Some FTSE stocks have offered excellent returns in the past 12 months. Safestore Holdings (LSE:SAFE) is up over 70% in the past 12 months. Is it too late to buy shares for my portfolio or is the upward trajectory set to continue? Let’s take a look.
Storage demand on the rise
Safestore is the UK’s largest provider of self-storage solutions and the second-largest provider in Europe. Safestore has 176 stores across five countries including France and Spain. In the UK it has 125 locations with 47 in London alone.
One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.
The rise in demand for self-storage space since the pandemic began has been linked to economic performance. The burgeoning housing market and e-commerce boom for businesses has led to the need for more space and storage solutions. Safestore is one of a number of FTSE stocks in this space that have benefitted. Others that spring to mind are Big Yellow Box and Clipper Logistics.
As I write, shares in Safestore are trading for 1,340p compared to 12 months ago when they were 769p. A 74% return is impressive. Shares have also surpassed pre-crash highs of 854p in February 2020 and are currently trading at all-time highs.
Performance and outlook ahead
Safestore has a good track record of performance. I understand that past performance is not a guarantee of the future but I use it as a gauge when reviewing investment viability. I can see that revenue and gross profit have increased for the past four years including 2020, which was affected by the pandemic.
In its most recent trading update released on 18 November for Q4, Safestore’s impressive performance continued. Revenue, closing occupancy, and average storage were all up compared to the same period last year. There was progress in all locations nationally and internationally too. Full-year results are set to be ahead of expectations which is good news for potential investors and existing shareholders alike.
In addition to the positive financial news, Safestore confirmed plans for new sites and stores in the UK, Spain, and France, which is pleasing to see. There are also plans to extend other locations with more space to meet increased demand. FTSE stocks that have impressive performance coupled with a clear plan for growth are those I am on the lookout for.
FTSE stocks have risks
Safestore does have its risks too. Its recent performance has been linked to economic positives as mentioned earlier. The housing market could tail off due to the end of the stamp duty holiday as well as rising inflation and record house prices. This could affect demand. In addition to this, rising inflation and costs could eat away at margins for Safestore. Finally, with the Safestore share price trading close to all-time highs, if the demand were to tail off or negative news arose, it could result in a share price drop.
Overall, I believe Safestore’s upward trajectory is set to continue. I wish I had bought shares earlier to have achieved an even better return but I would still buy at current levels. I am tempted to do this before full-year results are announced in mid-January, as they are expected to be ahead of expectations.