In the event of a stock market crash, share prices of market-leading companies decline. This offers investors an opportunity to acquire shares at a discount.
In such a scenario, I think these 3 ASX shares are worth considering.
Woolworths Group Ltd (ASX: WOW)
This Australian supermarket giant's share price has taken a tumble in the last couple of weeks and offers more value than this time last month. According to Roy Morgan research, Woolworths commanded a grocery market share of 34% in 2018. This was up 1.4% compared to 32.6% in 2017.
In Woolies' half-year results released to the market in late February, sales from continuing operations was up 6%, net profit after tax (NPAT) increased by 15.7% and the company boosted its interim dividend by 2.2% to 46 cents.
The successful marketing campaign of Lion King ooshies proved to be a hit among consumers and boosted sales and profits. This creativity, in my view, demonstrates the power that a great marketing strategy can have in winning shoppers back.
Another benefit is the partnership with Qantas Airways Ltd (ASX: QAN) through its loyalty scheme. I believe this also helps with the retention of customers because of the ability to convert points to Qantas Frequent Flyer points which can then be redeemed for flights.
In very simple terms, people need to continue shopping for groceries in the depths of a recession.
Telstra Corporation Ltd (ASX: TLS)
In all economic conditions, Telstra is another company I believe offers value if the stock market implodes. People will continue to use their mobile phones and internet.
According to the ACCC Communications Market Report 2018-2019, Telstra commanded a leading market share of 47% in fixed broadband services and 41% for mobile phone services.
While earnings may be declining due to the NBN rollout, the dominant market share in the mobile market should help soften the blow.
In its 1H20 results, Telstra delivered customer growth of 137,000 in retail postpaid mobile services, 135,000 retail prepaid mobile services and 173,000 pre and postpaid and IoT Wholesale services. 5G is having a positive impact in attracting customers.
Also, the ASX telco reconfirmed guidance for FY20 with underlying earnings before interest, tax, depreciation and amortisation (EBITDA) in the range of $7.4 billion to 7.9 billion and free cash flow after operating lease payments in the range of $3.3 billion to 3.8 billion.
BHP Group Ltd (ASX: BHP)
As the lowest-cost iron ore producer, BHP is the fittest if the iron ore price were to significantly decline. The company also mines copper, metallurgical coal, petroleum, nickel and potash.
The recent sell-off represents value to investors. For the half-year ended 31 December 2019, BHP announced revenue growth of 7% to US$22,294 million and an increase in profit after tax by 29% to US$4,868 million. The company also announced a dividend of 65 US cents per share to shareholders.
Commenting on BHP's first-half results, CEO Mike Henry stated, "BHP is in good shape…We have brought together high quality assets in a simple portfolio that allows us to create value at scale. Our balance sheet is strong…".
I believe the range of commodities BHP mines and the strength of the company should mean it is able to withstand economic shocks.
Foolish takeaway
Share market implosions give investors an opportunity to buy some of Australia's leading and best companies at a discount. It's important for investors to look past the media headlines and look at the underlying businesses.
