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By Jason Simpkins
If you’re looking for a safe haven in today’s volatile U.S. stock market, Piyush Sharma, a senior equity research analyst for Longbow Research, has suggested the commercial printing industry might be a good place to seek shelter.
Markets have been extremely sensitive recently as credit problems continue to escalate. The Dow Jones Industrial Average closed at 12,845.78 yesterday, down 15.69 points, or 0.12%. But the real story was the wild ride it gave investors. The index plunged 100 points in the first four minutes of trading, and was down 343 points, before rallying to almost close the day at a breakeven point.
Even so, the Dow is down 1,150 points, or 8.2%, from its high above 14,000.
With such volatility investors will no doubt be looking for a few fortified safe havens and one might be commercial printing. As Sharma pointed out in a client note on Thursday, commercial printing companies outperformed the broader market during last two recessions. His top picks in the industry include R.R. Donnelly & Sons Co. (NYSE: RRD), and American Reprographics Co. (NYSE: ARP) – both of which he says boast stability and value.
Over the course of his career, Sharma covered the U.S. auto parts sector as an equity analyst for Sanford C. Bernstein in New York. He was also the economist at Bombay Stock Exchange, and worked with Citigroup GCB in credit analytics. He graduated with an MBA from the Kenan-Flagler Business School at UNC Chapel Hill and holds masters and undergraduate degrees in accounting and finance from MNNIT and the University of Allahabad.
Longbow Research is an independent institutional equity research firm based in Cleveland, Ohio. It provides fundamental research to more than 200 institutional clients in the United States and Canada.