2 top FTSE 100 shares to buy for a market correction

Andrew Woods discusses two FTSE 100 companies he thinks could provide opportunity in a falling market.

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As interest rates continue to rise, there’s the very real possibility of yet another correction within the stock market. To that end, I’ve been hunting for companies that could soften the blow for me. Here are two FTSE 100 stocks I’ll be buying soon. Let’s take a closer look.

Consistent profits

The Fresnillo (LSE:FRES) share price has been volatile lately, and it’s up 13% in the past month. At the time of writing, it’s trading at 730p.

In times of crisis, investors tend to flock to precious metals, because these usually hold their value. As such, I find this Mexico-based silver miner attractive.

The business has been consistently profitable over the past five years, culminating in a pre-tax profit of $611m in 2021.

YearPre-tax profit
2017$741m
2018$483m
2019$178m
2020$551m
2021$611m

Despite this, for the six months to 30 June profits fell over 50% to $141m. In addition, revenue declined by more than 14% to $1.26bn. 

While this may seem disappointing, it’s worth noting that much of this can be attributed to short-term issues. These include supply chain problems and labour shortages. Furthermore, silver prices have been falling recently, and this has decreased the value of Fresnillo’s produce.

While Bank of America lowered its price target to 810p, it stated that it believes the company’s issues may be resolved in the not-too-distant future.  

Heightened oil price

Second, the Shell (LSE:SHEL) share price has been benefiting from high oil prices. For instance, Brent crude is over $100 per barrel. In the past month, Shell shares are up nearly 11%. Currently, they’re trading at 2,330p.

For the three months to 30 June, the firm reported a profit of nearly $11.5bn, over $500m above expectations. Furthermore, refining profit margins tripled to $28 per barrel. It’s important to note, however, that this growth is not guaranteed in the future.

Although these margins are significantly greater than in 2021, I’m wondering how long this might last, given that there’s scope for the oil market to become better supplied. That oversupply might bring down the price of oil.

Despite this, the business has debt of $46.4bn, down from $48.5bn at the end of the previous quarter. 

In addition, operating cash flow stands at $57.66bn. This is attractive as a potential investor, because it means there’s potential for the firm to embark on more exploration and production activities.  

Overall, both of these companies have been solid performers over the long term. Fresnillo may provide shelter from any corrective storm that comes the market’s way. 

On the other hand, it may be prudent to gain some exposure to the exceedingly high oil price through an investment in Shell. As such, I’ll add both businesses to my portfolio soon, in order to better prepare for any turbulence ahead.

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 assessed. Consider taking independent financial advice.

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. 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.

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