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While FTSE100 AND FTSE250 indexes have recently fallen, not all stocks on the stock exchange London Stock Exchange fallen. Believe it or not, some stocks rallied when markets experienced turmoil, protecting investors from volatility.
Want to learn more? Here’s a look at two of these stocks.
Rising while the market is falling
One group of companies that often perform well when market volatility increases are financial trading companies. The reason they tend to outperform is because volatility creates trading opportunities – when markets swing wildly, clients want to make more trades.
One of my favorite British actions in this area is IG Group (LSE: IGG). I’ve highlighted this name several times recently as an underrated growth (and revenue) play.
He’s having a great run at the moment. It actually hit recent all-time highs this week.
Compared to the FTSE 100 (which it is expected to join later this month), it is performing much better. It’s up about 6% over the month compared to the index’s decline of 6%.
Even near all-time highs, I still see a lot of appeal in the stock. Because it still looks relatively economical (the forward-looking price-to-earnings ratio is only 12) and offers an attractive dividend yield (3.1%).
Meanwhile, the company is performing well and has just announced a strategic review to ensure it takes full advantage of the long-term opportunities ahead. “We operate in gigantic and fast-growing markets driven by structural factors, so it’s time to raise our ambitions,” – the company said in an update.
It is worth emphasizing that IG operates in a competitive market. The players he faces include: Robinhood and Trading 212.
However, it seems to be able to cope in the face of increasing competition. So I think it’s worth thinking about a portfolio.
Near 52-week highs despite market weakness
Another company in this industry worth taking a look at is CMC Fair (LSE: CMCX). It offers similar services to IG, but is much smaller (it is in the FTSE 250 index).
Right now, it’s not at an all-time high. However, this is near 52-week highs, which means almost everyone who bought the stock last year is now in the black.
I see a lot of appeal in this name as well. Like IG, it is economical (P/E ratio is 11.5) and has an attractive rate of return (4.4%).
It also has momentum at the moment. It has recently made several gigantic white label deals that could have significantly boosted growth (one of which involved Australian banking giant Westpac).
I’ll say it again: competition is a risk. Nowadays, traders and investors have a lot of choice when it comes to platforms.
However, at a below-market valuation and above-average yield, I like the risk/reward proposition. In my opinion, it is worth taking a look at this action now.
