FTSE shares: 1 I love and 1 I’m avoiding

This Fool takes a closer look at two FTSE shares on which he has widely varying views. One’s a miniature wargames leader, the other’s a telecoms giant.

| 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.

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

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

There’s an abundance of stocks on the FTSE that are piquing my interest right now. On the flip side, I see a fair few I plan to steer well clear of.

Here’s one I’d love to buy more shares of if I had the cash, and one to which I’m giving a wide berth.

A stock I love

Without a doubt, one of my favourite stocks in my portfolio is Games Workshop (LSE: GAW). The price is up an impressive 120.8% in the last five years.

Should you invest £1,000 in Harbour Energy Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Harbour Energy Plc made the list?

See the 6 stocks

Created with Highcharts 11.4.3Games Workshop Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

During that time, the firm has posted powerful growth. Last year, the business recorded its best performance ever, with revenue for the 53-week period to 2 June climbing to £525.7m from £470.8m the year prior.

With its growth, Games Workshop has become the leader in the miniature wargames industry. That gives it a competitive advantage over its peers.

CEO Kevin Rountree said in its latest results that the business has “a very clear strategy, which remains unchanged, a detailed operational plan for the year ahead and a great team to deliver it”.

There’s also passive income on offer with its 3.6% dividend yield. Its payout has steadily risen in the last decade. And with its incredibly strong balance sheet, I reckon we could see it keep increasing in the times ahead.

Competition is a threat. As the market becomes bigger and more lucrative, naturally more players will enter the space.

However, with its loyal customer base, I’m bullish on the stock. With that in mind, I’m eager to keep adding to my holdings in the months to come with any investable cash.

I’m steering clear

One stock I don’t plan on buying any time soon is Vodafone (LSE: VOD). In the last five years, the telecommunications titan has lost 52.1% of its value.

Created with Highcharts 11.4.3Vodafone Group Public PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

I reckon it could be a value trap. On paper, the stock looks dirt cheap at 72.1p. But I think there are plenty of other better options out there for investors to consider. Its shares trade on 19.4 times earnings. That looks too expensive to me.

I’m not writing off its turnaround potential. And in all fairness, it has made decent progress with its streamlining mission.

It has offloaded its Spanish and Italian businesses, raising €13bn in the process. With some of the proceeds, it intends to commence a share buyback scheme. In its latest Q1 update to investors, it said an initial €500m tranche of buybacks was almost complete.

But I see a handful of issues that deter me from dipping my toe in the market and buying some shares right now.

It still has plenty of debt on its balance sheet. It currently stands at €33.2bn. For comparison, its market capitalisation is £19.3bn.

On top of that, the business has struggled to grow its top line in recent years. Last year total group revenue fell by 2.5% to €36.7bn.

We’re still in the early stages of its turnaround. However, I’ll need to see its debt come down before I consider investing. That’s a major concern of mine.

Should you buy Harbour Energy Plc shares today?

Before you decide, please take a moment to review this first.

Because my colleague Mark Rogers – The Motley Fool UK’s Director of Investing – has released this special report.

It’s called ‘5 Stocks for Trying to Build Wealth After 50’.

And it’s yours, free.

Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.

And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.

That’s why now could be an ideal time to secure this valuable investment research.

Mark’s ‘Foolish’ analysts have scoured the markets low and high.

This special report reveals 5 of his favourite long-term ‘Buys’.

Please, don’t make any big decisions before seeing them.

Claim your free copy now

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.

Charlie Keough has positions in Games Workshop Group Plc. The Motley Fool UK has recommended Games Workshop Group Plc and Vodafone Group Public. 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.

We think earning passive income has never been easier

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

More on Investing Articles

Investing Articles

Want a comfortable retirement? Here’s how much you need in your SIPP

The SIPP is a great vehicle for confident investors to build their personal pension over time and eventually use that…

Read more »

Investing For Beginners

3 ways I try to spot cheap shares during a stock market crash

Jon Smith talks through his process of filtering for cheap shares at a time when simply buying anything isn't the…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

As share trading hits new records, here’s why I’m planning to keep buying UK shares!

Thinking like Warren Buffett and buying 'on the dip' can unlock significant long-term returns from UK shares. Here's why.

Read more »

Elevated view over city of London skyline
Investing Articles

UK stocks: a brilliant buying opportunity?

UK stocks have taken a battering in recent days. That can be disconcerting -- but our writer is taking a…

Read more »

Bronze bull and bear figurines
Dividend Shares

2 dividend shares that could provide some shelter from the market storm

Jon Smith points out a couple of dividend shares that have yields in excess of 5% -- and that have…

Read more »

Investing Articles

I’ve been snapping up shares in this 11.6% yielding FTSE 250 growth stock

As a trade war knocks a quarter of the value off this FTSE 250 asset manager in a few days,…

Read more »

Investing Articles

I asked ChatGPT which FTSE 100 stocks are screaming buys for Trump’s tariff war. Here’s what it said

As the trade war heats up and the sell-off in stocks resumes, Paul Summers is looking for great FTSE 100…

Read more »

Investing For Beginners

Analysts now expect up to 4 UK rate cuts this year! Here’s what it could mean for the FTSE 100 index

Jon Smith points to the rapidly shifting market expectations when it comes to UK interest rates and explains the impact…

Read more »