A market crash would be painful, but it could bring some expensive FTSE 100 shares back down to earth. I’m not hoping for one. However, keeping cash aside and a watchlist ready could make it easier to act when others are rushing for the exit.
My list contains three companies I rate highly, although I wouldn’t buy them all at today’s prices. Diploma‘s (LSE:DPLM) is my favourite, Rolls-Royce (LSE:RR.) is the one I feel I missed, and Halma‘s (LSE:HLMA) the defensive share I’ve watched for years.
Diploma: the compounder I’ll add to
I already own Diploma shares, but I’d like to build my position. The specialist distribution group serves industrial, healthcare and life-science markets where demand is often recurring. Its long-term growth record also reflects a steady programme of acquisitions.
The latest half-year results showed revenue rising 17% to £851.1m and adjusted operating profit increasing 33% to £208.9m. Meanwhile, it upgraded its 2026 organic revenue-growth guidance to 9%.
The shares recently reached a 52-week high, while RBC Capital Markets lifted its target from 7,400p to 8,000p and kept an Outperform rating. That target’s only about 3% higher than today, demonstrating just how high the current valuation is.
But stable stocks still face risks. A badly integrated acquisition is the key concern, along with foreign exchange costs and supply chain disruption.
A lower price gives me a better entry point, but it doesn’t remove those risks.
Rolls-Royce: the rally I missed
Watching the spectacular Rolls recovery has been hard for someone who missed the best prices. But the bull case remains convincing: civil aerospace is recovering, defence demand remains supportive and the power-systems division is growing.
Recent results show a company that isn’t slowing down: revenue grew 26% to £11.28bn and underlying operating profit up 46% to £2.53bn. Plus, 2026 guidance was boosted to £4.7bn-£4.9bn of underlying operating profit and £3.8bn-£4.0bn of free cash flow.
No wonder Berenberg recently raised its target to 1,900p, while Morgan Stanley and Jefferies both have targets of 2,000p.
But that optimism’s heavily reflected in the price. A slowdown in air travel, defence-budget cuts or disappointing progress on small modular reactors could change the story.
So I’d rather wait for a wider margin of safety than buy at this valuation.
Halma: quality at the wrong price
Halma is probably the highest-quality defensive share on my list. Its safety, healthcare and environmental businesses serve important markets, helping make revenue more resilient when the economy weakens.
Its latest full-year results were impressive. Revenue rose 15% to £2,58m, while adjusted EBIT increased 22% to £59m, with expectations of double-digit organic revenue growth for 2027.
One major broker, Stifel, is very bullish – its 4,500p target implies 26.5% growth from today! But the valuation gives me pause. Halma’s premium status may already reflect its dependable growth, but acquisitions, macroeconomic shifts and execution remain risks.
A crash could finally create the entry point I’ve been waiting for.
The bottom line
Markets are cyclical and downturns occur whether we want them or not. Worrying about them doesn’t help, and being unprepared leads to panic. That’s why I want to be ready for the inevitable.
Diploma, Rolls-Royce, and Halma top my list of shares I plan to buy at better prices, and they’re worth considering for any investor aiming for stable, long-term wealth accumulation.
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Mark Hartley owns shares in Diploma.
This story originally appeared on Motley Fool
