Share investors might be feeling like they’re stuck between a rock and a hard place. Markets continue to sell off and the FTSE 100 is again down by triple digits on Friday business. Recent sell-offs mean, though, that there are lots of quality, dependable stocks trading at rock-bottom prices to choose from.
With the deadline approaching to max out this year’s ISA allowance just around the corner, now is a great time for bargain hunters to load their Stocks and Shares ISAs with some last-minute lovelies. You just have to be that bit more careful when making your selections.
One share I’m thinking of loading up on myself is IG Group Holdings (LSE: IGG). As it happens, this is actually a share that is thriving since the coronavirus crisis erupted. Financial market volatility has caused a spike in trading activity and as a result revenues leapt 29% in the three months to February, to £139.8m.
The derivatives trading giant served 101,700 over-the-counter (OTC) leveraged active clients in the quarter, it said, up 21% year on year. And average, OTC leveraged revenues per client rose 9% annually to £1,330. It’s likely that IG Group will continue to witness strong sales growth in the months ahead, too, given the worsening Covid-19 infection count outside China and intensifying lockdown measures across the globe.
Riding the volatility
There’s a variety of other issues that could support IG Group’s top line during the short-to-medium term, too. The coronavirus crisis threatens to create huge macroeconomic and geopolitical upheaval well into the new decade. It has also raised tensions between the US and China and potentially jeopardised recent good news on trade talks. The Brexit saga still has to be resolved, too. Widening political fissures in Europe provide an added obstacle for the global economy as well.
This FTSE 250 firm is no flash in the pan, however. Sure, it faces threats from growing regulation for its retail clients. But I’m confident IG Group, which is taking steps to get ahead of such problems, will be able to avoid the worst of the fallout.
Besides, I’m confident that the company’s decision to double-down on its foreign operations should create big long-term rewards. Its ‘Significant Opportunities’ business covers the European Union, the US, Japan, and emerging markets. IG Group plans to turbocharge revenue here from £60m in the last financial year to £160m in fiscal 2022.
Current share price weakness leaves IG Group trading on a reasonable forward price-to-earnings (P/E) ratio of 15.4 times. It carries a monster 6.5% corresponding dividend yield, too.
In volatile times like this it’s clearly impossible to rule out fresh share price drops in the days ahead. Regardless, I’m convinced that this is a brilliant stock for those who buy shares for the long haul.
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Royston Wild has no position in any of the shares mentioned. 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.