Stock markets can be notoriously hard to predict in the short term, as is evident from the market rally we’ve witnessed this month. No sooner did the vaccine news and the Biden win happen, that the FTSE 100 index started running up. As a consequence, shares I had pencilled in as some of my next buying options have seen unexpected share price increases. Even though I think these are solid stocks with much value to add over the long term, I think they’ll be an even better purchase for £5,000 if a stock market crash brings their prices down a notch or two. Here are three of them:
#1. Antofagasta: Betting on copper
The Chilean copper miner’s share price is at multi-year highs now, driven crucially by a return of demand. Improvements in the Chinese economy have impacted copper prices positively, which should bode well for Antofagasta. Additionally, its latest production update is packed with positives. Despite some setback to copper output in the latest quarter, production is as per expectations for all three quarters of 2020.
It also reports lower cash costs compared to last year. It expects production to pick up next year and it has successfully concluded negotiations with its labour unions. Further, it’s already a financially healthy company in a growth environment. What’s not to like? Except maybe, the run-up in share price.
#2. JD Sports Fashion: Long forgotten market crash
I already own shares in JD Sports Fashion, and it has been one of the best performers in my investment portfolio. This is in part because of the unstoppable rise in its share price. In the months since the stock market crash in March, its share price has more than doubled. Even better is the fact that this is still lower than where it was at the start of the year, which suggests it can rise more.
Despite having to close down its stores earlier in 2020, JD was in the green at the last update. I expect that its next set of numbers due early next year will show improvements, as the lockdowns lifted in the period since the last update. I’d buy more if there’s another crash.
#3. Taylor Wimpey: Improving outlook
The FTSE 100 real estate company’s positive trading statement coincided with both the vaccine news and Biden’s win. It’s little surprise then, that its share price has gained over 45% in the last month alone. Its positive outlook for 2021 can now quite likely get another boost now. I reckon TW’s share price will continue to rise in the future. Further, I think compared to many other FTSE 100 stocks it still looks quite affordable with a sub-14 times earnings ratio. To get even better returns, I’d wait for at least some drop in the stock price, however, and then invest £5,000 or any other amount that seems appropriate.
It’s ugly out there…
The threat posed by the coronavirus outbreak have spooked global markets in 2020, sending stock prices into a nosedive.
We’ve now entered our second national lockdown, and investors are worried that another stock market crash could be around the corner.
Against such a backdrop of market worry, it’s little wonder that many investors feel panicked. (After all, nobody likes to see the value of their portfolio fall significantly in such a short space of time.)
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Manika Premsingh owns shares of JD Sports Fashion. 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.