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World progress shares are dropping their lustre as ‘Trump Tariffs’ (and reciprocal motion from US commerce companions) threaten the economic system. The impression of recent import taxes might be devastating throughout quite a lot of industries.
I’ve misplaced none of my urge for food for UK shares, though I’m extra cautious with what I purchase at this time. One method to defend myself is to decide on counter-cyclical shares — and firms in historically defensive industries — whose earnings forecasts are boosted or unaffected by present financial situations.
With this in thoughts, listed here are two nice progress shares I’m contemplating proper now.
H&T Group
Pawnbrokers like H&T Group (LSE:HAT) are likely to thrive throughout robust occasions like these. Actually, this Various Funding Market (AIM) operator mentioned final month that “demand for our core pawnbroking product continues to develop, with notably sturdy lending demand within the closing ten weeks of the yr, together with document ranges of latest clients borrowing from us for the primary time“.
With the cost-of-living disaster dragging on, Metropolis analysts expect earnings at H&T to rise 5% in 2025. By the way, this additionally leaves the corporate buying and selling on a low price-to-earnings (P/E) ratio of seven.1 occasions.
The buying and selling panorama is very beneficial for H&T at this time because of the gold value surge. Bullion hit new document highs above $3,151 per ounce earlier at this time, and is tipped by many to maintain climbing as fears over the financial and geopolitical panorama rise.
On the draw back, retailers like this face recent price pressures because the Nationwide Residing Wage and Nationwide Insurance coverage contributions rise. H&T thinks NI modifications alone will end in a £2m hit every year.
However on stability, I nonetheless assume the pawnbroker’s an important inventory to think about in these robust occasions.
Chemring Group
Together with the broader defence sector, shares in Chemring Group (LSE:CHG) have elevated in worth following Russia’s invasion of Ukraine in 2022.
This particular FTSE 250 contractor has additionally rose strongly in February and March following a £1bn-plus takeover method from Bain Capital. But based mostly on present earnings forecasts it nonetheless presents respectable worth for cash.
Metropolis analysts assume earnings will rise 27% within the present monetary yr (to October 2025). This leaves it buying and selling on a ahead P/E ratio of 18.5 occasions and a P/E-to-growth (PEG) ratio of 0.7.
Any PEG under one suggests {that a} share is undervalued.
The steady nature of arms spending has made defence shares conventional lifeboats in robust occasions like these. However the sector’s attraction is even better at this time (in my view) as trade consolidation ramps up and international rearmament accelerates.
Chemring’s personal order consumption rose 187% within the yr to face at a document £1.4bn.
The corporate has commented that “with the brand new administration within the US pushing for important will increase in NATO defence spending and with EU member states recognising the crucial have to scale up and co-ordinate defence manufacturing throughout Europe, the market alternative for Chemring continues to develop“.
Decreased arms spending from the US stays a risk. However I consider on stability it’s value critical consideration in geopolitically-uncertain occasions.
