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My Stocks and Shares ISA has more than doubled over the past five years. And I’m aiming for it to do that again in the coming years.
I own a selection of funds and several individual shares that I’ve picked. And although the funds have performed well, it’s the individual stocks that have outperformed.
Striking gold
Investors looking to do the same could consider Caledonia Mining Group (LSE:CMCL). This is a gold exploration and mining company. And right now, it’s enjoying strong profitability due to a sustained high gold price.
The company estimates profitability for 2025 will be “materially ahead of market expectations”. That’s a phrase that frequently makes me smile.
If profits are up due to a high gold price, then the big question is whether it can remain elevated. There are several reasons why prices have risen over the past few years. Among them is a combination of geopolitical risks, global trade tensions, and a weakening US dollar.
Where next for gold?
Global economies have experienced many shocks in recent years and gold is often used as a hedge against this kind of risk.
I think uncertainties could persist, which should keep gold prices elevated. The World Gold Council agrees, forecasting some possible upside for the rest of the year.
This could bode well for Caledonia Mining. That said, bear in mind that there are factors that could cause gold prices to fall and temper profitability for this business. For instance, if global conflicts ease, it could lead to a dramatic fall in gold prices.
Finally, I like that this share offers several appealing financial metrics. For instance, it has a price-to-earnings ratio of just 10, a return on capital employed of 18%, and a 30% profit margin.
This is exactly the kind of UK share that could potentially supercharge an investor’s Stocks and Shares ISA.
Idea for a winning Stocks and Shares ISA
Another cheap share with strong fundamentals is Volex Group (LSE:VLX). It’s a manufacturer and supplier of power and data cables. It might not be a FTSE 100 household name, but this UK business achieved over $1bn of sales this year.
It operates across a diverse range of sectors that includes electric vehicles (EVs), data centres, and medical equipment.
Volex is experiencing strong growth in EVs, where sales grew by 40% this year.
Global sales of EVs are projected to grow from 17m in 2024 to over 30m in 2030. This could bode well for Volex cables.
Strong earnings despite pressures
Despite tariff uncertainty and inflationary pressures, it reported an outstanding year of growth for the company.
And, although it operates in some strong markets, it’s important to note that it’s not immune to wider economic downturns. Also that it sells its cables across several borders, so any escalation of tariffs between countries could raise its costs.
Given strong earnings growth, its price-to-earnings ratio of 14 appears attractive. I also like that it’s a well-managed business with a well-respected CEO.
I’d also note that its Chief Operating Officer bought around £150,000 of shares earlier this year. And although purchases by management don’t always cause share prices to jump, it’s a further encouraging factor.
