The FTSE 250 has fallen back in the past few years, but in 2024 it’s been picking up again. Might it be set for a new bull run to outstrip the FTSE 100? I intend to add some mid-cap shares to my Stocks and Shares ISA in 2025.
Which I buy will depend on how they look when I have the cash ready in 2025. But if nothing much changes from today, I’m likely to be choosing from the three possibilities below.
I’ve pruned a few I consider too risky. They’re mainly the smaller oil and gas companies, and mining and commodities stocks. If I ever buy into those sectors, I’ll stick to the FTSE 100.
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Healthcare profits
Think of a company that owns and rents out healthcare facilities, primarily GP surgeries, on long-term leases to the NHS and to other customers.
Now consider the UK’s ageing population and the increasing demand for healthcare. Next, look at a share price that’s fallen so much that the forecast dividend yield has reached 7.4%.
What we’re looking at is Primary Health Properties (LSE: PHP). It’s out of favour at least in part because it’s a real estate investment trust (REIT), and they’re unpopular regardless of their individual business models.
That’s the risk I’ll face if I buy, with commercial properties under the cosh while borrowing rates are high.
But it would make my top three choices right now, were I ready to buy today.
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That’s entertainment
ITV (LSE: ITV) shares a couple of the same characteristics. It’s also had a tough five years, and the dividend also looks good. In this case, the forecast yield is bit lower at 6.7%, but it’s still a very nice one.
ITV’s woes come from a few tough years for advertising spend, coupled with the ever-increasing competition in digital entertainment.
But against that, ITV Studios provides service to some of the competition too, and that could provide a bit of a defensive backstop.
The real question is whether ITV can keep its dividend going in the next few years. The company’s management says yes, but the share price suggests big investors have doubts.
Looking at a forecast price-to-earnings (P/E) ratio of just 9.3 makes me want some.
Like the wind
I’d like to buy into renewable energy, in the shape of Greencoat UK Wind (LSE: UKW).
It’s structured as a REIT too, and I’m convinced that’s holding it back. Real estate is bad, so anything that invests in it must be bad, no matter what productive use it’s making of its assets. At least, that’s the way the sentiment look to me.
In the real world, this is a renewable energy infrastructure fund, and it owns a number of onshore and offshore wind farms.
One danger is that there’s a loss forecast for the current year, and that could push the shares even lower. But a return to profit in 2025 with a P/E of under nine puts this one on my 2025 shortlist too.
