Like Warren Buffett, I love to buy quality stocks when they’re trading below value. Here are two top FTSE 250 stocks I think demand serious attention at today’s prices.
Breedon
There are many metrics investors can use to gauge value. But based on expected earnings, I feel building materials supplier Breedon (LSE:BREE) could be a brilliant bargain.
Okay, its price-to-earnings (P/E) ratio of 13.3 times isn’t much to write home about. However, the expected 23% bottom-line jump for 2025 also leaves it on a P/E-to-growth (PEG) ratio of 0.5.
Any reading below one implies that a share is undervalued.
Breedon operates a vast network of plants and quarries, giving it 1.4bn tonnes of reserves (almost 50 years of supply) in categories like aggregates and asphalt. This has been achieved through a steady stream of acquisitions that leave it positioned to exploit long-term growth opportunities like a new housebuilding boom and infrastructure renewals.
It’s true that acquisition-based growth strategies also create significant risks. Shareholder value can be eroded if revenues from new units disappoint or cost synergies fail to deliver.
Yet Breedon’s long record of success here helps soothe any concern I may have. Underlying earnings have increased at a compound annual growth rate of 24% since 2011.
I also like the company’s decision to make acquisitions in the US in recent years. Its acquisition of BMC Enterprises in March 2024 and Lionmark a year later (for $300m and $238m, respectively) reduces the company’s dependence on the UK and Ireland. And the Stateside market also offers substantial growth opportunities in the near term and beyond.
Lion Finance
Like HSBC and Standard Chartered, Lion Finance (LSE:BGEO) has considerable growth potential thanks to its focus on emerging markets. For this FTSE 250 operator, that means tapping into surging demand for financial services in Georgia.
Lion’s adjusted pre-tax profits have grown at an annual average rate of 43.8% over the last five years. In that time, the number of monthly active customers has risen from 1.3m to 2.4m.
The stock — which traded under the name Bank of Georgia until February — is thriving thanks to a blend of historically low product penetration and strong economic growth. This is tipped to continue: for 2025 and 2026, the European Bank for Reconstruction and Development (EBRD) is forecasting Georgian GDP growth of 6% and 5%, respectively.
As an added bonus, Lion Finance faces significantly less pressure than other UK-listed banks in other markets, giving it additional scope to grow earnings. Along with TBC Bank, the company controls around three-quarters of Georgia’s banking industry.
I don’t believe the bank’s considerable profits potential is reflected in its cheap share price. Today it trades on a P/E ratio of just 5 times for 2025.
On top of this, it trades on a corresponding PEG multiple of 0.5.
Earnings could come under pressure if Georgia’s economy encounters unexpected turbulence. But over the long term I expect it to deliver excellent returns.
