Looking for the best FTSE 250 shares to buy next month? Here are two momentum heroes to consider that I think could keep on flying.
The miner
Rocketing prices for precious metals have driven Hochschild Mining (LSE:HOC) shares 119% higher over the past year. I think there could be further to go.
Bullion prices are soaring to new highs near $3,000 per ounce, as inflationary risks and geopolitical tensions increase. These threats could linger as tension over US protectionism and defence policy in Europe worsen.
Investing in mining shares like Hochschild is still a risky endeavour despite this encouraging picture. Commodities markets are famously volatile, and a sudden change in market sentiment could instead pull precious metals sharply lower.
The business of metals extraction can also be highly unpredictable. Earnings-sapping problems at the exploration, mine development and production stages can be commonplace.
Just last month, Hochschild warned of higher-than-forecast costs due to inflationary pressures. News of this pulled its share price sharply lower in January, and it’s down around 12% in the year to date.
I’d argue that, on balance, the outlook remains pretty bright for Hochschild and its share price. And I don’t believe this is baked into the current share price of 195.2p.
Today, the gold and silver miner trades on a forward price-to-earnings (P/E) ratio of 6 times. It also deals on a price-to-earnings growth (PEG) ratio of 0.1. Any reading below 1 implies that a share is undervalued.
Hochschild’s shares are recovering following last month’s shock. They’re up 3% in the past month, and I think they could continue rising strongly, helped by the company’s rock-bottom valuation.
The defence contractor
Babcock International (LSE:BAB) shares have experienced no such turbulence at the start of 2025. They’re up 30% in the year to date in fact, meaning the defence share’s up more than a third over the past 12 months.
Could it have further to run? I think so, fuelled by ongoing conflict in Ukraine and signs of wavering from the US for its NATO colleagues. It’s a mix analysts think will boost European arms spending by hundreds of billions of pounds.
Babcock’s strong relationships with NATO members France, Canada, Australia and the UK mean it’s likely to see strong and sustained demand for its services.
Sales here were up 11% year on year in the six months to September. And last month the firm said strong demand had continued during the third quarter and into January, leading it to upgrade profits forecasts for the full year.
Babcock’s valuation has risen sharply in 2025. Yet with a forward P/E ratio of 14.4 times, it still trades at a healthy discount to the broader UK defence sector. BAE Systems‘ shares, for instance, now command a P/E ratio of just below 18 times. On top of this, the firm’s PEG ratio sits at a bargain basement 0.3.
Soaring sector demand leaves Babcock vulnerable to potential supply chain issues. But on balance, I still believe the FTSE 250 firm’s a top stock to consider right now.
