It’s no secret that the stock market has been volatile in recent years. I’ve felt this personally in my Stocks and Shares ISA. This is a tax-efficient way to buy shares and lets me invest £20,000 every tax year with immunity from capital gains tax. Unfortunately, it’s down heavily, over 30%, but two of my holdings give me hope. Let’s take a closer look.
Flying into clearer skies?
While I’ve added a number of firms to my portfolio, including Rolls-Royce and Cineworld, I bought International Consolidated Airlines Group (LSE:IAG) shares in the middle of the pandemic.
It was, and still is, my belief that the airline conglomerate is oversold and that a recovery is due at some point as international restrictions are relaxed. While this has come true to some extent, there are still problems.
Since I bought the shares, I’m down over 15%. This comes amid surging jet fuel costs and inflation. There are also fears of a recession, which could further dent travel demand.
However, the business recently bought 37 new Airbus narrowbody aircraft and converted a loan into a 20% stake in Spanish airline Air Europa.
Furthermore, for the six months to 30 June, operating profit was €293m, up from a €967m operating loss the previous year.
With an improved cash balance of €9.2bn, IAG should be able to navigate short-term storms and emerge as a leaner, more profitable company in the long term. As such, I’m really not that worried about the fact that I’m down over 15%.
Drilling for oil
Another investment that excites me is Pantheon Resources (LSE:PANR). The firm – an oil exploration company in Alaska – is one of my higher-risk investments.
In a fragile and volatile market, my initial investment is up around 25%. Like many other businesses, it’s currently suffering from supply chain issues and inflation pressures. These both have an impact on the firm’s ability to carry out exploration activities.
While the business isn’t yet at the production stage, it estimates that it has oil-in-place equivalent to 23.5bn barrels of oil.
Even at a conservative recovery rate of 10%, this may equate to nearly 2.5bn barrels of oil going into production. This can only be good news for the company.
It also recently finished exploratory drilling at the Alkaid 2 well, reporting a significant improvement in reservoir quality. Alkaid 2 may add to the initial estimates of the amount of oil present in Pantheon’s zone of exploration.
Overall, while my Stocks and Shares ISA is down heavily, I’m cautiously optimistic going forward. These two companies, in particular, present exciting growth opportunities for my portfolio. To that end, I’ll continue to monitor these businesses and consider adding to my holdings on any significant share price dips.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
