Here’s how I’m looking for cheap shares in the stock market crash

first_img With the stock market having fallen by nearly 20% this year, there’s an abundance of cheap shares for investors to buy. But not all of these businesses may be attractive investments in the long run.As such, investors have to be careful looking for cheap shares in the current market.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Finding cheap sharesAlthough there appear to be numerous opportunities to benefit from the recent stock market crash, investors need to be careful. Buying shares just because they look cheap can be an easy way to lose money. Sometimes, stocks are cheap because they deserve to be.With that being the case, I’ve adopted a cautious approach to picking cheap shares.It’s impossible to tell what’s in store for the stock market and economy in the short run. However, over the long term, history suggests an economic recession is unlikely to last forever.What’s more, the economy has successfully moved from recession to an extended period of positive economic growth following every previous downturn.Shares to avoid Unfortunately, not every business will survive long enough to see the economic recovery. Companies with a lot of debt usually struggle the most in periods of economic uncertainty. So, it seems sensible to stay away from any companies with high levels of borrowing — even if their cheap shares look too good to pass up. Businesses that produce commodities also seem at risk. Oil corporations are particularly vulnerable as they tend to have high fixed costs. Of course, not every company with a lot of debt will fail. And some commodity businesses may be able to survive the economic uncertainty.But determining which of these cheap shares will succeed and which will fail, is quite tricky. On the other hand, defensive areas of the market appear to offer buying opportunities for long-term investors.I’m looking at these parts of the market for cheap shares. Market leaders in specific industries will likely have the means to navigate the economic challenges ahead.Companies that supply vital products for consumers and sectors, such as healthcare, should also be able to weather the storm. These organisations will face challenges over the next few weeks and months. However, their market positions should allow them to come out on top.At the same time, FTSE 100 shares with wide economic moats have higher chances of survival. They may even be able to extend their market share to strengthen their long-run potential if smaller peers collapse.Utility companies also appear to offer value after recent declines. They look like cheap shares after recent declines. In many cases, the shares are trading at levels not been since the last global recession. That means many stocks now look to offer excellent value for money.Attractive investmentSome companies might not survive the next 12 months, but others could come out stronger on the other side. While they may suffer further turbulence in the short term, these cheap shares could provide an attractive investment in the long run. Image source: Getty Images. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Our 6 ‘Best Buys Now’ Shares Here’s how I’m looking for cheap shares in the stock market crash “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.center_img Rupert Hargreaves | Sunday, 19th April, 2020 Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Simply click below to discover how you can take advantage of this. Enter Your Email Address Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. See all posts by Rupert Hargreaveslast_img


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