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Market volatility returns with enthusiasm as fears grow over soaring inflation and central bank rate hikes. This leaves some good buying opportunities on the downside and I am currently looking for blue chip stocks to buy.
Here are two that I believe will recover strongly from the current weakness and provide excellent long-term returns for my portfolio.
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science in sport
Price: 54p per share
Market capitalization: £77m
The broader demand for goods and services declines when times are tough for consumers. But I think science in sport (LSE: SIS) could prove more resilient than many UK stocks. This penny stock makes protein powders, energy gels and other nutritional supplements that help athletes keep going.
People don’t give up on their athletic and fitness goals when times get tough. Even if they can’t afford an expensive gym, they can switch to a low-cost operator. Or they can train in another way, like running on the road using home fitness equipment. So I expect demand for Science in Sport products to remain strong.
From a growth perspective, I like the company’s strategy of building the brand through partnerships with elite sports teams and organizations. It has partnered with 330 such organizations, and progress with NBA basketball and NFL football teams in 2021 helped boost US revenue by 50% last year.
Intense competition will likely remain a threat to science in sports. But I’m confident the company could still deliver excellent returns to shareholders in its rapidly growing market. Grand View Research analysts believe the sports nutrition industry will nearly double in size by 2030 (to $82.3 billion).
AfriTin Mining
Price: 6.8p per share
Market capitalization: £75.7 million
Commodity producers like AfriTin Mining (LSE: ATM) are generally not popular stocks when economic conditions deteriorate. The prices of the products they produce can fall when fears about demand increase. AfriTin’s recent rapid price decline illustrates this point and poses a big threat to this particular mining stock.
I’m still thinking about buying AfriTin shares today. Indeed, I’m focused on the company’s long-term earnings prospects and expect sales of its tin to skyrocket in the years to come. I predict that the consumption of solder metal will increase as the demand for consumer electronics grows.
I think this tin miner could also be a particularly lucrative way to exploit the coming “commodities supercycle”. On the one hand, the expansion of its flagship Uis project in Namibia is expected to significantly increase tin production in the coming years. The extension of the current operation should increase production from 850 tonnes per year to 2,800 tonnes in the medium term.
I also like the company because working at Uis will also give him significant exposure to lithium and tantalum. AfriTin hopes that drilling at the site will increase the resource estimate from 71.54 million tonnes of tin to 200 million tonnes of tin, lithium and tantalum. Lithium demand is expected to rise sharply with sales of battery electric vehicles.
