Ongoing volatility across financial markets leaves plenty of top-quality shares looking criminally oversold. Silver producer Hochschild Mining is one. It’s lost 30% of its value since the coronavirus panic landed in mid-to-late February.
That led to an undemanding earnings multiple of 14 times. So I reckon this makes it a brilliant buy for ISA investors.
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Precious metals are classic safe havens in tough times. And I expect the FTSE 250 digger’s share price to steadily recover from current lows of 125p. That’s because macroeconomic and geopolitical fears are likely to drive silver prices northwards.
But enough of that. Right now, I’d like to talk about another top stock to buy in these tough times. Step forward 888 Holdings (LSE: 888).
The online gambling giant’s actually recovered heroically from an initial selling rout. As I type, it’s actually trading more expensively than it was two months ago (albeit by mid-single-digit percentages).
Get flush with 888
Despite this more recent upswing, 888 still looks cheap on paper. At current prices (around 135p per share), it commands a forward price-to-earnings (P/E) multiple of just 14 times. This, in my opinion, makes it a clever pick for long-term ISA investors. Its ambitious expansion programme, supported by significant acquisitions, makes it one to watch in the years ahead.
Why has 888 outperformed the broader market? The robustness of its casino and poker businesses has limited the impact of the Covid-19 lockdown on its sportsbook. In fact, its other businesses have also experienced increased customer activity in recent weeks as bored citizens have been locked indoors.
Huge uncertainty persists over the timing and the scale quarantine measures will be rolled back in the coming weeks. But, in this environment, I reckon 888’s a great lifeboat for tense investors.
Another ISA hero
Ultra Electronics Holdings (LSE: ULE) is another FTSE 250 share that’s also performed resolutely in the face of the coronavirus outbreak.
It’s often said defence companies are brilliant lifeboats during economic, political, and social crises. Mankind’s eternal desire to wage war means earnings at the likes of Ultra Electronics can be relied on to keep on rising.
As the business comments: “Our capabilities and technologies can be found on many of the world’s long-term military programmes.
Last week’s trading update underlined the systems engineer’s exceptional resilience in troubled times. It said it expected only a “small” Covid-19-related revenues fall in 2020. This would be caused by ”weakness in commercial aerospace and wider customer driven delay.”
By and large, trading remains rock-solid. Ultra says its order book and demand is “strong”. And this isn’t just down to the reliability of sales to defence customers. It notes “demand in our defence markets and most of our critical detection and control markets remains robust.”
But Ultra hasn’t been totally immune to the panic that’s enveloped share indices recently. Its fallen around 10% in the past two months. But more fool the market, I say.
This provides an exceptional buying opportunity for ISA investors, in my opinion. A forward P/E ratio of around 15 times fails to reflect the tech giant’s impressive long-term earnings picture.