I have good feelings about the FTSE 250, as the mid-cap index typically climbs ahead of the FTSE 100 when the market’s in a bullish mood.
The bulls aren’t exactly running right now, I know. But as inflation data improves and interest rates come down further, I reckon the chances of a new surge could grow by the day.
Biotech resurgence?
And that’s when I think stocks like PureTech Health (LSE: PRTC) could start to shine once more.
This is a biotech business. And at the end of the last full year, the firm spoke of its “broad and deep pipeline”, and reminded us that it has as many as “29 therapeutics and therapeutic candidates, including two that have received both U.S. FDA clearance and European marketing authorization and a third (KarXT) that has been filed for FDA approval”.
PureTech stock’s had a bad year, as the appetite for smaller-cap growth stocks has faded. The new dip that kicked off in June hasn’t pushed the stock down quite as far as the 52-week low it set in December 2023. But we’re not far above it.
The road to profit
The key risk, as with so many similar stocks to this, is that there’s no profit yet. But forecasts at least see revenue starting to ramp up in 2025. And there seems to be plenty of cash on the books. As of December 2023, the company had “cash equivalents and short-term investments of $326m”.
As the economic clouds clear and investors are drawn back in to the stock market, I think we might see renewed growth stock sentiment. I’m very tempted to take the risk and go in with a small amount of cash. First-half results are due on 28 August.
Grounded airline
I don’t usually buy airline stocks. But Wizz Air’s (LSE: WIZZ) tanked in the past month, and it’s only slightly back up from its 52-week low.
In this case, the drop’s all down to Q1 earnings released on 1 August. The company revealed a crushing 98% fall in net profit, to just €1.2m.
CEO József Váradi spoke of “the resilience of Wizz Air’s ultra-low-cost business model.” I’m not entirely sure how such a huge profit fall can be a sign of anything positive, mind.
On the deck
Still, the problem looks to me to be a fairly short-term one. It’s all about plane groundings due to issues with the firm’s Pratt & Whitney GTF engines. At Q1 results time, the airline had 46 of its 179 aircraft firmly stuck on the ground. There’s going to be some compensation, which will help.
There’s intense competition in this business. And Wizz’s coming under pricing pressure, which I think it might have a bit of a struggle with.
But it still looks oversold to me. And this is another FTSE 250 stock I might buy a bit of when I have my next lot of investment cash ready.
