Finding the best stocks to buy early on can deliver ginormous returns. Rolls-Royce shareholders have certainly learned this first-hand with the engineering giant skyrocketing 843% since December 2020.
However, while most investors have focused on this FTSE 100 success story, many have overlooked the explosive comeback FTSE 250 stock Lion Finance Group (LSE:BGEO) has delivered.
The Georgian and Armenian banking business has delivered a phenomenal performance for investors, climbing by 689% in the last five years. And those who reinvested dividends along the way have unlocked an even more staggering 920% total gain!
But is this stock still among some of the best shares to consider buying now?
Inspiring returns
Unlike other high-performing bank stocks, Lion Finance’s success isn’t as clear-cut as higher interest rates drive up profit margins. Instead, it’s a culmination of superb strategic decision-making by management.
In 2021, the business began making substantial investments into consolidating its retail banking, payments, and e-commerce solutions into a single fintech solution.
This digital banking transformation resulted in millions of additional customers joining its platform. And with the disruptions of the pandemic subsiding and Georgia’s GDP eventually rebounding, the group began aggressively expanding its loan book.
While this strategy added risk, continued diversification through its 2024 acquisition of Armenia’s largest bank (Ameriabank) added yet another million new clients, while simultaneously opening up more cross-border synergies.
Skip ahead to September, and Lion Finance’s net interest margin now stands at 6%, with a return on average equity at a staggering 27.9%. Suddenly, the stock’s near 10x return makes a lot of sense.
Can it continue to outperform?
With more financial benefits emerging from its Armenian banking takeover deal, there’s a lot to still be excited about. Even more so, considering both economies are expected to see even more growth next year at 5% and 6% respectively.
However, like all investments, there are some critical risks to consider, especially when it comes to the geopolitical landscape.
As previously mentioned, Lion Finance’s operations are concentrated in Georgia and Armenia. But both regions are dealing with political challenges, with Georgia undergoing a full political crisis over the 2024 parliamentary elections while border tensions between Armenia and Azerbaijan continue to persist.
Even without these headwinds, integrating the Ameriabank acquisition comes with its own set of execution challenges. And with Lion Finance’s latest earnings per share actually falling slightly short of expectations, cracks might be starting to emerge in the group’s impressive bull run.
The bottom line
Overall, it’s hard not to be impressed with this group’s phenomenal operational and financial performance over the last five years. And with strong economic growth forecasts for 2026, it’s possible that Lion Finance Group could still be a top stock to think about buying right now.
However, there’s no denying the geopolitical uncertainty surrounding operations. And this adds a lot of external risk for investors to consider very carefully.
