One thing I like about the FTSE 250 is its focus on ‘everyday economy’ UK businesses, rather than the big global giants in the FTSE 100. Over the long term, UK mid‑caps have actually delivered higher total returns than large-caps, thanks to faster growth and more takeovers.
So why isn’t everybody buying mid-cap stocks?
Over the last few years, domestic shares have fallen out of favour as investors worried about UK politics, inflation and interest rates.
Now, the mid-cap index looks unusually cheap, even though many of the businesses in it are still making solid profits and growing. For long‑term investors with a 10-20 year view, that mismatch between prices and earnings can be a real opportunity.
For those hunting quality stocks at a low price, I think Currys (LSE: CURY) and Future (LSE: FUTR) are two I think are worth considering right now.
A beaten‑down retailer on a low multiple
Currys is a familiar high street electronics retailer, selling everything from TVs and laptops to fridges and washing machines. It’s had a few tough years, with supply chain issues, squeezed consumers and intense competition. Subsequently, its valuation’s dropped to a level where the market’s pricing it quite pessimistically.
With a forward price-to-earnings (P/E) ratio under 10, it’s well below many global retail peers. More so, its enterprise value to EBITDA (EV/EBITDA) ratio’s 4.2, a level often associated with recovery situations rather than growth stories. Plus, its price‑to‑book (P/B) ratio sits well below 1, meaning the market value’s lower than the accounting value of its net assets.
But that doesn’t mean it’s a no-brainer buy. With roughly £899m of debt versus £287m of cash, it lacks a significant short-term financial buffer. Debt‑to‑EBITDA above 2 also tells you there’s some leverage risk if trading worsens.
Basically, it’s cheap because the market’s worried about retail challenges, competition and debt. But if it can stabilise profits and gradually reduce leverage, the current valuation makes it highly attractive and worth further research.
The digital media stock on a single‑digit P/E
Future’s a digital media and magazine publisher that owns specialist brands and websites across tech, gaming and hobbies. It makes its money from advertising, e‑commerce links and subscriptions. The business benefited massively from the pandemic shift online but has since seen its share price fall as growth normalised and digital advertising became more volatile.
The balance sheet looks acceptable for now but it still faces significant risk from its cyclical exposure to advertising revenue. AI‘s hurt digital ad revenues and may continue to do so, so investors should keep an eye on developments in this area.
Even so, the current numbers show a business that is still profitable and cash‑generative. Its adjusted earnings per share (EPS) for the 2025 financial year is around 123p, with strong free‑cash‑flow conversion of about £114m.
On recent prices, that gives the stock a forward P/E of around 4 — extremely low for a digital platform business. With an EV/EBITDA of roughly 4–5 and EV/FCF near 7, the whole business looks to be valued at only a fraction of its earnings and cash flow.
It’s one stock I’ll be eyeing closely, with an aim to buy if AI’s negative impact on advertising improves.
