable Equity Fund made the following comment about The Home Depot, Inc. (NYSE:HD) in its second quarter 2023 investor letter:

“The Home Depot, Inc. (NYSE:HD) celebrates 30 years of giving back. Team Depot was created in 1993 as a way of organizing associates who were eager to volunteer in their communities. For 30 years, Team Depot associates have worked side by side with non-profits around the United States. Focus areas include spending time with the elderly and activities with at-risk youth. Team Depot also improves the homes and lives of veterans and helps communities impacted by natural disasters.

During the quarter, Home Depot set a goal for battery-powered products to represent over 85% of outdoor lawn equipment sales in the U.S. and Canada by the end of fiscal 2028. Push lawn mowers and handheld leaf blowers and trimmers will run on rechargeable battery technology instead of gas. This will reduce 2 million metric tons of greenhouse gas emissions annually.”

4. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 74

The Procter & Gamble Company (NYSE:PG) offers branded consumer packaged goods on a global scale. Its operations are divided into five segments – Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. On July 28, The Procter & Gamble Company (NYSE:PG) reported its fourth quarter results for fiscal year 2023. The company announced a non-GAAP EPS of $1.37, beating Wall Street estimates by $0.05. The revenue of $20.6 billion increased 5.5% year-over-year, surpassing market forecasts by $610 million. During a recession, consumers often cut back on dining out or entertainment spending. This can lead to an increase in at-home consumption, benefiting consumer packaged goods companies like The Procter & Gamble Company (NYSE:PG). 

According to Insider Monkey’s second quarter database, 74 hedge funds were bullish on The Procter & Gamble Company (NYSE:PG), one down from the last quarter. Terry Smith’s Fundsmith LLP is the leading position holder in the company. 

3. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 81

Walmart Inc. (NYSE:WMT) is a giant in global retail, wholesale, and related operations. It operates supercenters, hypermarkets, discount stores, cash and carry outlets, and warehouse clubs that operate under the Walmart and Walmart Neighborhood Market brands. On August 17, Walmart Inc. (NYSE:WMT) reported a Q2 non-GAAP EPS of $1.84, outperforming Wall Street estimates by $0.13. The revenue of $161.63 billion also went up by 5.9% year-on-year, surpassing market estimates by $2.35 billion. Walmart Inc. (NYSE:WMT)’s reputation for offering affordable prices makes it an attractive shopping destination for consumers looking to save money during tough economic times. This makes it one of the best recession stocks to monitor. 

According to Insider Monkey’s second quarter database, 81 hedge funds were bullish on Walmart Inc. (NYSE:WMT), as compared to 91 in the prior quarter. D E Shaw is the largest stakeholder of the company, with a position worth nearly $862 million. 

2. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 88

Johnson & Johnson (NYSE:JNJ) engages in the global research, development, manufacturing, and sale of diverse and innovative products within the healthcare sector. It is one of the best recession stocks to invest in. On July 20, Johnson & Johnson (NYSE:JNJ) reported a Q2 non-GAAP EPS of $2.80, beating Wall Street estimates by $0.18. The revenue of $25.53 billion increased 6.4% year-over-year, surpassing market expectations by $860 million.

As per Insider Monkey’s second quarter database, 88 hedge funds were bullish on Johnson & Johnson (NYSE:JNJ), as compared to 86 in the prior quarter. Ray Dalio’s Bridgewater Associates is a prominent position holder in the company, with 3.18 million shares worth $526.5 million. 

ClearBridge Large Cap Value Strategy made the following comment about Johnson & Johnson (NYSE:JNJ) in its first quarter 2023 investor letter:

“The tech-dominated quarter was a headwind for both defensive and cyclical sectors, with shares of health care holdings such as UnitedHealth Group (UNH), Elevance (ELV) and Johnson & Johnson (NYSE:JNJ) declining after a strong 2022.”

1. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 111

UnitedHealth Group Incorporated (NYSE:UNH) functions as a diversified healthcare enterprise within the United States. Its operations are divided into four segments – UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. Each segment caters to different consumer healthcare needs like health benefit plans, care delivery and management, healthcare software and information products, and pharmacy care services. On August 23, UnitedHealth Group Incorporated (NYSE:UNH) declared a quarterly dividend of $1.88 per share, in line with previous. The dividend will be distributed on September 19, to shareholders of record on September 11.

As per Insider Monkey’s second quarter database, 111 hedge funds were bullish on UnitedHealth Group Incorporated (NYSE:UNH), as compared to 116 in the last quarter. Rajiv Jain’s GQG Partners is the top shareholder of the firm with around 4.89 million shares valued at approximately $2.35 billion. 

Mairs & Power Growth Fund made the following comment about UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2023 investor letter:

“Notable detractors to performance in the first half were US Bank (USB), Charles Schwab (SCHW), and UnitedHealth Group Incorporated (NYSE:UNH), which were down 22.09%, 31.65%, and 8.65%, respectively. Another detractor from relative performance was UnitedHealth Group, which was down 8.65%. However, we have a positive long-term view of the company, headquartered in Minnesota, and especially its potential when it comes to harnessing its vast amounts of patient data via AI. Additionally, its Optum unit, which provides technology and data-driven care delivery, has AI-enabled tools that can help healthcare providers drive more efficient and accurate care to patients.”

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