Are These The 5 Best Stocks In The FTSE 250?

Should you buy John Wood Group PLC (LON:WG), Laird PLC (LON:LRD), Redrow plc (LON:RDW), Tate & Lyle PLC (LON:TATE) and RPC Group plc (LON:RPC)?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Wood Group

While Wood Group’s (LSE: WG) share price has fallen by 16% during the course of the last year, the company’s bottom line continues to outperform most of its sector peers. For example, while a lower oil price has caused many oil stocks to post severe declines in profitability, Wood Group is all set to report an increase in its bottom line for 2014 of 21%.

And, while 2015’s forecast decline of 2% is somewhat disappointing, it would still represent a relatively good performance. Furthermore, with Wood Group trading on a price to earnings (P/E) ratio of just 9.1, it seems to be extremely cheap and, although its bottom line may be somewhat volatile moving forward, it seems to be a great buy at the present time.

Laird

Although ARM dominates the UK tech scene, sector peer Laird (LSE: LRD) seems to have a very bright future ahead of it. For example, it is forecast to increase its bottom line by 16% in the current year, followed by growth of 11% next year. This, when combined with a P/E ratio of 16.5, equates to a price to earnings growth (PEG) ratio of just 0.9, which indicates that Laird offers growth at a reasonable price.

And, unlike many of its sector peers, Laird has a top notch yield, too. It currently yields 4%, which makes it highly appealing for income investors as well as for growth investors, too.

Redrow

With there being a consensus among the major political parties regarding house building, now could be a good time to buy house builders such as Redrow (LSE: RDW). Certainly, more houses are required than are currently being built, and this is helping Redrow to increase its bottom line by a forecast 23% next year, and a further 20% in the year after that.

Despite this excellent growth rate, Redrow trades on a P/E ratio of just 9.8. This seems to be unjustifiably cheap when the company’s growth prospects are taken into account and, as such, it could be a top performer moving forward.

Tate & Lyle

While shares in Tate & Lyle (LSE: TATE) have disappointed in the last year, being down 13%, the future could be much brighter for the sugar producer. That’s because it is forecast to make a comeback from a challenging 2015 financial year (when it is forecast to have posted a decline in earnings of 31%) by increasing its bottom line by 18% next year.

And, while Tate & Lyle trades on a relatively high P/E ratio of 17, this strong growth rate means that it has an appealing PEG of 0.9. Furthermore, with a yield of 4.3%, its total return could be somewhat impressive moving forward.

RPC

Packaging company RPC (LSE: RPC) has increased its bottom line in four of the last five years, with it averaging growth of 26% per annum. While this rate of growth is not forecast to continue over the next couple of years, RPC offers relative reliability when it comes to earnings growth and this could appeal to investors during an uncertain period.

In addition, RPC also seems to offer growth at a very reasonable price, with it having a PEG ratio of just 1. And, with RPC having a well-covered yield of 2.9% that is forecast to grow to as much as 3.5% next year, it could prove to be a winning investment over the medium term.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Laird and Tate & Lyle. The Motley Fool UK has recommended Laird and RPC Group. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »