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These FTSE 250 stocks are on sale! I’d buy them in an ISA today

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It’s hardly a shock that Bakkavor Group’s (LSE: BAKK) share price has capitulated following the Covid-19 outbreak. As a major player in the food-to-go market, it stands to lose big time from recent lockdown measures. A slow approach to easing quarantine measures casts a shadow over the FTSE 250 company’s earnings outlook for the remainder of 2020 too.

Sure, the FTSE 250 food producer has staged some impressive daily fightbacks of late. But it still remains around 40% cheaper from levels seen just before the stock market crash kicked off in late February. As a consequence, Bakkavor trades on a forward price-to-earnings (P/E) multiple of just 8 times. I reckon this represents irresistible value.

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Okay, the UK food-to-go market has been decimated in recent months. However, over the long term, this is a product segment that still has a very bright future. Prior to the Covid-19 outbreak, IGD had predicted this market would grow more than 26% in value between 2019 and 2024, to £6.3bn from £5bn previously.

According to the research house, “the channel is set to experience double the growth of the wider UK food and grocery retail market.” The coronavirus crisis has likely put paid to IGD’s forecasts, of couse. But the changing consumer patterns that were driving the food-to-go phenomenon before the pandemic broke remain intact. With people now slowly returning to work, it’s a phenomenon Bakkavor can gradually begin to reap the fruits of again.

This is why City analysts expect the FTSE 250 firm to strongly recover from a 29% earnings drop in 2020. In fact, a 30% bottom-line fightback is slated.

Another FTSE 250 bargain

Another top value buy from the FTSE 250 is Bank of Georgia (LSE: BGEO). Like Bakkavor, this is a company whose descent (it’s also lost a shade over 40% of its value since late February) can also be explained easily.

Banks are some of the most cyclical shares out there. And with a painful economic downturn coming (the country’s central bank is following others by slashing interest rates following the Covid-19 outbreak) investors are fearing sustained pressure on its profits.

This is a share, however, whose long-term earnings picture remains quite robust. It’s an outlook that isn’t reflected by Bank of Georgia’s even-cheaper P/E ratio of around 6.5 times, in my opinion.

2020 will likely prove a horror show for the FTSE 250 bank, as illustrated by City forecasts that earnings here will drop 42% year on year. It’s important to remember that changes to banking regulations to improve the quality of its loan book should help it to weather the storm. It also has a strong balance sheet to help it deal with this near-term turbulence.

The Eurasian country’s GDP growth forecasts for the medium term will likely take a hit. But this is an economy that should continue to go from strength to strength thereafter. City brokers expect earnings at Bank of Georgia to rebound 72% in 2021. I reckon it’ll keep impressing thereafter as well.

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Royston Wild 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.

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