The Motley Fool

UK shares to buy: a top FTSE 250 stock

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.

Sunrise over Earth
Image source: Getty Images

When looking for UK shares to buy, I recently stumbled across FTSE 250 stock Future (LSE: FUTR).

This company has gone from strength to strength over the past few years. And its growth has accelerated over the past 18 months. The magazine publisher has benefited as stuck-at-home consumers have turned to its online publications for entertainment. 

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

UK shares to buy for growth 

Future earns money via subscriptions and e-commerce transactions, such as advertising and affiliate revenue. According to the company, during the second half of its financial year, revenue growth from digital channels was “robust.”

The group’s top and bottom lines are also set to receive a boost from the acquisition of the price comparison website GoCo. Future has achieved £15m of cost synergies from this new acquisition so far. 

When I’m looking for UK shares to buy, I search for two essential qualities. Firstly, companies must show a robust competitive advantage. Secondly, they must have a proven track record of growth or growth strategy in place. 

The FTSE 250 company appears to have both of these. Future’s advantage is its size. In the competitive magazine industry, firms need to keep costs as low as possible. 

Future’s size means it can leverage accounting and human resources costs across the group without replicating functions. This could help management keep costs low and improve profit margins. 

This strategy could also help the company improve cash flow, which is vital for acquisitions. These have been a core component of the group’s growth strategy. 

To that end, Future recently announced the acquisition of Dennis, a leading consumer media subscriptions business. The business is paying around £300m for this asset, which reported revenue of £105m in 2020, and is forecasting growth of approximately 16% this year.

After the deal is completed, Future believes it can extract £5m of annualised synergies. It may also be able to enlarge the publisher’s subscriber base by leveraging its marketing power to reach more readers. 

FTSE 250 stock to buy 

While I think the company is one of the best UK shares to buy right now, I’m also well aware its growth strategy isn’t without risks. Future has been relying on debt to fund acquisitions.

It recently increased its borrowing facility to £600m to fund the Dennis deal. This could expose the firm to interest rate increases and leave it overstretched if it can’t get borrowing under control. The firm’s growth may also grind to a halt if it struggles to find any future acquisitions at attractive prices. 

Despite these risks, I’d buy the FTSE 250 company for my portfolio. Not only do I think it’s one of the best UK shares to buy right now, but I reckon as Future continues to expand, it has the potential to produce returns for my portfolio for years to come.

Our 5 Top Shares for the New “Green Industrial Revolution"

It was released in November 2020, and make no mistake:

It’s happening.

The UK Government’s 10-point plan for a new “Green Industrial Revolution.”

PriceWaterhouse Coopers believes this trend will cost £400billion…

…That’s just here in Britain over the next 10 years.

Worldwide, the Green Industrial Revolution could be worth TRILLIONS.

It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead!

Access this special "Green Industrial Revolution" presentation now

Rupert Hargreaves 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.

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.