These 2 FTSE 250 stocks are flying, but am I too late to the party?

Our writer breaks down why these two FTSE 250 incumbents have experienced a surge recently, and whether she could still capitalise.

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Scanning the FTSE 250, I noticed that Britvic (LSE: BVIC) and Bakkavor (LSE: BAKK) shares are among the best performers in 2024 so far.

Let’s take a look at whether I could still buy some shares today to help boost my holdings.

Britvic

The soft-drinks producer has seen its shares rise a mammoth 50% in 2024 to date from 840p at the start, to current levels of 1,262p. I reckon a big part of this ascent has been two failed bids from drinks giant Carlsberg as part of a takeover bid.

Over a 12-month period, the shares are up 49% from 846p at this time last year, to current levels.

There is every chance that another bid could be incoming, and existing shareholders could be compensated handsomely. Alternatively, there is a chance that this may not happen.

In the case of the latter, there’s a good investment case for an established business with an excellent track record of growth, return, and a dominant market position. A dividend yield of 2.6% at present is decent. However, I do understand that dividends are never guaranteed, and past performance is never a guarantee of the future.

The one issue I have when considering buying some shares now is Britvic’s lofty valuation. The shares now trade on a price-to-earnings ratio of 20. Is this because of the takeover bid? I think so. Could the shares plummet if any future bids aren’t successful? This is a possibility.

At present I’m going to sit on the sidelines and watch how things develop. However, I must admit, I’m a fan of the business.

Bakkavor

Bakkavor is a fresh-food producer of items such as pasta, pizza, salads, and more. It has experienced a resurgence in 2024 to date.

The shares are up a huge 81% from 81p at the start of the year, to current levels of 147p. Over a 12-month period, they’re up 58% from 93p at this point last year, to current levels.

Bakkavor looks like a good business to me. It is capitalising on a burgeoning sector, as we lead increasingly busier lives. Plus, it has a wide presence, operating in lucrative segments including the UK, US, and China.

I reckon the shares took off after a positive update for 2023 released in March. The key takeaways from the report for me were that revenue, profit, free cash flow, and dividend-per-share all increased compared to 2022. Plus, net debt decreased. In addition to this, a Q1 update in May also made for positive reading.

From an investment perspective, the shares offer a forward dividend yield of 6.6%. Plus, analysts reckon this could grow. However, I do understand that forecasts don’t always come to fruition.

Taking a look at the valuation, Bakkavor shares trade on a price-to-earnings ratio of just 15, which still looks decent to me.

From a bearish view, inflationary pressures could put a dent in profit margins and potential returns. There’s clear evidence in the firm’s past track record of external events, such as a pandemic or geopolitical conflicts, impacting earnings and returns.

At this point, I’d buy Bakkavor shares when I next have some funds to invest.

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 assessed. Consider taking independent financial advice.

Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has recommended Britvic Plc. 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.

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