Premium content from Motley Fool Hidden Winners UK
Our monthly Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of small-cap recommendations, to help Fools build out their stock portfolios.
“Best Buys Now” Pick #1:
Bloomsbury Publishing (LSE:BMY)
Why we like it: “Bloomsbury’s (LSE: BMY) best known for being the publisher of the Harry Potter series of books in the UK. The books continue to be bestsellers some 26 years after the boy wizard’s first appearance. Much like share investors hoping to spot the next Microsoft before anyone else, the same is true in publishing where taking a risk on an unknown talent can pay enormous dividends in the long run. The company appears to have unearthed another gem in fantasy author Sarah J. Maas, whose latest book, House of Flame and Shadow, helped the company perform far ahead of analysts’ expectations.
“The success of House of Flame and Shadow has driven demand for the author’s previous 15 books published by Bloomsbury as readers want to buy the whole set to be up to date. Bloomsbury says fantasy has grown in popularity around the world – with the sci-fi and fantasy genre growing by 54% in the last five years, according to Nielsen Bookscan. While there’s likely to be an element of feast and famine with consumer sales, as audience’s tastes are unpredictable, investors can be given comfort by the further six books Bloomsbury has under contract with Sarah J Maas, which seem likely to sell well.”
Why we like it now: Bloomsbury Publishing offers a compelling mix of growth and resilience. Blockbuster authors like Sarah J. Maas and J.K. Rowling continue to drive strong consumer sales, with recent and upcoming releases topping bestseller charts. The integration of Rowman & Littlefield’s academic business — the company’s largest acquisition — expands its high-margin, recurring digital revenue base, with 5,300+ titles already digitised. Consensus forecasts remain robust, with FY25 pre-tax profit projected at £41.6m on £335.9m revenue. Supported by its diversified “portfolio of portfolios” strategy and the long-term Bloomsbury 2030 vision, BMY is well-positioned to deliver sustained earnings growth and shareholder value.
