This FTSE 250 stock is soaring! Here’s what I’m doing now

Jabran Khan details a FTSE 250 stock that has seen its share price explode. Should he buy or avoid shares for his portfolio?

| More on:

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.

FTSE 250 incumbent Future (LSE:FUTR) has seen its share price rally recently. Yesterday it increased handsomely based on excellent full-year results. Should I add shares to my portfolio at current levels? Let’s take a look.

Media giant

Future is an international media and digital publishing firm. It produces and maintains technology and works with leading brands throughout the world to enhance their presence and reach out to their customer bases. Some of its proprietary technology includes website platforms, email delivery systems, and lead generation tools.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

As I write, shares in Future are trading for 3,644p. A year ago they were trading for 1,792p, which is a 103% return! The FTSE 250 index in the same time period has only increased close to 13%. Future shares yesterday jumped 15% due to positive results.

Fantastic results continue

Future’s full-year results announced yesterday were extremely impressive. I am not surprised the share price jumped as a result. Future reported revenue had increased by 79% to £606.8m compared to last year. Operating profit increased 127% to £115.3m too. Cash generated grew by a mammoth 115%. From an operational perspective, organic growth was reported in all key territories, which is a good sign.

The good results prompted Future to declare a dividend of 2.8p per share. This is up from 1.6p last year. Shares that pay a dividend and could make me a passive income are usually an attractive prospect. Especially when they seem to be performing well and growing organically, which Future is if these results are anything to go by.

Future also has an excellent track record of performance and growth. I understand past performance is not a guarantee of the future. I tend to review this as a gauge. Revenue and operating profit have both increased year on year for the past four years.

FTSE 250 stocks have risks

I have two concerns with Future. Firstly, in its full-year results, it was confirmed that Covid-19 boosted the business in terms of growth and performance. Could this mean if the pandemic settles down we may not see such levels of growth once more? In addition to this, I have an issue with the current valuation of Future shares. At current levels it sports a price-to-earnings ratio of 56, which is a bit high for my liking. I could add shares at this level but if any negative news knocked the price down, I could lose out.

Overall I like Future as a company and its growth and results are there for all to see. I would consider buying shares for my portfolio but I think I will wait for them to fall a bit. Performance and growth will continue in my opinion but I want to buy shares a bit cheaper than current levels. There are other FTSE 250 stocks that are performing well that are better priced for my portfolio currently.

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.

Jabran Khan 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.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Risk reward ratio / risk management concept
Investing Articles

A top penny stock to buy in July

Penny stocks can carry higher risk for investors than larger companies. However, here is one low-cost UK share I think…

Read more »

Business development to success and FTSE 100 250 350 growth concept.
Investing Articles

Why 2022 could turn out a great year for buying growth shares

The appetite for growth shares appears to have waned in 2022, as the US Nasdaq has hit a bear market.…

Read more »

Piggy bank group pastel color background
Investing Articles

Should I buy PayPal stock in July?

The PayPal share price has fallen quite a long way from its all-time high. So, could July present a buying…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

2 great FTSE 100 stocks to own heading into a recession

Jabran Khan identifies two FTSE 100 stocks he feels are recession-proof and details their defensive capabilities.

Read more »

Young black woman in a wheelchair working online from home
Investing Articles

The Lloyds share price is down. Where will it go next?

In this article, this Fool looks at where the Lloyds share price could be heading, and whether it can return…

Read more »

positive mental health woman
Investing Articles

Waiting for a stock market recovery? I’m not

I'm not in a hurry for a stock market recovery. In fact, I think market volatility can be good for…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

My Stocks and Shares ISA has tanked this year! Here’s what I’m doing

As a long-term investor, I shouldn't be too bothered by short-term losses in my Stocks & Shares ISA. But it's…

Read more »

Shot of an young Indian businesswoman sitting alone in the office at night and using a digital tablet
Investing Articles

3 great dividend stocks to buy in July

Right now, many investors are turning to dividend stocks for protection. Here, Ed Sheldon highlights three shares he'd buy in…

Read more »