The FTSE 100 is packed with the biggest companies in the entire UK stock market. Every so often, I sift through the index to find interesting businesses to add to my portfolio. Armed with a spare £1,000, I’ve found two that I think could be strong performers for me going forward. Let’s take a closer look.
Potential safe haven?
Fresnillo (LSE:FRES) has seen its share price rise around 20% in the past six months. At the time of writing, it’s trading at 743p.
In recent results for the six months to 30 June, the Mexico-based silver miner reported that production was up 0.4% year on year. This is an indication that the firm has made its operations more consistent following the pandemic, when lockdowns impacted production.
However, over the same period, profits halved to around $141m. In addition, revenue fell by 14.2% year on year, coming in at $1.26bn.
Indeed, Bank of America reduced its price target from 920p to 810p based on the decline in both profit and revenue.
It’s worth bearing in mind, though, that these results have been negatively affected by the fall in the underlying price of silver. It’s down 16% in the past year.
In recent months, demand has been rising again. This is because investors are flocking to precious metals as these are considered safe-haven investments during times of economic turmoil. This may be good news for Fresnillo.
Benefiting from higher interest rates
HSBC (LSE:HSBA) is another company I’m considering adding with my spare cash. In the past three months the shares have risen 14% and currently trade at 547p.
The banking giant recently posted positive results for the three months to 30 June. During that time, it beat both revenue and cost expectations by 2% and 4%, respectively. Additionally, revenue grew by 12% year on year.
This all comes amid rising interest rates, which means that banks can charge more for borrowing services. While this may be good for companies like HSBC, the cost-of-living crisis and higher energy bills may end up deterring potential customers from taking on more debt.
However, for the first half of 2022, the business posted a net profit of $9.2bn, up from $8.24bn the previous year. Furthermore, basic earnings per share (EPS) rose from $0.36 to $0.42. These figures suggest that the 2023 dividend could be up to 25% above expectations, according to Deutsche Bank, which increased its price target from 751p to 760p.
Overall, both of these companies may have the capabilities to deliver growth over the long term. While there are naturally some challenges ahead, I view these as short-term in nature. To that end, I’ll use my spare £1,000 to buy shares in both Fresnillo and HSBC and hold them for a long period of time.
Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin“ prices, now could be the time for savvy investors to snap up some potential bargains.
But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.
Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…
We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
- 2 FTSE 100 shares I’d buy for lifelong passive income!
- How I’m investing £200 a month in these 2 FTSE 100 shares
- Should I buy Fresnillo shares amid recession forecasts?
- HSBC shares soar as profit falls! What’s going on here?
- Best British stocks to buy in August
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Andrew Woods has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo and HSBC Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.