Stock markets remain a sea of red for the third straight day as trade-related tensions simmer. The FTSE 100 leading index of stocks was last down 1.5% on Monday as worries over the global economy grew.
These two stocks have also fallen in value in recent sessions. But I believe they’re brilliant lifeboats to consider in the current situation. Here’s why.
Fresnillo
Even safe-haven precious metals have plummeted amid the broader financial market collapse. Gold and silver have both reversed sharply, which has in turn pulled Mexican mining stock Fresnillo (LSE:FRES) much lower.
Heavy profit-taking explains in part this sharp drop (gold values hit new peaks above $3,170 per ounce last week). It’s likely, too, that margin calls from brokers have prompted some investors to liquidate their positions in gold.
Finally, President Trump’s decision to (so far) exempt the yellow metal from fresh new US trade tariffs has promped some pullback.
New developments on the fast-moving trade front could cause further price volatility for metal values and Fresnillo’s share price. The FTSE 100 miner’s down 13.1% over the last week.
But I’m optimistic that prices of both could recover strongly in the current macroeconomic and geopolitical climate. Even stripping out ongoing worries over trade tariffs, returning inflationary pressures remain a very real threat. Then there’s signs of enduring stress in China’s economy, mounting worries over expanding political conflicts, and strong central bank interest in gold.
Even at current prices, the miner enjoys excellent profit margins — all-in sustaining costs (AISCs) for its gold mines were around $1,800 per ounce last year.
Recent price weakness means Fresnillo’s share price now trades on a price-to-earnings (P/E) ratio of 12.9 times. This is based on City expectations for annual earnings to rise 127% in 2025.
This represents excellent value in my book. A sub-1 forward price-to-earnings growth (PEG) of 0.1 also illustrates Fresnillo’s decent value.
Supermarket REIT
Companies with retail exposure are currently enduring massive uncertainty as trade wars intensify. Businesses like these face the threat of growing costs and weakening revenues if consumers baulk at higher prices.
This threat extends from retailers themselves to real estate investment trusts (REITs) which rent out trading space. Yet such threats are far less severe for Supermarket Income REIT (LSE:SUPR) than for many of its peers, and could (in my opinion) make it worth serious consideration.
For one, the FTSE 250 business — as its name implies — focuses on the defensive food retail market. People still need to eat whatever social, economic, or political crisis rears its head, meaning profitability among its tenants remains largely stable over the long term.
Supermarket REIT also has a blue chip list of tenants including Aldi, Sainsbury’s and Tesco. The chances of these retailers breaching the terms of their tenancies are slim-to-none.
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Earning here are tipped to remain unchanged this financial year (to June 2025). This means it trades on a reasonable P/E ratio of 12.1 times for this financial year.
With the business also packing an 8.2% forward dividend yield, I think it’s another attractively priced safe haven to consider right now.
