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Summary
- Adding financial stocks in the portfolio is one of the popular investment strategies amongst investors.
- Investors with lesser risk appetite can consider these stocks for their portfolio
- SVE, BRH, and CMCX have delivered triple-digit price returns on a year to date scale
The financial sector has been up and running throughout the unprecedented crisis and supported the economy to a great extent. The banking and financial sector in the economy includes some of the largest banking institutions, insurance companies, consumer finance, financial services, along with mortgage lenders.
Adding financial stocks in the portfolio is one of the popular investment strategies amongst investors. Financial stocks are popular in the investment arena as they are considered less risky and often backed by the government. Investors often find themselves in a tight spot while assessing the most resilient businesses and find hard to apply their due diligence to decide if the characteristics of the stock are in line with their risk appetite. However, with all-time low interest rates prevailing in the economy along with changing landscape of banking some discouragement is there for potential investors, still, the sector is full of opportunity to explore
Also read: Should One Be Looking at Financial Services Stocks Now?
In this article, we would put our lens through some stocks in this sector which have delivered astounding price returns.
- Starvest Plc (LON:SVE)
Starvest Plc is a UK domicieled investment Group which invests in mineral exploration companies, focussing on small company issues and pre-initial public offering opportunities. The company was established as a source of financing to early-stage businesses. Due to substantial surge in select portfolio stocks such as Ariana Resources and Greatland Gold, the Company made an Operating Profit of £2,532,834, which also led to a Profit per Share of 4.53 pence during the six month period to 31 March 2020.
The company follows a strategy of directly investing in early stage resource projects with a focus in precious metals. With an increase in demand for sustainable energy products, the company is evaluating commodities such as lithium and cobalt to derive long term growth. The company’s net asset value has also increased during the period as compared to the same period last year. Any change in regulations regarding the exploration companies could affect the business of the Group. On a YTD scale, Starvest shares have delivered a price return of more than 850 per cent.
- Braveheart Investment Group Plc (LON:BRH)
Braveheart Investment Group Plc is a Yorkshire based financial services company incorporated in the year 1997. The company provides debt, equity, and advisory services to SMEs (small and medium enterprises).
The company enjoys fee-based revenue in the form of investment management fees during the fiscal year 2020. There was an improvement in the revenue to £397,000 in 2020 derived from the tactical subsidiary undertakings. The company incurred a total loss after tax of £563,000 during 2020, which was far less in comparison to the previous year. The company also announced a dividend of 0.5 pence per share during 2020. On a YTD scale, BRH shares have delivered a price return of nearly 430 per cent.
Also read: Standard Chartered and HSBC witness a slump in profits
- CMC Markets Plc (LON:CMCX)
CMC Markets Plc is a financial services Company based out of the UK, providing mobile trading and online trading services for institutional and retail clients.
The Group is likely to deliver a robust trading performance across its different business areas, driven by an ongoing focus on retaining and acquiring high-value clients and diversification through its institutional B2B and stockbroking business in 2021 as it looks to build upon the momentum it gained in 2020.
The company continued to manage its risks and client retention, which resulted in CFD net trading revenue of approximately £200 million during the first half of 2021. Driven by continued growth across the business, depicting the firming of the ANZ Bank white label collaboration, other than additional volatility in the markets resulting into improved client trading movement, the Group's stockbroking net revenue is expected to increase to approximately £26 million for the first half of 2021. On a YTD scale, CMCX shares have delivered a price return of nearly 122.40 per cent.
