FTSE 100 shares have performed well over the last 12 months. The index is 2.6% up, compared to an 18% decline for the FTSE 250 and a 15% drop in the S&P 500.
I think that 2023 could be another strong year for FTSE 100 stocks. And there are two in particular that I have my eye on as I look for buying opportunities at the start of January.
Endeavour Mining
Top of my list is Endeavour Mining (LSE:EDV). The company owns and operates gold mines across West Africa.
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In the middle of a choppy stock market environment, Endeavour’s share price has fared well. The stock is up by around 3% since the start of the year.
When I look ahead to 2023, I’m expecting more of what we had this year — that is, rising interest rates, high inflation, and headwinds for corporate profitability.
In that context, Endeavour’s shares look attractive to me. Furthermore, I think the company will do well over the long term.
Its mines have some of the lowest costs for producing gold anywhere in the world. This should help it remain profitable even if the price of gold drops.
The biggest risk with the company is the possibility of political instability in the countries where its mines are located. If serious unrest materialises, it could be a big problem for shareholders.
In my view, though, there’s never a bad time to own a low-cost gold producer. And if 2023 goes the way that I’m expecting it to, buying the stock at the start of next year will pay off in the long run.
InterContinental Hotels
The other stock I’m looking to add to my portfolio is InterContinental Hotels Group (LSE:IHG). I think there are some near-term headwinds for this company, but I like its long-term prospects.
Unlike Endeavour, the stock is down by about 4% since the beginning of January. But I see this small dip as a buying opportunity for me.
With a recession on the horizon, it might seem like a strange time to be buying shares in a hotel company. Pressure on budgets could mean lower demand for holidays, causing sales to slow.
But InterContinental’s business model means I don’t think this will be a lasting problem. Around 71% of the company’s hotels are franchised, leaving operating costs to individual owners.
That means the firm doesn’t have significant costs to cover while revenues are under pressure. Slowing sales might be a bad thing, but I expect the impact to be short-lived.
Investing in 2023
Endeavour Mining and InterContinental Hotels are two very different ideas. One should hold up well, the other looks like a buying opportunity due to temporary headwinds.
Currently, I don’t own either stock in my portfolio. But I’m expecting to buy both in 2023 to continue to diversify my FTSE 100 investments.
