3 distressed stocks with huge potential that I’m considering for my portfolio!

These three distressed stocks have performed badly in 2022, but that doesn’t mean they won’t recover. Here’s why I’m considering buying!

| More on:
Stack of British pound coins falling on list of share prices

Image source: Getty Images

I’m not often hunting for distressed stocks to add to my portfolio, but these three have caught my eye. Polymetal (LSE:POLY), Ferrexpo (LSE:FXPO) and Petropavlovsk (LSE:POG) have all seen their share prices hit after Russia invaded Ukraine and Western partners introduced sanctions on Moscow. These events have worried investors and raised concerns that these three mining firms may struggle to continue their operations. However, there’s also huge potential for share price growth here if these firms can continue operating and selling their products.


Polymetal shares sank in February and March. The UK-listed gold miner has highly profitable assets in Russia and Kazakhstan. However, the firm has highlighted concerns about access to funding after Russia and Russian banks were hit by sanctions. Despite this, the Anglo-Russian miner is operating close to 2021 levels. It’s also benefiting from higher prices for its gold and silver.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

Polymetal will remain a top-10 global gold producer and top-five global silver producer if operations aren’t impacted. Production fell 6% in Q1 but the company is still forecast to produce 1.7m ounces of gold this year. That’s the same as 2020, and with higher prices, it could even be a more profitable year for Polymetal.

I owned Polymetal stock before the war and recently doubled my holding as I think there’s a huge growth opportunity here. Based on last year’s earnings, it currently has a price-to-earnings (P/E) ratio of just 1.5. Despite this, I accept that there’s a lot of risk here including the possibility that Polymetal could be sanctioned if the war escalates further in Ukraine.


On the P/E metric, Ferrexpo looks even cheaper. The miner has a P/E ratio of just 1.2 after its share price tanked this year. The stock is down 69% over 12 months despite despite iron ore – Ferrexpo’s main product – increasing in value during 2022. Some 70% of Ferrexpo’s mines are in war-torn Ukraine and the firm is seemingly not operating at full capacity.

Ferrexpo recently announced that Q1 iron ore pellet production came to 2.7m tonnes. The figure is in line with the same period in 2021, but 11% below the previous quarter due to “operational and logistical constraints“. However, according to Liberum, the miner’s production levels suggested that it was operating at 70% of capacity during March. 

I’m looking to add Ferrexpo to my portfolio but the ongoing nature of the war presents a huge risk.


Petropavlovsk is a London-based gold mining company with operations in Russia. However, I foresee more challenges for it than for Polymetal. The company is in a catch-22 situation with sanctioned Gazprombank demanding immediate repayment of approximately $201m due under its committed term facility agreement. Despite production increasing, the miner is also struggling to sell its gold, primarily because its main customer, Gazprombank, was sanctioned. These factors, coupled with $300m owed to Western investors, are making it increasingly likely that Petropavlovsk will default on its debts. I’m keeping Petropavlovsk on my watchlist because its trading at a fraction of its pre-war price, but for now, I’m giving this one a miss.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

James Fox owns shares in Polymetal. 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.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Young brown woman delighted with what she sees on her screen
Investing Articles

3 easy actions that could boost my stock market returns

The UK stock market is going through a sticky patch so this Fool is looking for ways to improve his…

Read more »

Hispanic man using laptop in home office and drinking coffee
Investing Articles

Boohoo shares: time for me to admit defeat?

This Fool is nursing heavy losses from his Boohoo Group (LON: BOO) shares. Should he sell up and move on?

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

6% dividend yields! 2 cheap UK shares to buy in July

Harshil Patel considers two cheap UK shares paying fairly high dividends. He'd consider them for his Stocks and Shares ISA.

Read more »

Social media and digital online concept, woman using smartphone
Investing Articles

Will Lloyds shares recover in 2022?

Lloyds shares have struggled this year and the looming recession won't help. But I'd still buy them today.

Read more »

Two hands holding champagne glasses toasting each other with Paris in the background
Investing Articles

Can the stock market make me rich even now?

Here are three ways I'm coping with the stock market's recent bout of weakness and aiming to build wealth in…

Read more »

Cogs turning against each other
Investing Articles

3 top investment trusts to buy right now

Investment trusts offer a wide range of options for investors. And in troubled times, they provide some safety through diversification…

Read more »

pensive bearded business man sitting on chair looking out of the window
Investing Articles

Why hasn’t the FTSE 100 crashed in 2022?

The catastrophic events of 2022 have left investors around the globe fearing the worst for stock markets. And some have…

Read more »

Trader on video call from his home office
Investing Articles

2 inflation-resistant FTSE 100 stocks to buy today

Soaring inflation could dent my returns if I don't take care. Here are two top inflation-resistant FTSE 100 stocks I'd…

Read more »