Consider These Two Growth Stocks for Your ISA Portfolio

Investors looking to enhance their Stocks and Shares ISA portfolios may want to consider two growth stocks: Glencore and Lion Finance. Both companies have shown significant potential for growth, driven by favorable market conditions and strategic positioning.

Glencore’s Strong Recovery and Market Position

Glencore (LSE: GLEN) shares have rebounded sharply from multi-year lows recorded in April 2023. This recovery has been largely fueled by positive developments regarding China’s demand for metals. The recent announcement of a major hydroelectric dam project in Tibet, alongside the Chinese government’s commitment to redevelop shantytowns, has lifted the outlook for mining stocks.

The easing of trade tensions between the United States and China has also contributed to a more favorable earnings forecast for commodities companies. Despite these positive trends, risks remain. Potential policy shifts from the White House could negatively impact cyclical stocks, including mining companies. Additionally, investing in mining stocks inherently involves exposure to the unpredictable nature of the metals market.

Nevertheless, Glencore benefits from its vast scale, owning mining projects across more than 35 countries. This diversification helps mitigate localized risks such as political unrest, labor disputes, and production disruptions. Furthermore, Glencore operates a robust marketing division, allowing it to reduce reliance on strong mining performance. In 2024, approximately 23% of the company’s adjusted earnings stemmed from its trading unit.

The range of commodities that Glencore deals with, including copper, cobalt, nickel, and aluminum, further stabilizes earnings. This diversification allows the company to capitalize on the anticipated commodities supercycle, making its shares an attractive option for investors. Analysts predict that Glencore will return to profitability by 2025, following losses per share in 2024, with expectations of a 76% increase in earnings next year and another 33% rise in 2027.

Lion Finance’s Growth Potential in Emerging Markets

Similarly, Lion Finance (LSE: BGEO) has experienced notable share price fluctuations in 2023, but the company has rebounded, driven by optimism surrounding Georgia’s banking sector. The demand for financial services in this Eurasian emerging market is surging, fueled by strong economic growth and rising personal wealth. Despite ongoing political uncertainties in Georgia, the market offers substantial growth potential due to relatively low product penetration.

Lion Finance holds a significant market position, allowing it to capitalize on this demand. The company has also expanded into Armenia, tapping into another emerging market, which has contributed to a remarkable 40.7% increase in pre-tax profits in the first quarter of 2023.

While established FTSE 100 banks like Lloyds and HSBC remain popular among investors due to their stability in regulated markets, regulatory reforms in Georgia are enhancing the attractiveness of operations like Lion Finance for those seeking long-term investment opportunities in banking. The company’s earnings per share (EPS) have seen an annualized growth rate of 55% since 2020. Although EPS is projected to decline by 15% this year, anticipated increases of 10% in 2026 and 18% in 2027 indicate strong future growth potential.

As investors weigh their options for Stocks and Shares ISAs, both Glencore and Lion Finance present compelling cases for consideration. Their respective market positions and growth trajectories suggest they could be valuable additions to a diversified investment portfolio.