- HLMA.L
- ^FTSE
The stock market has rewarded investors handsomely over the last few years, with both the FTSE 100 and S&P 500 delivering returns significantly above their long-term historical averages.
But beneath all this growth there are brewing geopolitical tensions, trade disputes and renewed inflation. And understandably, some investors are starting to get nervous.
Throw in concerns about an AI bubble, and it’s no surprise that predictions for another market meltdown are getting louder.
The good news is, a stock market crash is far from guaranteed. But let’s assume the worst and say stocks are on track for a painful drop. Which businesses could withstand the onslaught?
Well, looking at previous crashes, one FTSE 100 company that could be a strong defensive contender is Halma (LSE:HLMA).
Built for difficult times?
As a quick introduction, Halma owns a portfolio of specialist businesses developing safety, environmental and healthcare technologies. Think fire detection systems, water-quality monitoring systems and crucial medical equipment.
This particular products niche has proven remarkably advantageous over the years. Why? Because regardless of whether the economy’s throwing a tantrum, demand for Halma’s safety solutions remains remarkably robust, especially given that in many cases, spending is mandatory due to customers’ regulatory compliance needs.
As a result, when looking at Halma’s performance during previous stock market wobbles, it’s proven to be quite resilient. It held up far better than its parent index during the 2008 <a href="https://bitcomme.com/5-best-tech-stocks-for-the-next-5-years-according-to-financial-media/” title=”5 Best Tech Stocks for the Next 5 Years According to Financial Media”>financial crisis. And the same thing happened during the more recent 2020 pandemic-related crash, with the stock falling by roughly 25% compared to a 33% crash in the FTSE 100. And that was before delivering a rapid V-shaped recovery.
Was it immune to volatility? Absolutely not. But it nonetheless was a market beater and one that’s since continued to climb to new record highs.
Still building momentum
Of course, past performance doesn’t guarantee future returns. So how does Halma look as a business today? In my opinion, pretty great. September’s trading update confirmed management still expects low-double-digit organic revenue growth at constant exchange rates for its 2027 fiscal year (ending in March).
Order intake also remains ahead of both revenue and the equivalent prior-year period. And better still, management raised its underlying operating margin guidance range to 23.5%-24% versus the 22.7% previously expected, courtesy of a more favourable product mix as well as operational improvements.
