1 FTSE 250 stock to buy for long-term growth

Jabran Khan explores a FTSE 250 stock he believes is primed to grow in the long term and explains why he would add shares to his holdings at current levels.

| 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.

macro shot of computer monitor with FTSE 100 stock market data in trading application

Image source: Getty Images

FTSE 250 incumbent Oxford Biomedica (LSE:OXB) could be primed for growth for many years ahead, in my opinion. Here’s why I would add the shares to my holdings now.

Pharma growth play

Oxford is a biotech firm that specialises in the development of gene-based medicines. It was best known for its drug development platform LentiVector. This platform provides larger pharma firms the opportunity to create new treatments efficiently. Oxford charges fees for the use of its platform and receives royalties from successful drugs created and sold. Recently, Oxford is best known for its successful and lucrative partnership with AstraZeneca to create a Covid-19 vaccine.

5 Stocks For Trying To Build Wealth After 50

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.

Click here to claim your free copy now!

As I write, Oxford shares are trading for 876p. At this time last year, the shares were trading for 989p, which is a 11% dip over a 12-month period. The shares have dipped 42% from 1,592p in November to current levels. Over a five-year period, the shares have returned 22%, whereas the FTSE 250 index as a whole has returned 17%.

Why I like Oxford Biomedica

I like the share because Oxford Biomedica’s recent and historic performance has been excellent, although I do understand that is not a guarantee of future performance. I use it as a gauge for determining investment viability. Looking back, I can see revenue and operating profit have increased in 2019 and 2020. With the vaccine rollout set to continue, and other deals in the pipeline, I would estimate 2021 figures could continue its performance growth streak of recent years. More recently, interim results, released in September for the first six months of 2021, were excellent. Revenue alone increased by 139% compared to the same period last year. This was primarily driven by the Covid-19 vaccine and demand levels being high.

I particularly like Oxford Biomedica’s business model which should keep revenue coming in. I mentioned earlier it generates income from platform fees and royalties from sales, which offers it some protection. For example, even if the drug developed by the larger pharma firm using the Oxford platform doesn’t make it to market, Oxford still made money from platform development fees.

Finally, Oxford is investing in its business and in 2020 opened a large new state of the art production site. This has helped it increase its ability to take on new projects and should help it increase performance and in turn, returns.

FTSE 250 stocks have risks

Pharma and drug development is a very competitive market. Although a lucrative market, every firm out there is looking to create, market, and sell the next big drug or treatment. This could affect Oxford’s performance if it were beaten by another firm involved in creating a new cutting-edge treatment. In addition to this, regulatory requirements in pharma are strict and ever changing. This could hinder its projects, as well as sales of any treatments. Royalties could be affected, meaning performance and financials could suffer.

Overall I am bullish on Oxford Biomedica shares right now and would add them to my holdings at current levels. I like its business model, as well as recent and historic performance. Analysts also believe the shares could reach as high as 2,000p! Of course, analysts’ forecasts may not always come to fruition. I believe the FTSE 250 incumbent is primed for long-term growth ahead.

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.

More on Investing Articles

Social media and digital online concept, woman using smartphone
Investing Articles

Apple stock: Buffett is long, Burry is short. What should I do?

Our author thinks about whether following Warren Buffet into Apple stock might be a good addition to his portfolio –…

Read more »

Close-up of British bank notes
Investing Articles

5 ‘no-brainer’ dividend shares to buy today

Is there an easy way to narrow down the list of FTSE 100 dividend shares? I try one approach, with…

Read more »

Close-up of British bank notes
Investing Articles

£5,000 to invest? 2 dividend-paying penny stocks I’d hold to 2030

I think these high-yielding penny stocks could help cushion the impact of high inflation on my returns. Here's why I'd…

Read more »

Renewable energies concept collage
Investing Articles

2 green stocks that I think are no-brainer buys for the future

Jon Smith explains two of his favourite green stocks at the moment, one for growth and the other for income…

Read more »

An airplane on a runway
Investing Articles

The Rolls-Royce Share price may be set for take-off!

After an upbeat Civil Aerospace Investor Day, here's why I think the Rolls-Royce share price could be set for take-off…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

2 beaten-down growth stocks to buy as inflation rises

Despite inflationary pressures and recession concerns, I am looking at some top growth stocks to solidify my portfolio over the…

Read more »

Stack of British pound coins falling on list of share prices
Investing Articles

Is the IAG share price too good to miss at current levels?

Jabran Khan delves deeper into the current state of play with the IAG share price and decides if now is…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

5 of the highest-paying income stocks compared! Which one is best for my portfolio?

Income stocks are certainly in vogue right now amid sky-high inflation. But which of these big dividend payers is the…

Read more »