Despite a few wobbles along the way, the FTSE 250 index is up 33% over the last year. That’s clearly a great result for anyone following the second tier of the London market via a cheap exchange-traded fund or tracker. However, this rise pales into insignificance when compared to the returns generated by some of its members.
Luxury timepiece seller Watches of Switzerland (LSE: WOSG) may not have the catchiest of names, but I’m sure investors won’t be too worried. Its share price has soared 230% higher over the last year.
With many people still working through savings amassed during multiple UK lockdowns, I wouldn’t bet against the shares continuing their ascent, especially with international travel still proving problematic. Last week’s Q1 trading update certainly didn’t contain any red flags.
At £297.5m, revenue was over double that achieved for the same 13-week period in 2020. Importantly, it was also 46% higher than that seen two years ago, before Covid-19 arrived. For me, the latter gives a better indication of just how well WOSG is doing.
As well as selling an awful lot of expensive watches, the company also logged a 99% rise in jewellery sales to £20.1m. Earnings are growing overseas too. Sales in the US were particularly strong, helped by more people visiting stores in Las Vegas and New York.
With new stores due to open both here and abroad and the firm’s mysterious Xenia project set to launch next month, I suspect the good times might continue. Then again, a valuation of 32 times earnings is also pretty high and could come back to haunt me if general market sentiment turns.
So, while I think the long-term prospects remain solid, I wouldn’t necessarily throw everything I have at this FTSE 250-beater today. No stock rises in a straight line. WOSG remains a buy for me, albeit a cautious one, in my book.
20-year share price high
Media company Future (LSE: FUTR) is another company whose share price has made great strides over the last year. In fact, that’s something of an understatement. Yesterday, the FTSE 250 stock rose to its highest level in two decades!
The catalyst for this rise was news that the firm would be acquiring Dennis Publishing for approximately £300m. The latter owns titles such as The Week, MoneyWeek and PC Pro. With this deal, Future intends to further diversify its revenue stream via subscriptions and increase its reach into the lucrative US market (where its brands currently reach one in three people online).
This development follows hot on the heels of a recent, very positive trading update. Last month, the company announced that it expected its latest set of full-year results to come in “materially ahead” of what analysts were predicting.
Future’s share price has now climbed 166% in 12 months. This is another example of just how profitable stock-picking can be for those willing to put the time and effort into fully researching specific businesses. Of course, luck can also play a not-insignificant role in short-term returns.
Like WOSG, I’d be inclined to think this momentum will continue. Again, however, this would be a cautious (rather than screaming) buy for my portoflio. On 31 times earnings, quite a bit of good news looked priced in and there’s not much in the way of dividends to compensate me for any setbacks.
Paul Summers 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.