The bear market we’re experiencing right now is likely to throw up some amazing opportunities for long-term investors. While stock market volatility could remain elevated in the near term while there’s so much uncertainty, stocks should eventually recover.
With that in mind, here’s a look at two FTSE AIM 100 stocks I’m planning to buy more of while the stock market is depressed.
Boohoo
One I’m keeping a close eye on right now is Boohoo (LSE: BOO). It’s a fast-growing online fashion retailer that owns a number of popular brands including Boohoo, Pretty Little Thing, Nasty Gal, and Karen Millen.
Boohoo is yet to update the market on how the coronavirus is impacting its sales. Given that fashionable clothing is a discretionary purchase, I imagine sales have taken a hit due to the fact that there’s so much employment uncertainty right now.
That said, I’d be surprised if sales have fallen off a cliff. With many Britons now working from home, demand for comfy clothes, such as sweatpants and leggings, may have held up relatively well. And Boohoo’s insanely-low prices could be attractive for many people in the current environment.
Long term, the growth story here remains attractive, in my view. As our dependence on social media grows, we’re being more influenced by trends we see online. This is boosting demand for trend-driven clothes and accessories. Boohoo and its brands, with their millions of social media followers, look well-placed to capitalise on this trend.
In mid-February, Boohoo shares were trading at around 330p. Recently however, they’ve fallen as low as 133p. I’ll be looking to take advantage of this kind of share price weakness in the near future.
GB Group
Another FTSE 100 AIM 100 stock I’d like to buy more of for my portfolio is GB Group (LSE: GBG). It’s a leading provider of identity management and fraud prevention solutions. Operating in 79 countries, it has nearly 20,000 customers on its books, including the likes of Airbnb, Revolut, and William Hill.
GB Group has grown at a fast pace recently, registering five-year revenue growth of nearly 250%. This growth isn’t surprising, as identity fraud has risen at an alarming rate in recent years. In 2018, nearly 190,000 cases of identity fraud were reported in the UK.
Looking ahead, coronavirus disruption could impact growth in the near term (we’re yet to see any update). However, I expect the company to keep growing at a healthy rate over the medium to long term, as the world becomes increasingly digital and online fraud becomes more of a problem.
I’ve always thought GB Group is a great stock to buy on the dips. Because the company is growing quickly, the stock has often traded at a high valuation. In early January, for example, the trailing P/E ratio was about 44.
After the recent stock market crash, however, the valuation is much lower. I’ll be looking to grab some more shares for my portfolio in the days and weeks ahead.