Never mind DeepSeek – we all know what the big news is in the world of growth stocks this week. It’s that the UK’s planning to upgrade the A428 between Cambridge and Milton Keynes.
More seriously, there’s quite a bit to the chancellor’s latest spending plan for investors to take note of. And this could be big news for a couple of UK shares that investors might ordinarily overlook.
FW Thorpe
FW Thorpe (LSE:TFW) provides industrial lighting systems. And while this sounds about as exciting as a lecture on the history of tax law, there’s actually quite a bit to catch the attention of smart investors.
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The firm focuses on areas where requirements are technically complicated or specific. This creates a barrier to entry for competitors and allows the business to maintain some strong operating margins.
Emergency lighting’s one example. Whether it’s an expansion at Heathrow Airport or the building of a new cancer hospital in Cambridge, this is more complicated than screwing in some energy-efficient bulbs.
Emergency systems need to be able to deploy instantly in the event of a power failure and stay on for a certain amount of time. And FW Thorpe has the technical expertise to provide this.
One of the risks with this business is that it depends on continued investment into UK industry. Whether it comes from the government or the private sector doesn’t matter – but it can’t be guaranteed.
Sales growth has stalled in the last year or so and the stock’s fallen almost 20%. But this could pick up as the chancellor’s investments take shape and I think the stock’s well worth a look for investors.
James Halstead
The idea behind James Halstead‘s (LSE:JHD) similar. The company manufactures and distributes commercial flooring, which also sounds as exciting as reading a 500-page photocopier manual.
Again though, the firm focuses on specialist products that go into environments that have specific requirements. Hospitals, for example, can’t just stick down some bathroom vinyl and be done with it.
James Halstead has a product that can be welded at the seams to create a completely sealed surface. This prevents bacterial growth and meets the demanding hygiene standards hospitals maintain.
Equally, airport floors need something a bit tougher than the average lino. And the company’s developed flooring that can deal with high foot traffic, rolling luggage, and constant cleaning.
Along with shifting construction output, the firm’s reliance on PVC as a raw material makes it vulnerable to rising oil prices pushing up costs. That’s a risk investors need to seriously consider.
Despite this, James Halstead’s closing in on 50 years of consecutive dividend growth. And with a current yield of almost 5%, I think it could be one for passive income investors to consider.
Boring’s beautiful
On the excitement scale, emergency lighting and non-slip floors are so far behind artificial intelligence (AI) and anti-obesity drugs that it’s not even funny. But investors shouldn’t overlook these boring stocks.
FW Thorpe and James Halstead have strong competitive positions that are difficult to disrupt. And I think the chancellor’s plans for investing in the UK could give them both a boost.
