FTSE mining shares have boasted strong performance this year, and this month especially. But which mining company is best and how do they differ? Here, I look at two FTSE mining shares I’d buy and hold. Both are strong prospects to beat a stock market crash, but I think each offers something different to its investors.

Stock market crash beneficiary?

Fresnillo (LSE:FRES) is a leading precious metals mining group based in Mexico and listed on the FTSE 100. It is the world’s leading primary silver producer and Mexico’s largest gold producer. These two precious metals have performed well, and the Fresnillo share price has risen by over 80% year-to-date. While the price of gold has increased, the price of silver has increased at a higher rate, hitting its highest price since 2016 and reducing the gold-silver price ratio.

Like many, Fresnillo has experienced some drops in production due to Covid-19 related disruption, maintaining its guidance on silver and reducing its guidance on gold. However, a restart of global industry activity should continue to support the price growth of silver. Fresnillo also produces lead and zinc, which are pivotal for lead-acid batteries for automobiles. I view Fresnillo as a sound investment to beat a stock market crash.

Natural commodities

Glencore (LSE:GLEN) is one of the world’s largest globally diversified natural resource companies. Being a FTSE 100 commodity trading and mining company, I think this makes it a diverse, and some might argue defensive, option. The share price had fallen  before recovering by over 50% since the last stock market crash. Production levels of coal, copper, and cobalt have all dropped as it has felt a harsher impact from Covid-19 restrictions than Fresnillo. This is largely due to national and regional lockdowns, which have forced Glencore to suspend some industrial assets. There has also been a history of legal investigations, most recently into mining operations in the Democratic Republic of Congo.

On a more positive note, Glencore is the world’s largest industrial supplier of cobalt and has signed a long-term partnership with Tesla which will use Glencore’s cobalt to make lithium-ion batteries. This is an exciting prospect given the hype of electric cars and current market value of Tesla. I think the size of Glencore and its future business means it can persevere through any potential fallout or volatility.

Foolish final word

Gold has the strongest reputation and I think it is a great hedge against a stock market crash. This was proven during the global financial crisis of 2008 when the price of gold surged. Silver also has a positive history and has attracted more attention from investors this year than in previous years. The reputation of precious metals speaks for itself but there are other metals forging their own reputation. Lithium and cobalt have already drawn attention from investors, and with the rise of Tesla, electric cars, and the future of batteries, the demand and value of these metals could skyrocket in the next couple of decades.

The post Stock market crash: 2 FTSE mining shares I’d buy appeared first on The Motley Fool UK.

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Ash Karandawala has no position in any of the shares mentioned in this article. 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.

The economy

Let’s start by looking at the state of the economy. The International Monetary Fund estimates that the global economy will shrink by 3% this year. This would make it the worst recession since the Great Depression of the 1930s. Already between March and May, the UK saw over a 19% fall in GDP. Unemployment is high and expected to increase as furlough support gradually diminishes. How long will this recession last? Well the last recession, onset by the global financial crisis of 2008, lasted five quarters in the UK.

So, what does this mean for UK companies? For some companies it means slow business, struggling operations, weak cash flow, and financial difficulty. The recession, coupled with lockdown and fears of a second wave of Covid-19, spells trouble for many UK businesses. This is where top UK AIM share Begbies Traynor steps in.

Rescue and recovery

Begbies Traynor is the UK’s leading corporate rescue and recovery practice. Founded in 1989, it has grown into a top company providing business recovery, financial advisory, and property services consultancy. A key part of its business is being an insolvency specialist. The unfortunate hardships and demise of some companies means more business for Begbies Traynor. Demand for its services has already increased this year, and I expect demand will increase even more over the next year. This is why I view Begbies Traynor as a top UK AIM share and one to beat the recession while the market and economy struggle.

What do the numbers say? Final results for its financial year ended 30^th April 2020 are announced on Tuesday 21^st July. Revenue is expected to be about £70 million, up from £60.1 million in 2019. Adjusted profit before tax is expected to have grown by around 30%. An interesting stat is its insolvency business had increased in the year prior to any impact from the Covid-19 outbreak. Furthermore, it maintained its interim dividend in May and has invested in IT to assist its remote working capability. All promising signs. I expect the share price to perform nicely upon news of the results.

The future

As the true economic impact of lockdown is realised towards the end of the year, companies will have a clearer view of where they stand in the fight for survival. On top of this, as forms of government support slow and cease, further repercussions will be felt. I expect some impacts to only materialise as late as early 2021. Begbies Traynor will have a clearer view of demand as time progresses, but I believe it will all be positive news for its business in the short and long term. That’s why I view Begbies Traynor as a top UK AIM share to beat the recession.

The post Next week’s stock market pick: how I’d beat the recession with this top UK AIM share appeared first on The Motley Fool UK.

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Ash Karandawala owns shares in Begbies Traynor. 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.

Manufacturing makeovers

Melrose Industries (LSE:MRO) is a FTSE 100 company that specialises in the acquisition and performance improvement of manufacturing businesses. It buys underperforming companies, improves them, and sells them for profit. It’s a no-nonsense company with expertise in efficiency and the financial backing to make big moves. An example of this was its hostile takeover of GKN back in 2018.

Manufacturing in the UK is suffering, with the aerospace industry especially under threat. Airbus announced 1,700 job cuts, which means around 10,000 job cuts in total across the UK supply chain. No doubt this will have altered any plans Melrose had for GKN and in the current climate it will need time to focus on those plans. However, it also creates the perfect opportunity for Melrose to scout out its next acquisition target. Once the true impact to the aerospace industry is realised, I wouldn’t be surprised if Melrose start shopping around again – and that’s why I believe it could be a stock market crash winner!

Risky retail option

Boohoo Group (LSE:BOO) is a FTSE AIM 100 UK online fashion retailer aimed at 16-30 year olds. It’s had quite the success story over the past five years. It holds huge influence on its young market audience as a UK festival sponsor and Love Island sponsor in 2019. It acquired Pretty Little Thing back in May, followed by Oasis and Warehouse in June.

Its story had been largely positive until this week when the news of poor working conditions and shameful pay below minimum wage was revealed at supplier factories. Its reputation is damaged and its share price has lost a third of its value at the time of writing.  I think Boohoo is a risky option now as the price may continue to fall. Although, if it manages the backlash well, it could steer itself back on course for success as online retail is still thriving. Boohoo proved a winner after the first market crash this year, could it emerge a stock market crash winner again?

Broadening its beverage offering

Diageo (LSE:DGE) is another FTSE 100 company and one of the world’s largest producers of spirits and beers. It’s boasted solid performance for years and in my opinion is a long-term buy-and-hold regardless of future takeover activity. Its acquisition potential makes it that much more appealing.

In 2017 it acquired Casamigos, the fastest growing super-premium tequila brand in the US. Nothing unexpected there. Roll forward two years to 2019 though and it made a more interesting acquisition in a majority shareholding in Seedlip, the world’s first distilled non-alcoholic spirit. This shows a willingness to diversify. Could its next move be into soft drinks? Fevertree Drinks may be an opportunity for Diageo to pair its premium spirits with premium tonic mixers.

We’ll have to wait for the dust to settle from a second crash but overall, I believe these three have potential to emerge as stock market crash winners.

The post Stock market crash winners: I think these companies have an opportunity to gain market share appeared first on The Motley Fool UK.

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Ash Karandawala has no position in any of the shares mentioned in this article. The Motley Fool UK owns shares of Melrose. The Motley Fool UK has recommended boohoo group and Diageo. 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.

It acted swiftly in March to reduce capital expenditure and scrap its 2020 dividend to save cash, but in previous years dividend yields have been high.

While on-trade sales through pubs and bars have dropped massively in recent months, I expect Marston’s off-trade sales to supermarkets to be far higher than normal. More people have been buying alcohol to enjoy at home, and Marston’s business allows them to benefit from this and maintain some, albeit smaller, revenue streams. This also gives it an edge over competitors with no off-trade sales.

FTSE 250 stock vs FTSE AIM UK 50 share

In the UK, the demand for beer and ale is secure. It’s not affected by fashionable demand like some spirits and mixers. Take Aperol Spritz for example, huge in the 1950s, then unheard of for decades, only to make a sensational comeback in 2019.

Fevertree Drinks is one company suffering after the gin and tonic fad seems to have come and passed. I view Fevertree as an acquisition target while its share price is almost 50% lower than its peak a couple of years ago. Focusing back on Marston’s, I believe there will always be a high demand for lagers and ales in the UK.

Marston’s biggest news has been that of its joint venture with Carlsberg UK last month. A partnership with a giant like Carlsberg signifies the long-term growth potential of FTSE 250 stock Marston’s. As part of the deal, Marston’s will receive a cash equalisation payment of up to £273 million, which will help reduce debt and provide some financial flexibility. On top of this, synergies between the two companies will allow expected value creation and cost savings of around £24 million by the end of 2023. Good news all round for the future.

The delayed interim results released on 26^th June held no surprises. First-half profits fell by more than 70% after a £40 million hit to revenues led to a drop in the share price. However, the whole sector is suffering, and while smaller businesses crumble, the larger companies will be able to hold their own and likely gain market share. That’s why I believe now is a good time to buy this FTSE 250 stock while the share price is relatively low.

Foolish final word

The recovery starts soon. The UK government announced that on 4^th July, pubs can reopen their doors with certain restrictions. Marston’s benefits from 90% of its pubs having outside space which means they can accommodate to these restrictions better than most.

I think it is far from last orders for this FTSE 250 stock and I predict a bright future. I’d pick Marston’s for strong share price growth and healthy dividends in the years to come.

The post A pub stock for the future: 1 FTSE 250 stock I’d buy now appeared first on The Motley Fool UK.

More reading

• Down 70%, is Fevertree Drinks a share to consider buying at 815p?

Ash Karandawala owns shares in Marston’s. The Motley Fool UK has recommended Marstons. 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.