The last three months have seen some exceptional company results released. Should investors be thinking about buying any of those stocks? These Fools think so!
Admiral Group
What it does: Admiral is a diversified insurance underwriter specialising in motor, household, travel, and pet insurance.
By Zaven Boyrazian. In the world of British insurance, Admiral (LSE:ADM) is currently dominating. Or at least, that’s what its latest interim report suggests. The firm now has over 10.5 million customers after a 12% bump year-on-year, with UK motor insurance policies being the most popular product.
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Thanks to some prudent early decision-making from management when inflation started ramping up, Admiral insurance policies are now priced fairly competitively.
That’s despite the fact that overall prices are higher compared to a few years ago. And when paired with the surge in customers, the group’s total turnover has exploded by 43%, reaching £3.2bn in the first half of 2024. Profits subsequently followed, resulting in a tasty 39% dividend hike!
With most of this performance stemming from motor insurance, the company’s policy portfolio has become riskier. After all, these types of policies are expensive and have a much higher claim rate than other insurance contracts.
If Admiral hasn’t charged the right premiums, profitability could be under significant pressure next year. Nevertheless, given the group’s impressive track record, it’s a risk I feel could be worth taking in the long run.
Zaven Boyrazian does not own shares in Admiral Group.
AJ Bell
What it does: AJ Bell is one of the UK’s largest investment platforms, providing administration, dealing and custody services.
By Paul Summers: If only I’d trusted my instincts and snapped up stock in investment platform provider AJ Bell (LSE: AJB) a while back, I’d be enjoying some great gains by now.
October’s trading update has only made me even more bullish on the mid-cap’s outlook. Total assets under administration stood at a record £86.5bn by the end of its financial year, helped by a 14% jump in customer numbers. With net inflows rocketing 45% to £6.1bn, I’d say confidence is definitely returning to the UK market.
Yes, AJ Bell needs to keep its fees competitive if it’s to hold on to those new clients. A “painful” Budget might also cause some volatility in the share price as investors adapt to any changes that are announced on 30 October.
Then again, this could provide me with a wonderful opportunity to finally buy in.
Paul Summers has no position in AJ Bell.
Bloomsbury Publishing
What it does: Bloomsbury Publishing prints a broad spectrum of books spanning fiction, non-fiction and academic publishing.
By Royston Wild. Bloomsbury Publishing (LSE:BMY) is best known as the publisher of the Harry Potter blockbuster book series. However, the company is about much, much more than the world’s most famous wizard, as latest financials showed.
Sales across its fiction and non-fiction categories remained strong in the four months to June, the firm announced in July. This followed on from Bloomsbury’s strong financial year ending February 2024, during which revenues and pre-tax profit soared 30% and 57% respectively.
Fiscal 2024 was especially notable for fantasy fiction sales, only this time from the world of Sarah J Maas rather than JK Rowling. Sales of her titles rocketed 79% year on year, and with further titles in the pipeline from its current star author, fantasy revenues should remain white hot.
I’m also encouraged by Bloomsbury’s ongoing push into the academic publishing arena. Its acquisition of Rowman and Littlefield’s academic publishing operations in May gives it even bigger exposure to the lucrative US market.
Weak consumer spending could dent profits growth in the near term. However, I think on balance there’s a good chance it should continue delivering impressive sales.
Royston Wild does not own shares in Bloomsbury Publishing.
Just Group
What it does: Just Group provide financial advice and retirement products geared towards the older retail client base.
By Jon Smith. Just Group (LSE:JUST) shares have almost doubled over the past year. Part of this surge has come following the release of strong results back in August.
Under the title “consistently outperforming our targets”, the report detailed how the defined benefit and retail divisions continued to grow. This helped to push operating profit up 44% versus the same period in 2023. It’s benefitting from being in a market that is structurally growing, as well as taking market share away from competitors. As a result, the firm upgraded the outlook for the rest of the year.
I’m thinking about buying the stock, based on the strong momentum that it has right now. However, one concern is that the insurance sector is one of the most tightly regulated in the UK. As a result, any changes imposed could have a material impact on the company.
Jon Smith does not own shares in Just Group.
