The FTSE 250 gets 5 new stocks this month! Should I get in early?

Mark Hartley weighs up the pros and cons of investing in these new-to-the-index stocks before they get hurled into the FTSE 250 limelight.

| 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.

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.

Thoughtful man using his phone while riding on a train and looking through the window

Image source: Getty Images

FTSE Russell, the company that manages the FTSE indices, has announced a list of five new shares to join the FTSE 250 this month. These regular reshuffles can catapult an otherwise unknown company into the spotlight, leading to lucrative gains.

So should I take this opportunity to dive in before they hit the big time? I decided to take a closer look.

What’s changing?

Stocks being upgraded to the index include GB Group (LSE: GBG), Pan African Resources, Princes Group and Shawbrook Group. WPP will also join the index after being demoted from the FTSE 100.

British Land will be upgraded from the FTSE 250 to the FTSE 100. Meanwhile, European Opportunities Trust, Foresight Solar Fund, PayPoint and Pinewood Technologies Group will drop from the mid-cap index.

All this will happen pre-Christmas (22 December). But which stocks are worth considering?

Since WPP’s being demoted, that clearly isn’t a top choice. The canned goods and drink company Princes Group is well-known but not exactly exciting, and Shawbrook Group’s a newly-listed challenger bank with little history to speak of.

GB Group, however, looks like an interesting up-and-comer. It provides identity data intelligence products, which sounds like a business with growth potential. Similarly, gold miner Pan African Resources is already up 210% this year and doesn’t look like it’s slowing.

Those two piqued my interest.

Diversified investments

Both Pan African Resources and GB Group present contrasting investment propositions ahead of their FTSE 250 inclusion. While the former offers dividend-driven value in gold mining, the latter represents a growth-stage software-as-a-service play, each carrying distinct risk profiles suited to different portfolio objectives.

This means they could appeal separately to individual investment styles, or add diversification to a single portfolio.

Pan African’s case is fairly simple — so long as the price of gold continues to rise, so will its profits. Able to process gold at an all-in cost below $1,000 per ounce, anything above this is profit. With gold currently trading at around $4,000 an ounce, future cash flow visibility is excellent.

Of course, if the price of gold dips, the share price will likely follow suit.

GB Group presents a more complex investment case. The company provides identity intelligence and fraud prevention solutions across financial services, e-commerce, and gaming verticals, serving over 10,000 clients globally. 

Its growth credentials are clear: recurring subscription revenues, high gross margins and 97.8% net revenue retention. In its full-year 2025 results, revenue reached £283m, with adjusted operating profit at £67m and earnings per share up 14%.

But the identity verification market faces evolving cybersecurity threats, including KYC document fraud schemes and deepfake attacks. Such failures can be financially and reputationally devastating, requiring continuous technology investment to stay ahead of threats.

My verdict

I think both these stocks are worth considering, particularly GB Group. Aside from its growth prospects, it also has a 1.77% dividend yield and recently extended its share buyback programme by £10m.

But don’t just take my word for it — analysts following the stock expect growth of 50% on average in the next 12 months. Overall, it sounds like a compelling opportunity, so I plan to buy the shares before the listing date.

Mark Hartley has no position in any of the shares mentioned. The Motley Fool UK has recommended Foresight Solar Fund and Pinewood Technologies Group Plc. 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.

More on Investing Articles

Mature black woman at home texting on her cell phone while sitting on the couch
Investing Articles

Want a £1m Stocks and Shares ISA? Step 1 starts before 5 April

Dr James Fox explains why the Stocks and Shares ISA is an incredible vehicle, and why investors may want to…

Read more »

Happy woman commuting on a train and checking her mobile phone while using headphones
Investing Articles

2 dirt-cheap stocks to consider buying for an ISA portfolio in April

This pair of UK shares are down by double digits in recent months. Ben McPoland sees both as stocks to…

Read more »

Front view photo of a woman using digital tablet in London
Growth Shares

I think this undervalued penny stock has serious potential to outperform

Jon Smith points out a penny stock that's started to rise as the company pushes ahead with a transformation that…

Read more »

Close-up of children holding a planet at the beach
Investing Articles

2 dividend-paying investment trusts to consider for a Stocks and Shares ISA

These two London-listed funds source their dividends globally, offering income investors diversification inside an ISA portfolio.

Read more »

Businesswoman calculating finances in an office
Investing Articles

Waiting for a stock market crash? This FTSE 100 superstar just fell 19% in a day

A stock market crash can be a great time to buy shares. But one of the FTSE 100’s leading lights…

Read more »

Road trip. Father and son travelling together by car
Investing Articles

Rolls-Royce shares down 19%. Why is this major broker still as bullish as ever?

Our writer looks into the long-term investment case for Rolls-Royce shares after a 19% dip, and finds at least one…

Read more »

DIVIDEND YIELD text written on a notebook with chart
Investing Articles

9% yield! But a cut’s coming for 1 of the UK’s most reliable dividend stocks

While other housebuilding stocks have had big dividend cuts in recent years, Taylor Wimpey's been incredibly resilient. But that's set…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

Stock market crash? 1 Nasdaq share I’m keeping an eye on

With the stock market taking the elevator down recently, out writer has his eye on a company hoping to compete…

Read more »