Forget a Cash ISA! I’d buy these 2 bargain FTSE 250 growth stocks today

These two FTSE 250 (INDEXFTSE:MCX) shares could be undervalued in my opinion, and may offer superior returns to a Cash ISA.

| 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.

The FTSE 250 may have risen by 12% in the first half of 2019, but there continue to be a number of shares that could offer good value for money.

Certainly, with the index being focused on the UK there is political and economic uncertainty facing many of its members.

But when compared to the 1.5% return on a Cash ISA that is available at the present time, now could prove to be a good time to access the growth potential of a range of mid-cap stocks.

With that in mind, here are two FTSE 250 shares that appear to offer growth at a reasonable price.

Future

Global platform for specialist media, Future (LSE: FUTR), released an encouraging trading update on Monday. It reported that the positive performance it experienced in the first half of the year has continued. As a result, it anticipates that its performance for the full year will be ahead of previous guidance.

The financial outlook of the company has been boosted by strong audience growth within its Media division. It has also seen a positive contribution from recent acquisitions, while being in the process of searching for a new CFO following a change in position to Chief Strategy Officer for the current CFO.

In the current year, Future is forecast to post a rise in earnings of 16%. Despite this strong rate of growth, the stock trades on a price-to-earnings growth (PEG) ratio of just 1.3. This suggests that it could offer good value for money, and may be able to deliver further share price growth following its 118% rise since the start of the year.

G4S

Also offering an encouraging financial outlook is FTSE 250-listed G4S (LSE: GFS). The security specialist is expected to post a rise in earnings of 12% in the current year after what has been an uncertain period for the business in recent years. Since it trades on a PEG ratio of 1, it appears to be cheap relative to many of its mid-cap peers.

The company’s recent trading update showed that is has experienced strong sales wins in recent months. It is also making progress with a separation review that has the aim of creating two separate businesses in order to unlock shareholder value. This could be a sound move for the business, and could offer greater specialism and efficiency over the long run.

As well as its growth potential, G4S also has an increasingly appealing income outlook. The stock currently yields 5% from a dividend that is covered twice by profit. This suggests that there is scope for growth in shareholder payouts, which may provide an additional boost to its total return over the long run. As such, now could be a good time to buy a slice of the stock from a value, income and growth perspective.

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 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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 »