2 FTSE 250 stocks that could rally under the new Trump presidency

This Fool has identified two FTSE 250 stocks with US exposure that could reap rewards if the economy booms under Trump. 

| 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.

The flag of the United States of America flying in front of the Capitol building

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 no hiding the fact that many UK companies bring in the majority of their revenue from the US. Most however, aren’t those on the FTSE 250. It’s the more internationally-focused FTSE 100 companies that typically have headquarters around the world.

Still, there are a few outliers on the secondary index — and when it comes to growth, their smaller market-caps work in their favour. Of course, it’s too soon to assess where the US economy will go under Trump. But if it booms, I think investors should consider these two stocks for their growth potential.

4imprint Group 

4imprint Group (LSE: FOUR) markets promotional merchandise like branded stationary, USB drives and apparel. Despite being based in London, the 40-year-old company derives 97% of its revenue from the US. Some of its stand-out featured brands include US giants Nike, Camelbak and Sharpie.

Should you invest £1,000 in Bunzl 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 Bunzl Plc made the list?

See the 6 stocks

However, its drop ship distribution model faces risks from third-party service disruption. This can be costly and cause reputational damage. Still, the company has enjoyed spectacular success in the past 10 years, with the stock growing at an annualised rate of 21.4% a year. 

Created with Highcharts 11.4.34imprint Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

In its latest trading update, it expects pre-tax profits of $153m for the 2024 full-year, exceeding expectations. Released earlier this week (21 January), the update also outlines revenue expectations up 3% and a 5% rise in existing customer orders. The shares jumped 12% on the news.

Despite the rapid growth, it’s still trading at 32% below fair value based on future cash flow estimates. Reinforcing that estimate, the average 12-month analyst forecast eyes a price 30% above current levels.

Hill & Smith

Highways construction firm Hill & Smith (LSE: HILS) provides engineering solutions and galvanising services in the US. Following the country’s introduction of a $1.8trn infrastructure bill in 2022, Hill and Smith’s products have enjoyed surging demand.

The stock price has shot up by over 100% since. Consequently, it has a slightly higher-than-average price-to-earnings (P/E) ratio of 20. Still, I think there’s more room for growth.

Created with Highcharts 11.4.3Hill & Smith Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

While the company suffered from surging debt before Covid, this has been decreasing although it still outweighs cash flow. That leaves a risk of defaulting if profits slip and it struggles to cover interest payments.

Recently-appointed CEO Rutger Helbing believes the company “has excellent prospects for further value creation” and there’s “strong demand for our products and services, particularly in the US.

On 5 January, it paid a dividend of 16.5p per share to shareholders, up 15% from the previous period. This follows a 20% increase in revenue and a 39% rise in earnings. The yield now stands at 2.9%.

It could go either way!

While a booming US economy could help both these stocks, there’s a chance Trump’s tariffs send things the other way. That’s a key risk, besides the usual ones of foreign exchange fluctuations and regulatory changes. 

Taking into account the current valuations, I think the rewards here could outweigh the risks. In the coming years, both these stocks could climb much higher than today so I think they’re both worth considering right now.

But what does the head of The Motley Fool’s investing team think?

Should you invest £1,000 in Bunzl 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 Bunzl Plc made the list?

See the 6 stocks

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.

Mark Hartley has no position in any of the shares mentioned. The Motley Fool UK has recommended Nike. 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.

Our best passive income stock ideas

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

4 REITs Fools own for passive income

REITs often have higher-than-average dividend yields compared to other stocks, making them a solid choice to consider for passive income…

Read more »

artificial intelligence investing algorithms
Investing Articles

Up 272% in just a year, is Palantir stock just getting started?

This writer recognises that Palantir has grown its business very well -- but does the stock price offer him an…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Up 50%? The Aston Martin share price forecast is mind-blowing! 

If analysts are right, the Aston Aston Martin share price could absolutely rocket in the year ahead. Harvey Jones says…

Read more »

Investing Articles

As the S&P 500 drops, here are 2 Stocks and Shares ISA holdings I’m watching

Our writer has different views on how President Trump's tariffs might affect these two US holdings in his Stocks and…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

£10,000 invested in Tesla stock at Christmas is now worth…

Tesla stock has been one of best-performing investments of the past decade. But things haven't gone to plan for investors…

Read more »

Investing Articles

Up 279% in 5 years, could Meta stock keep soaring?

Meta stock has more than tripled in five years. This writer sees lots to like about the business but also…

Read more »

Pink 3D image of the numbers '2025' growing in size
Investing Articles

25% total return in a year? Is now the perfect time to buy BP shares?

BP shares are on the front line of today's global economic and political uncertainty but analysts think they can still…

Read more »

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

With Cash ISA changes coming, could now be the time to consider buying shares?

Changes to the Cash ISA could lead to greater investment in the stock market. This could be a good thing…

Read more »