The FTSE 250 is home to a long list of UK companies that have outperformed in the last 12 months. Yet few come even close to the explosive 241% gain that Goodwin (LSE:GDWN) shares have delivered.
Despite these stellar returns, most investors have never heard of this under-the-radar business. What’s more, there’s currently no coverage from institutional analysts either.
So what exactly does this business do? Why has the stock suddenly exploded, and is it too late for investors to consider buying?
A hidden gem
Let’s start with a quick introduction. Goodwin’s a specialist engineering business that manufactures high-integrity steel castings as well as metallurgical powders used in high-temperature industrial processes. Its niche focus makes it easy to overlook.
But in October 2025, management widened its horizons. After years of positioning itself as a preferred incumbent supplier for naval defence programmes, management gradually secured a series of lucrative defence contracts. This includes deals to supply components for the US and Royal Navy for nuclear submarines, destroyers, frigates, and aircraft carries.
The combined impact of these deals is game-changing. And the company announced pre-tax profits for fiscal 2026 (ending in April) are now expected to reach at least £71m, representing a minimum 100% jump in year on year earnings.
This isn’t just a one-time gain either. The company’s now embedded in multi-decade contracts with some spanning into the 2040s and even 2060s, giving Goodwin an unprecedented level of long-term revenue visibility that other industrial companies can only dream of.
The subsequent pricing power that comes with its preferred supplier status has boosted the firm’s return on equity to an industry-leading 35%. And when combining rapid growth with exceptional shareholder value creation, it’s no wonder this FTSE 250 stock has skyrocketed.
What could go wrong?
As a business, Goodwin looks borderline flawless. Even the balance sheet is in tip-top shape. But like all investments, buying shares today still comes with risk.
After such a stellar surge in its share price, the engineering specialist trades at a pretty lofty premium of 45 times earnings. That’s not entirely unjustified, given the secure nature of its future cash flows. Nevertheless, it opens the door to significant volatility. And this is at risk of being massively amplified due to its ownership structure.
A big reason why institutional investors have ignored this business is that there are very few shares available to buy. The Goodwin family owns close to 54% of the business either directly or indirectly through a private holding company. And with only 2.7 million shares out of 7.5 million available for trading, liquidity is extremely thin.
Put simply, even a modest amount of selling pressure could trigger violent price movements. And if the controlling Goodwin family start making questionable strategic decisions, a lot of the recent share price gains could quickly disappear.
The bottom line
Goodwin’s ownership structure makes it exceptionally difficult for institutional investors to build meaningful positions. Luckily for retail investors, that’s a problem they don’t have. And while the lack of coverage certainly makes due diligence harder, it also means fewer investors are paying attention to a genuinely exceptional FTSE 250 business.
That’s why, despite the risks, I’m taking a much closer look at this enterprise.
