The Motley Fool

Up almost 15% today! Should I buy shares in Future?

Businessman leading a chart upwards
Image source: Getty Images.

In the face of all the unknowns regarding the Omicron variant of Covid-19, most of the shares in my portfolio have so far either remained unchanged today, or dropped a little.

But some stocks moved higher on the London market this morning. And multi-platform media and digital publisher Future (LSE: FUTR) shot up by almost 15%. And over the past 12 months, it’s up about 117%. Something appears to be going well in the business. So should I buy the stock now?

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Stunning results

The catalyst behind today’s move higher was the release of the full-year results report. Back in July, the company said it expected the 2021 results to be “materially ahead of market expectations”. And today’s figures put numbers on the outperformance. The report must look like a thing of beauty to existing shareholders — it showcases a stunning outcome for the business.

For the trading year to 30 September, revenue shot up 79% compared to the prior year. Cash from operations leapt 115% and adjusted diluted earnings per share by 77%.

But this isn’t some bounce-back from a coronavirus slump last year — there was none. Future has powered through the pandemic with impressive increases in earnings year after year. The directors expressed their satisfaction and “confidence” in the outlook by slapping 75% on the shareholder dividend for the year.

Chief executive Zillah Byng-Thorne said in the report the “exceptional” results build on the long-term record of business growth. She thinks the strong performance arose because of the diversity of revenue streams in the business. Operations have a global reach and the “operating leverage” in the business model also helped drive progress.

High hopes for further growth in America

Byng-Thorne said 23% organic growth was because of the company’s “trusted content” attracting a high-value audience. And growth accelerated in the US where she’s “confident” the business will capitalise on the opportunity.

Around 35% of revenue came from the US in the period, with growth of about 25% compared to the prior year. However, performance in the region was below the 131% gain in revenues the business achieved with its operations in the UK.

As well as organic progress, Future is striding ahead with its programme of acquisitions. The year saw the company take over GoCo Group, Mozo, Marie Claire US, CinemaBlend and, after the period ended, Dennis.

A Covid winner

Byng-Thorne said Future’s business was boosted by Covid-19. But she expects growth to accelerate again in the second half of the current trading year. Meanwhile, City analysts have pencilled in an uplift in earnings of around 12% for the current year to September 2022. And that suggests the rate of growth will slow from the robust triple- and double-digit figures we’ve been seeing over the past few years.

With the share price near 3,666p, the forward-looking earnings multiple is almost 26 when set against that earnings estimate. I think that’s pricey and the high valuation adds risks for investors now.

So I’d be a little cautious about buying the stock today. Nevertheless, I think the business could have a bright future, so I’ll keep the stock on watch, waiting for a better-value entry point.

Meanwhile, I'm running the calculator over this one...

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you'll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

Kevin Godbold 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.