2 FTSE 100 and FTSE 250 recovery shares to consider in September!
Looking for the best recovery shares to buy this month? Here are two great FTSE 100 and FTSE 250 stocks to think about next month.
A cheap gold stock
Surging precious metals prices have swept a wide selection of gold stocks higher in 2025. Hochschild Mining (LSE:HOC) for instance has risen 15% in value since 1 January.
However, the Latin American miner has endured a bumpy ride due to problems at its Mara Rosa mine in Brazil. And last week its shares plummeted after it warned “heavier-than-usual seasonal rainfall and contractor performance issues” would see it miss full-year production targets.
Group production is now tipped at between 291,000 and 319,000 gold equivalent ounces. That’s down from the previously-forecast 350,000-378,000 ounces.
Hochschild’s issues perfectly illustrate the high-risk nature of buying mining stocks. Yet at times like this, it’s also important to remember the potential upside of owning metal producers, and especially during gold bull markets. This includes producer profits that can rise far more sharply than the metal price, reflecting their largely fixed cost bases.
Indeed, even accounting for its first-half production issues, Hochschild’s pre-tax profits rose 32% over the period, outstripping the rise in the gold price.
With the FTSE 250 miner undertaking an extensive operational review to get Mara Rose firing again, now could be a good time to consider opening a position. And especially as its recent share price collapse leaves it on a rock-bottom price-to-earnings (P/E) ratio of just 9.9 times.
Building back stronger
It seems that, barring a minor miracle, housebuilder Taylor Wimpey (LSE:TW.) will be relegated to the FTSE 250 when the next quarterly reshuffle comes around.
The company’s dropped 19% in value year to date, making it one of the FTSE 100’s poorest performers. Concerns over the pace of future interest rate cuts (and its impact on homebuyer affordability) is denting investor appetite. It’s also been hit by further heavy remediation costs to fix fire safety issues at existing properties.
These issues remain risks going forwards. Yet I believe, on balance, that Taylor Wimpey’s share price drop represents an attractive entry point for long-term investors to consider. Recent weakness leaves it trading on a forward P/E ratio of 11.8 times. That’s well below the average of 15-16 times since mid-2020.
While the industry recovery has been lumpy, I’m impressed by its resilience despite the tough economic landscape. Zoopla data shows that the recent slowdown in house price growth has stabilised, with average property values up 1.3% in the 12 months to July.
Demand’s being propped up by falling interest rates and an increasingly bloody rate war among mortgage providers, factors that pushed homes sales 5% higher last month.
I think Taylor Wimpey will enjoy a slow recovery that accelerates as Britain’s booming population drives new-build home demand. The Office for National Statistics forecasts England’s population to jump 7.8% in the 10 years to 2032.
Taylor Wimpey’s formidable land bank gives it excellent opportunities to capitalise on this too. With a strong balance sheet, and the government pledging to ease planning restrictions, it has chances to build its bank still further.
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Royston Wild has positions in Taylor Wimpey Plc. The Motley Fool UK has no position in any of the shares mentioned. 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.
