I’m constructing a list of the greatest — and cheapest — FTSE 250 stocks to buy for my Stocks and Shares ISA. Here are a couple I’ll be looking to purchase when I next have cash to invest.
Gold star
Gold miner Centamin‘s (LSE:CEY) share price has soared on Wednesday following a correction to reserve estimates at its flagship mine. Yet at current prices of 99.8p per share, I think the commodities company still offers splendid all-round value.
It trades on a forward price-to-earnings (P/E) ratio of 9.8 times. And its dividend yield for 2024 sits at a healthy 3.5%.
In an exciting update today, Centamin — whose Sukari mine in Egypt is one of the biggest gold mines on the planet — raised its proven and probable (P&P) reserve estimates for the asset to 5.8m ounces. This is up 10% from the 5.3m the company announced to the market back in October.
This means that the group’s P&P reserves have been hiked by 3.5m ounces (before depletion) since 2020, ahead of the firm’s target of 3m.
Centamin is a company with significant long-term investment potential. It is not only ramping up production at Sukari (which has a mine life extending out to 2035). It also has a collection of solid exploration assets under its belt, including the Doropo project in Côte d’Ivoire. This particular complex has a maiden mineral reserve estimate of 1.87m ounces.
Investing in mining companies is risky business. Problems at the exploration, development, and production phases can be common and massively expensive. But in the case of Centamin, I believe the possible benefits outweigh the dangers.
I’ll drink to that!
Unlike Centamin, pub operator JD Wetherspoon (LSE:JDW) doesn’t offer a juicy dividend yield for 2024. But a rock-bottom price-to-earnings growth ratio (PEG) still makes this an exceptional value stock I’m hoping to buy.
For this financial year (to July 2024) the FTSE 250 firm has a PEG ratio of 0.4. This is well below the watermark of one that indicates a stock is undervalued.
Wetherspoons shares have backtracked on Wednesday despite the release of impressive first-half trading numbers. This reflects some light profit taking by investors, rather than anything in the statement that’s alarmed the market. At 834.5p, the company’s share price has soared 31% in just three months.
Its position at the value end of the leisure market continues to serve the business well. Demand for its cheap pints and pub grub meant like-for-like sales soared 10.1% during the 25 weeks to 21 January.
Like all leisure businesses, revenues at Wetherspoons could run out of steam if consumer spending remains under severe pressure. But the firm’s resilience so far is highly reassuring to me as a potential investor.
Wetherspoons’ like-for-like sales soared 15.2% in December, well ahead of the 8.8% increase that the broader pub and restaurant industry enjoyed. And this was no anomaly: the business has beaten its peers for 16 consecutive months.
I don’t think this excellent record is baked into the company’s current share price. So I’ll be looking to add the company to my value shares portfolio alongside Centamin at the next opportunity.
