The FTSE 100 started 2026 by breaking through the 10,000 level. But investors should already be thinking about the next milestone – and the stocks that will take it there.
Rolls-Royce has been one of the index’s top performers since the end of the pandemic. And I think I can see a stock that might have similar potential going forward.
Informa
One stock I have high expectations for is Informa (LSE:INF). The stock has been steady over the last 10 years, but the underlying business has been through a really interesting transition.
After a series of acquisitions, the company has grown into a global leader in the trade show and conference industry. And this is a business with extremely attractive unit economics.
Informa’s key assets are intangible – they’re things like trademarks, brands, and intellectual property. The important thing here is that they don’t need repairs, upgrades, or maintenance.
That means the company’s capital requirements are relatively low. As a result, it can use the majority of the cash it generates to support growth, pay dividends, or fund share buybacks.
A company in transition
Informa’s revenues have tripled over the last 10 years, but its earnings per share are largely unchanged. That’s not a positive sign, but there’s more to this than meets the eye.
The main reason for this is the fact that the company’s share count is much higher than it was a decade ago. Issuing shares to fund acquisitions is one cause of this, but there’s a bigger reason.
The Covid-19 pandemic caused severe disruption to Informa’s business. And while it’s (hopefully) unlikely to be repeated, the prospect of a global recession remains an ongoing risk for the firm.
Demand, however, has recovered sharply. As a result, the company is now bigger and stronger than it was 10 years ago and it’s started bringing its share count back down through buybacks.
The next Rolls-Royce?
Rolls-Royce has been the FTSE 100’s top-performing stock since the end of the pandemic. But I think that a lot of what has driven the company’s success also applies to Informa.
A strong recovery in travel demand led to higher cash flows. This allowed Rolls-Royce to bring down its debt and lower its share count, which caused profits to rise even further.
Informa looks to me like it’s in a similar position. Trade shows have recovered strongly and this could be the engine that drives some outstanding returns for investors over the next few years.
The two companies aren’t identical – and Tufan Erginbigiç has been a big part of Rolls-Royce’s success. But I think the stock market might be overlooking some important similarities.
Outlook
Informa has spent the last decade making moves to turn itself into a powerhouse in the trade show industry. But it isn’t yet showing up in the company’s earnings per share.
It won’t happen overnight, but I expect this to change in the next 10 years. And if it does, the share price could move a lot higher over the next 10 years.
That’s why I own the stock in my portfolio and why it’s on the list of shares I’m keeping an eye on at the moment. It’s not the most famous FTSE 100 name, but that doesn’t bother me at all.
