Sector-specific balance sheet themes amid COVID-19 disruption


We believe that companies with strong balance sheets will be the most resilient during the current bout of economic uncertainty.

Here are themes we identified in the Construction, Consumer, Healthcare and Support Services sectors:

• Construction: Our picks in this sector have positive free cash flow year after year and are less exposed to discretionary consumer spend.
• Consumer Staples: We identified companies that produce a staple product for resilient customers, like supermarket chains, and whose shares have de-rated.
• Travel: We focus on the asset light business model with a strong balance sheet and flexible cost base.
• Tobacco: Generally recession resistant.
• Healthcare: Away from the pre-revenue biotechs, healthcare can offer strategic resilience with certain companies well underpinned by cash/resources and/or secure revenue streams.
• Support Services: The sector tends to be asset light and people-based, with limited working capital and capex.

If you’d like to see the report, please contact Bill Dale, below.