The Motley Fool

G4S plc set for FTSE 100 promotion. Sirius Minerals plc to enter FTSE 250

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.

Intu Properties (LSE: INTU) is odds-on for relegation from the FTSE 100 when the FTSE committee publishes its latest quarterly index review on Wednesday. G4S (LSE: GFS) currently sits in pole position to take its place.

According to my sums, Hikma Pharmaceuticals is also teetering on the brink of demotion, which could pave the way for Segro to join G4S in the top index.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Meanwhile, Sirius Minerals (LSE: SXX) is set to jump straight into the FTSE 250 following its recent move to the Main Market from AIM.

More to come?

It looked at one time as if G4S had established itself as a fixture in the FTSE 100. Having entered the index in 2007, the multinational security group performed relatively well through the market crash of 2008/09 and emerged as a middle-ranked blue-chip.

However, a combination of company problems and a recovery in the wider market saw it sink down the rankings to such an extent that it was demoted to the FTSE 250 in December 2015. Its shares went on to hit a multi-year low of 164p last summer.

Since then, the turnaround of the business has gained traction and the share price has just about doubled. Could there be more to come?

A forward P/E of 17.5 on forecast earnings growth of 17.5%, gives a rating bang-on the ‘fair value’ price-to-earnings growth (PEG) marker of one. However, analysts have been revising their earnings forecasts upwards and there could still be decent gains to be made here if that trend continues.

Contrarian buy?

It would take a miracle in the next couple of trading days for Intu Properties to avoid being ejected from the FTSE 100. It currently sits eight places below the automatic demotion threshold.

The company is largely focused on UK shopping centres. The shares have declined as investors have turned cautious on the prospects for the business in light of the challenging trading environment facing retailers and the considerable uncertainty regarding the UK’s EU exit.

I think investors are right to be cautious. I’m not convinced a P/E of 18 and a vulnerable-looking 5.2% dividend yield are sufficiently attractive to make Intu’s shares a contrarian buy.

Substantial rewards?

Shares of Sirius Minerals were trading at 18.25p on London’s junior AIM market when I last wrote about the company in February. They’re now 10p higher following positive news flow on the development of its massive North Yorkshire polyhalite project and a move to the Main Market. With a capitalisation of near to £1.2bn, Sirius is set to catapult straight into the FTSE 250.

If the company delivers its project on time and on budget, and meets its volume and price targets, I reckon the market cap could be above £15bn in 10 years’ time. To put that into context, Tesco is currently valued at £15.3bn and ranked number 34 in the FTSE 100.

Of course, with five years of construction and 10 years to targeted full production, Sirius is a proposition for risk-tolerant, patient investors with a long-term horizon. However, the rewards could be substantial if things go broadly to plan.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

G A Chester has no position in any shares mentioned. The Motley Fool UK has recommended Hikma Pharmaceuticals. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.