It’s been a tough few days for the FTSE 100. Only a week ago the market was trading above 7,600 points. It closed yesterday below 7,400 points, with concerns that further losses could be around the corner. Yet despite this hopefully-short-term blip, I think there are some great growth stocks that are falling and represent a buying opportunity for me right now.
Taking advantage of volatility
As we head into May, I need to be careful about which growth stocks I target to buy. The underlying issues causing the fall won’t be going anywhere in the next few weeks. So I need to ensure that I’m buying the right stocks in the right areas.
For example, commodity prices continue to be volatile due to the ongoing war in Ukraine. It’s putting a strain on some energy companies, as well as consumers. So I’d steer clear of any company that could potentially be under financial pressure. However, I can look to buy a stock like Glencore (LSE:GLEN).
As one of the largest commodity producers and traders in the world, it has a broad exposure. This is both from a geographical viewpoint and also in a product sense. The large trading arm actually benefits from volatility. Further, the increase in prices helps the business by it having an end product to sell that’s worth more than it was a few months back.
This growth stock has already moved higher, with the share price up 51% over the past year. However, it has fallen by 10% in the past month. I personally don’t think that this short-term move is justified. On that basis I’d put this on my list as a top stock to buy now.
UK growth stocks flying the flag
Another reason for the FTSE 100 slump is fresh concerns over growth in Asia due to Covid-19. And the market is being dragged lower as US stock markets are falling due to inflation issues. Both of these are outside of the UK, yet do impact FTSE 100 companies due to the international exposure most have.
Therefore, I’d stay away from some growth stocks that have a large percentage of trade in Asia and the US for the time being. One company I like is NatWest Group (LSE:NWG). The group includes the NatWest operation, but also the private bank Coutts and other smaller entities. The share price is up 12% over the past year but is down 3% in the past month.
Even with some international locations, the group has the majority of its customer base in the UK. It shouldn’t be overly impacted by events elsewhere. This should help me protect my investment (if I choose to buy the shares), even if other international companies continue to struggle.
As a risk, having concentrated exposure to the UK might not be a good thing. The economy here is slowing down, with some saying that the Bank of England won’t be hiking rates as aggressively as previously thought.
I’d try and reduce this UK by investing in NatWest alongside other growth stocks such as Glencore.