May hasn’t exactly got off to a flyer. More falls on Monday means that the FTSE 100, for instance, has lost all the gains it recorded in late April’s rally. It leaves ISA investors in a quandary as to what to do next.
Lockdown measures might be easing in many parts of the globe. But the relentless rise in Covid-19 infection rates leaves a huge shadow over whether quarantine conditions will continue to be lifted. The economic impact of the coronavirus continues to rattle investor sentiment, then. And it’s not the only issue that could keep plaguing market confidence.
Relations between China and the US threaten to worsen as the coronavirus blame game continues. A lack of progress on Brexit trade talks could see UK and EU lawmakers end negotiations prematurely. And oil prices are in danger of sinking further as the supply and demand situation worsens.
Good as gold
These are not necessarily reasons for ISA investors to hide away, though. In this environment there are plenty of safe-haven stocks that could jump in value as the social, economic, and political uncertainty continues. There’s a wide selection of such flight-to-safety favourites that look too good to pass up at current prices, too.
One stock I’d be very happy to load into my own Stocks and Shares ISA is Caledonia Mining Corporation. Right now it trades on a forward price-to-earnings (P/E) of just 8 times, a figure that fails to reflect the exciting outlook for gold prices in my opinion. Investors can also enjoy a chunky dividend yield close to 3% for 2020, too.
Caledonia isn’t just a great buy on strong safe-haven demand for precious metals like gold, though. Production boomed by almost 20% year on year in the first quarter of 2020, reflecting in part the operational improvements the AIM stock put in place at the tail end of last year.
Another great ISA buy
Now Gamma Communications (LSE: GAMA) doesn’t offer the sort of brilliant paper value that Caledonia Mining does. In fact it commands a premium rating today, a forward P/E ratio of around 28 times. But passing up on the tech giant because of its big price tag could prove a costly mistake.
Firstly, telecoms is one of those classic safe-haven sectors that attract investor interest in tough times. We all need to stay connected, right? So demand for Gamma’s stock could take off in the months ahead as the horrifying economic cost of the Covid-19 crisis becomes apparent.
In fact, this AIM stock could prove to a big winner in the post-pandemic world. Why? Well more and more companies will embrace the opportunities that home working will bring. It’s a phenomenon that millions of workers all over the globe will be demanding, too. And it’s a step change that Gamma, through its voice, connectivity, and mobile products (like video conferencing and messenger services) is well placed to capitalise on.
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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.