Bed Bath & Beyond Inc. (BBBY), SanDisk Corporation (SNDK): Three Companies That Will Perform Well No Matter What

Page 1 of 2

Economic uncertainty has caused many businesses to remain uncommitted to future plans. Instead of investing heavily in growth or scaling down operations in preparation for disaster, a lot of companies are hoarding cash while they wait to see what happens next.

Bed Bath & Beyond Inc. (NASDAQ:BBBY)It is unclear whether the economy will make a significant improvement or plunge into recession once again — and even less clear when the move will happen — but, eventually, something other than the current state of uncertainty will exist.

Therefore, it would be wise for investors to scout out companies that are in a position to grow quickly if the economy turns up, but offer downside protection in case the United States sinks into another recession.

Three companies positioned for all economic conditions

Founded in 1971, Bed Bath & Beyond Inc. (NASDAQ:BBBY) has grown into America’s leading home-furnishings retailer. The company’s recession-resistant products (such as linens and small appliances) and international growth opportunities make it a good company to own in good times and bad.

  • Defense: Bed Bath & Beyond Inc. (NASDAQ:BBBY) has $922 million in cash on its balance sheet ($4.23 per share) and no debt. In addition, many of its product categories are viewed as non-discretionary by its customers. As a result, the company will likely remain profitable during the next recession.
  • Growth: The company has an enormous opportunity to expand internationally; there are currently only 34 locations in Canada and three in Mexico. Canada’s relatively robust economy presents the biggest opportunity for growth — the company plans to operate 150 to 200 stores in the country. At its maximum, the Canadian stores could eventually account for 20% of Bed Bath & Beyond Inc. (NASDAQ:BBBY) revenue even though it currently accounts for less than 5%. Mexico represents a much smaller growth opportunity; the company plans to open just two additional stores in Mexico this year to gauge consumer preferences in the country.

SanDisk Corporation (NASDAQ:SNDK) is a leader in the design and manufacture of flash memory storage. Although not as predictable as Bed Bath & Beyond Inc. (NASDAQ:BBBY), the company offers investors a high degree of protection via its cash position and has growth opportunities in new markets.

  • Defense: SanDisk Corporation (NASDAQ:SNDK) maintains over $2.5 billion in cash on its balance sheet, compared to just $800 million in long term debt. This nets out to $1.7 billion in net cash — about 12% of its market capitalization. Although the company’s operations are not immune to economic downturns, catastrophic failure is unlikely due to the company’s small debt load relative to present earnings and cash on hand.
  • Growth: SanDisk Corporation (NASDAQ:SNDK) has significant growth opportunities as one of the leading companies in NAND flash memory technology. The solid-state drives (SSDs) that utilize the technology are quickly replacing traditional hard drives in PCs, tablets, and similar devices. According to a report published by IHS, the SSD market will top $20 billion by 2016, almost triple the size of the market in 2012. If SSDs grow at anything close to the rate projected by IHS, SanDisk Corporation (NASDAQ:SNDK) will have a massive tailwind for at least two-and-a-half years.
Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!