The HSBC (LSE:HSBA) share price has been rocketing higher over the past year. It’s up 75% over this period, and trades at 1,340p. If it keeps up this pace of growth, it could hit 2,000p by the end of the year, a further 50% higher than today. Even though some might think this is a rather punchy forecast, here’s why it might not be crazy.

Inflation and interest rates

One major driver that could justify such a rally is a sustained higher-for-longer interest rate environment. The global energy price shock that started in February is causing forecasters to expect global inflation to rise. We’ve already seen this start, as in the March US inflation news last week. This could prompt central banks around the world to raise interest rates this summer to counter inflation.

HSBC is more sensitive to global rates than peers such as Lloyds Banking Group because of its large deposit base and strong global presence. If rates increase, net interest margins expand, boosting profitability. The bank already delivered very strong earnings momentum in 2025, which was a key factor in the sharp share price surge. Therefore, it’s not unrealistic to think that rates moving higher due to inflation could continue to drive the stock further.

The net interest margin in 2025 was 1.59%, up 0.03% from the previous year. If, on average, global central banks increase base rates by 0.5%, the net interest margin for HSBC could tick back up to around 2%. In theory, this should boost net interest income by around 25%, which could act to directly increase profits by a similar amount. If earnings aside from net interest income rally as well, it’s not out of the question to see the share price mirror a 25% jump and then some more, given the speculation and excitement that would exist.

Valuation

Even with the jump in the past year, the price-to-earnings (P/E) ratio is 15.09, below the FTSE 100 average ratio of 17.6. Therefore, there’s scope to move higher even without a large boost to earnings as it’s not overvalued.

If we assume earnings per share don’t change, a move to 2,000p would push the P/E ratio to 22.64. This is by no means excessive. There are other financial services companies with a ratio like this. For example, M&G has a ratio of 23.64.

My point here is that the latest annual results showed that HSBC is doing well on various fronts, ranging from wealth management to expansion in Asia. So even if it just keeps the momentum going, the share price could continue to rise to 2,000p, as investors are happy to buy a stock that’s not overvalued.

The bottom line

Of course, hitting 2,000p by year end is a big statement. There are several reasons this might not happen. There’s geopolitical risk with China operations, especially if trade tensions with the US pick back up again. There’s the concern that high inflation could be bad for the bank if it leads to higher loan defaults. Finally, the company is still undergoing a restructure, so this might not go to plan, which would be a negative.

Ultimately though, I think the HSBC share price is primed to move higher this year, and am seriously thinking about investing.

The post Why I think the HSBC share price could hit 2,000p by December appeared first on The Motley Fool UK.

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HSBC Holdings is an advertising partner of Motley Fool Money. Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended HSBC Holdings, Lloyds Banking Group Plc, and M&g 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.

The average divdiend yield of the S&P 500 is 1.15%. This is significantly lower than the FTSE 100 and might put some people off. However, there are a lot more companies in the S&P 500. The yield can quickly ramp up by actively picking high-yielding options and dropping firms that don’t pay any income. Here’s how an investor could look to allocate money using this strategy!

Strategy steps

In a similar way to picking UK dividend stocks, my first action is to filter a list around my target yield. At the moment, I think a 6%-7% yield is strong for a portfolio, without having a crazy level of risk. Can I take this filter and find enough companies in the S&P 500? Absolutely.

There are currently 10 companies that meet this target yield. The stocks range in terms of sector and geographic exposure. This can act to diversify the portfolio, so that even if one company underperforms or cuts its divdiend, the overall impact is minimised.

The £10k lump sum could be invested all at once, or drip-fed over a few months. The advantage of doing everything at once is that the first dividend payment will come sooner than if £1k was invested in a stock each month. However, the advantage of the latter method is that it allows someone to take advantage of market opportunities that present themselves further down the line.

For now, let’s assume the £10k is deployed across the 10 stocks simultaneously. The exact yields will depend on when the trades are booked, but let’s estimate an overall yield of 6.5%. From there, dividends can be reinvested, helping compound the portfolio’s gains over time.

If this were kept up for 20 years, the person would be receiving just under £2,300 each year, even without having invested a penny more than the initial £10k! However, if someone wanted to speed up the process, they could allocate a further £250 a month after the £10k had been put to work. In this case, by year seven, the annual income payments would exceed £2.3k.

A pharma giant

Of course, predicting future dividend payments is tough. That’s why stocks that have a strong track record are appealing. For example, consider Pfizer (NYSE:PFE). The stock has a yield of 6.35%, with the share price up 23% in the past year.

Pfizer is one of the world’s largest pharmaceutical companies, focused on discovering and developing medicines and vaccines. When it comes to the dividend, Pfizer has long been a favourite among income investors. The company generates substantial free cash flow, even outside of pandemic-era peaks, which helps support dividend payments.

Looking ahead, the outlook should support income payments. It’s leaning heavily into growth areas like oncology and weight-loss treatments, which have a large, growing market to cater to. As new drugs move through late-stage trials and toward approval, there’s a steady pattern of potential revenue drivers.

Of course, there are still risks. Patent cliffs are a constant threat, which is when key drugs lose exclusivity. Revenue can drop sharply in these cases. However, I think it’s a US income stock for investors to consider as part of this strategy.

The post How to invest £10k in S&P 500 dividend stocks to target a £2.3k annual second income appeared first on The Motley Fool UK.

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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Recent market volatility has caused some stocks to decline in value. This has compounded the drop in some shares that were already struggling coming into 2026. One FTSE 250 company is now down 30% in the past six months, but people need to know the full story behind the cheap stock before making a decision. Here’s why.

Key details

I’m talking about Chrysalis Investments Limited (LSE:CHRY). Chrysalis is one of those investment trusts that sounds complicated at first glance, but the core idea is actually quite simple. It backs fast-growing, private companies before (and sometimes after) they hit the stock market. It has a good track record, with a portfolio that includes names like Starling Bank and Klarna.

To understand why I can say it’s cheap right now, we need to grasp the concept of net asset value (NAV). Chrysalis invests in high-growth firms at earlier stages, then hopes to realise gains when those businesses are revalued higher or go public. In practice, that means its NAV rises when portfolio companies perform well. Given that most of the assets are unlisted, it can be tricky to get an accurate NAV, but ultimately, the share price should track the NAV movements within a few percentage points.

Right now, the share price trades at almost half the NAV. That’s a huge discount. If those valuations prove accurate, there’s potential for that discount to really narrow as the share price appreciates. That’s why I can see why some feel it’s seriously undervalued at the moment.

Pause for thought

Last month, the company received almost unanimous shareholder support for a big shift in investment policy. The FTSE 250 stock has effectively admitted that its original growth strategy isn’t working as planned. It’s now shifting into a wind-down mode, meaning no new investments and a focus on selling existing holdings and returning cash over the next three years.

On the positive side, a successful disposal programme, especially if major assets like Starling or Klarna achieve good valuations, could see the share price surge over the next couple of years. Even though Klarna is now public, Chrysalis has retained the holding and will presumably sell it when it believes the time is best. But the risks are hard to ignore. Chrysalis is no longer growing, its future depends heavily on market conditions for asset sales. There’s also the risk around having to wind down efficiently in the coming years.

When I look to invest in a business, I want the outlook to be upbeat and positive. In this case, I already know the end goal. Sure, an investor could bank some solid returns over the next three years. But it doesn’t change the fact that this isn’t really a long-term investment. With that time horizon and the risks involved, I think I can find better and more sustainable stock picks in the market. Although some investors might be happy to take on the risk, it’s not one I’m willing to contemplate.

The post Down 30% in 6 months, I think there’s a big catch to this insanely cheap stock appeared first on The Motley Fool UK.

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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

The market turbulence from March is continuing in April so far. The conflict in Iran and the breakdown of recent peace talks mean the road ahead is likely paved with more volatility. Investors need to navigate this, but it doesn’t mean the best option is simply to hold cash. Rather, here are some FTSE 100 shares rallying even amid the recent disruption.

A stable utility

First we have BT Group (LSE:BT.A). The stock is up 17% in the past three months, and 30% over a broader one-year time horizon. The Q3 update from February suggested broadband competition is easing, with customer losses coming in lower than feared. At the same time, its full-fibre rollout continued at pace, now passing over 21m premises. Investors were impressed by the strong take-up growth, and this could keep helping the stock outperform later this year.

BT’s cash flow has also been improving. In volatile markets (especially amid geopolitical tensions), that kind of predictable, infrastructure-backed cash generation becomes very attractive. Telecoms aren’t flashy, but they’re essential. After all, people don’t cancel broadband in a crisis!

The stock is holding up very well, and I believe it could continue to do so as people will see it as a defensive play. In uncertain conditions, investors tend to allocate funds to these companies with stable demand and dividend potential. Its yield of 3.79% isn’t the highest in the index, but is above the FTSE 100 average.

One risk is regulatory scrutiny. This is always something investors are concerned about as they have the power to materially impact any growth plans by putting roadblocks in the way.

Engineering profits

The second company doing well is Weir Group (LSE:WEIR). It’s up 47% in the last year and has been rallying so far in 2026 as well.

Interestingly, the share price dropped in March following full-year results. This came due to a guidance tweak lower for this year and higher spending on a new company-wide IT system. Even though these could be seen as risks going forward, there were plenty of positives to take away from them. For example, revenue was up 2%, with adjusted profit before tax up 4%.

We also need to factor in the indirect benefits from the ongoing commodity boom. Remember, Weir is a global engineering company focused on providing high-performance technology and services to the mining industry. I believe key themes such as the electrification push and AI build-out will continue to keep commodity prices high. This should help smooth out any market volatility in the share price as people are aware of the long-term demand trend.

Even though some were disappointed by the recent guidance, the company is still expecting further growth and margin expansion in 2026. This is supported by various factors, including operational improvements and its push into higher-margin software offerings. This increasingly diversified set of revenue streams should further make it a reliable company that people would do well to investigate further.

Overall, I think both stocks could be considered for portfolios aiming to manage volatility as we face uncertain times ahead.

The post 2 FTSE 100 stocks that are navigating market volatility remarkably well appeared first on The Motley Fool UK.

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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended Weir 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.

The FTSE 250 average dividend yield is 3.4%. When I compare it to the base interest rate of 3.75%, that’s OK. However, more active stock selection can help an investor easily exceed the average dividend payments. In fact, it’s possible to aim for over 8% when building a passive income portfolio. Here’s one stock to consider.

Company details

I’m talking about MONY Group (LSE:MONY). The company has a dividend yield of 7.8%, and its share price is down 11% over the past year.

If you’ve ever compared car insurance or broadband deals online, chances are you’ve already used one of MONY Group’s platforms without even realising it. The company sits behind household names like MoneySuperMarket and MoneySavingExpert, acting as a middleman that connects consumers with financial providers. It earns referral fees when users switch products, operating a relatively simple business model.

In terms of the stock’s decline over the past year, the biggest culprit has been a slowdown in the insurance market. After a period of high premiums (which boosted switching activity and profits), prices have started to fall. This has reduced consumers’ incentive to shop around. Insurance is the largest revenue contributor for MONY Group (double the size of the next-largest segment), but revenue fell by £3m in 2025 compared with 2024.

Another risk going forward is ongoing fears that AI could bypass comparison sites. It could effectively replace the MONY Group site, though I think this concern is overblown.

The future

Before we get to the dividend discussion, let’s consider why I think the company’s overall outlook is positive. A big factor is the potential for a cyclical recovery. If inflation worries ease and UK interest rates fall later this year, consumer activity should pick up. Even without that external factor, structural growth should come from the continued traction that the ‘SuperSaveClub”’subscription model is getting.

This provides higher-margin recurring revenue and better customer lifetime value. Finally, the business is investing heavily in technology. This is primarily via investments in AI tools and platform improvements. This should enhance the user experience and reduce costs.

Now let’s get to the dividend forecast. The dividend per share has been ticking higher for the past few years. Over the past year, the total paid has been 12.63p. Analysts expect this to rise to 13.13p next year, then to 13.36p in 2028. If I assume the share price stays at 162p, this would translate to a yield of 8.24%.

Of course, the stock could rise or fall by then, meaning the actual yield could be higher or lower. But a move higher in the dividend, along with the potential for advances within the company, makes the stock look attractive right now. Investors who agree with my thinking could consider buying.

The post An 8%+ dividend yield forecast? This passive income gem is one to watch appeared first on The Motley Fool UK.

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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended Mony 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.

In the preliminary full-year results posted last month, Greggs (LSE:GRG) recorded a healthy 6.8% growth in total sales. It also remains the number one food-to-Go (FTG) brand for value. Yet the Greggs share price is down 9% over the past year and 41% over the past two years. There’s clearly a disconnect here, so why aren’t the shares going up in price?

Problems under the bonnet

Let’s dig deeper into the latest financial results. While sales are still growing, profits are heading in the opposite direction. Underlying profit before tax fell by 9.4%. Factors impacting this were rising wage costs, higher packaging expenses, and heavy investment in new distribution centres. These have acted to squeeze margins, and it’s a classic case of a firm growing but earning less, which rarely excites investors.

On a different angle, growth quality is under scrutiny. What I mean by this is that much of the revenue increase is coming from opening new stores rather than strong like-for-like demand. Smart investors have spotted this trend as well over the past year. That raises a red flag because it could indicate that we aren’t seeing genuine demand expansion. This is even more compelling when I look ahead, given we have a cautious UK consumer right now, still being hit by cost-of-living pressures.

Lastly, more subtle structural concerns are creeping in. Some have pointed to changing eating habits, potentially hitting demand for high-calorie snacks (like the Steak Bake). Combine that with even some odd elements, such as weather volatility, and it becomes more apparent why Greggs’ shares have been underperforming for some time.

The direction from here

I’m not saying that Greggs stock is going to keep falling for years to come. There are promising signs. Market share is increasing, which is a very good sign that consumers are switching from alternative providers and going to Greggs. A steady stream of new customers helps long term. Even though some might not agree with it, the expansion strategy of pushing for more stores and longer opening hours does provide it with a larger footprint, which ultimately could boost profits once costs settle down. In addition, cost pressures that hurt 2025 results are expected to ease, potentially allowing margins to recover later this year.

The current price-to-earnings ratio is 13.4, which is above my fair value benchmark of 10 and above the FTSE 250 average ratio of 9.7. From that angle, I don’t see any immediate catalyst for the stock to rise. If anything, my view is for the stock to tread water until investors become convinced that profitability can be improved. In the meantime, the risks remain though. On that basis, I don’t think it’s a compelling purchase for me at the moment, but I have the stock on my watchlist.

The post Why isn’t the Greggs share price going up? appeared first on The Motley Fool UK.

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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended Greggs 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.

Barclays (LSE:BARC) shares are down 10% since the start of the year. Yet the coming month promises even more volatility, with various factors that could materially impact the share price. Being forewarned is being forearmed, so here’s my rundown in order to get my ducks in a row.

Quarterly results

On 28 April we’ll get the Q1 results for the bank. The firm has been building momentum, with solid recent earnings growth and ambitious plans to return significant capital through dividends and buybacks.

It’ll be interesting to note if it sees further momentum coming from higher forecast net interest income due to changing interest rate expectations. Given the potential for higher inflation due to the energy shock, rising interest rates around the world to counterbalance the impact would likely help Barclays. To what extent is hard to say, but I imagine some commentary in the earnings report should touch on this.

The focus on the Middle East will also be apparent to see how the region is performing. Over the past year, Barclays has been aggressively expanding in the region. Back in October, it received a provisional licence for operating in Saudi Arabia. This paves the way for the bank to offer a wide range of services. CEO CS Venkatakrishnan said at the time that “we are well-positioned to help clients access capital, transform and grow in this dynamic market.” However, the upcoming results should show whether the conflict has changed this view and if operations in the region have been hampered.

Of course, the stock will react to the headline revenue and profit figures. But after the full report has been digested, a second movement in the stock will be even more important for the medium-term direction.

Energy prices

Oil prices surged above $100 per barrel last month due to the conflict in Iran. Analysts estimate that if it stays around this level for another month, we could start to feel a material inflationary impact.

Even though this is a positive for Barclays in some ways, it could start to be damaging. For example, it could push consumers to tighten their belts when it comes to spending. The price impact is already being felt at the petrol pump. And I’ve seen flight operators issue warnings of pending price hikes. If people cut back in the coming month, Barclays could face a hit to transactional spending fees.

I think we’ll be able to get a much better sense of any changes in spending habits in the coming month. If early evidence emerges of a weak consumer, it could be damaging for the FTSE 100 stock.

The bottom line

The uncertain geopolitical landscape makes it hard to predict how Barclays shares will react in the coming weeks. My gut tells me we could see the stock under short-term pressure due to the situation in Iran. Further, with the price up 71% over the past year, I think the earnings benchmark is high. Therefore, I’m going to hold off buying now and look to tactically purchase if we see any sharp move lower over the next month.

The post Why the next 4 weeks are going to be big for Barclays shares appeared first on The Motley Fool UK.

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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays 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.

A lot of UK investors still focus most of their time and attention on the FTSE 100 and FTSE 250. Yet, across the pond, the US can offer some interesting investment options.

Not everything is tech stocks that some dismiss as being overvalued. Rather, the Dow Jones contains some undervalued gems. Here’s one I don’t believe is on many radars.

The basics

I’m talking about Verizon Communications (NYSE:VZ). The stock’s up 15% over the past year, but I still don’t think it’s getting the attention it deserves.

Let’s rewind a little. Verizon’s one of the largest telecommunications companies in the world and provides the infrastructure that keeps people and businesses connected every day.

The company makes money in a few key ways. Postpaid wireless plans are a big area, but it has a growing broadband and internet business, along with a business and enterprise segment.

Operations are going well. The latest results from January showed 3.5m wireless retail postpaid phone additions, up 13% versus the previous year. Overall revenue grew 2%. For income investors, the 5.82% dividend yield has also acted as a powerful magnet, particularly in volatile markets where reliable income is prized.

Lacking attention

These are all positive signs, even before I get to the outlook. But I think the company has been overlooked for a few reasons. To begin with, it’s not a tech stock in the same way Apple or Amazon are. Therefore, I think some allocate cash to a small number of mega-cap tech shares to the detriment of Verizon.

Further, some feel utility companies (which Verizon can also be classified as) are boring. The mature and entrenched nature of the sector can mean some overlook the firms in the pursuit of high-growth names instead.

There’s also the case of the price-to-earnings ratio. At 10.41, it’s well below the 23.91 of the Dow Jones average. This is another sign it could be undervalued.

Why the stock could do well

Looking forward, the multi-year-high in wireless subscriber growth shows momentum is strong and should continue. We’re now in a position where high capex spend and 5G enhancements are finishing, which means more scope this year for debt reduction. The boosted cash flow could also be used for more dividends, further boosting the yield and attraacting more income hunters.

Verizon is also pushing a strategy of bundling mobile and home internet. This should act to increase customer stickiness and reduce churn, a further help for the stock.

In terms of risks, Verizon’s balance sheet is heavily leveraged, with debt levels still elevated after years of network investment. If it doesn’t bring this down as cash flow improves this year, it’s not a great look for new investors.

Even with this, I think it’s an attractive stock for UK investors to consider.

The post I think UK investors are missing out on this overlooked Dow Jones stock appeared first on The Motley Fool UK.

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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon and Apple. 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.

The geopolitical landscape is changing rapidly. The situation in the Middle East highlights that it is hard to keep up with the ongoing developments. Despite this, there are FTSE 100 shares that can be resilient in the current global environment, given their business operations. Here are two that are worth pointing out for investors looking for somewhere to shelter.

A consistent track record

First up is GSK (LSE:GSK). The global pharma giant is up 57% over the past year and 10% so far in 2026, despite recent market turmoil.

If the share price performance wasn’t enough to prove the company can do well even during volatile times, the business model should. It sells essential medicines and vaccines, so demand doesn’t fall during recessions or geopolitical shocks. Healthcare demand is structurally rising, primarily due to ageing populations the world over.

At the same time, it’s investing heavily in new products. Recent trading updates showed a strong pipeline in areas like HIV, oncology, respiratory and others. This should act to future-proof the company, as medical advances continue to play out.

From a valuation perspective, I don’t believe it’s overvalued. In fact, with a price-to-earnings ratio of 12.19, it’s well below the FTSE 100 average of 17.6. Therefore, it could be considered a value play along with its defensive attributes.

In terms of risks, it’ll always be at the mercy of the respective regulators around the world. If sentiment changes and certain drugs don’t get approved, it could present costly mistakes for the company.

UK-centric

Another firm to consider is J Sainsbury (LSE:SBRY). So far this year, the stock is up 3%, and up 48% over the past year. I’d argue that food retail is one of the most non-discretionary items for any consumer. No matter what happens with global wars or a struggling UK economy, people need to eat.

That puts supermarkets like Sainsbury’s in the same defensive bucket as GSK, but arguably even more so due to the frequent, habitual spending of foodstuffs. Further, Sainsbury’s revenue is overwhelmingly UK-based, with supply chains that are more localised than global industrial firms. So even though it may experience some supply chain disruption due to the conflicts, it is not as large as other sectors.

Importantly, the firm competes across price tiers (including things like Aldi price-matching strategies). It has its own strong-brand ranges, which offer higher profit margins than branded goods.

When I add it all together, I think the company could be considered by investors. Of course, the supermarket space is very competitive. It operates on low profit margins, meaning that only a relatively small cost increase can hurt the overall business. But even with this, I still think the outlook for the coming year is net positive.

The post 2 FTSE 100 shares that could outperform this year regardless of geopolitics appeared first on The Motley Fool UK.

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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended GSK and J Sainsbury 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.

The FTSE 250 endured a tough March, but is showing some signs in early April that the worst of the move lower could be over. As the dust starts to settle, some companies look attractive, but others are flashing warning signs for me.

Differentiating between the two is very important! Here’s one stock I think looks undervalued, but another I’m very cautious about.

Building on the future

Let’s start with the company I believe is undervalued: Travis Perkins (LSE:TPK). It’s down 18% in the past month, but up 11% over a broader one-year period.

The hit in the past month came mostly from the release of the company’s full-year results. It showed trading conditions remain subdued, with weak housing activity dragging on demand for building materials. Revenue dipped by 0.9% and adjusted operating profit fell 12.5%, and the group swung to a £97m loss after impairment charges and restructuring costs piled up.

Even though housing activity remains a risk going forward, I think this could just be a dip in the share price. For one, the balance sheet has improved dramatically. The firm has moved into a net cash position for the first time in decades, giving it resilience and flexibility. Free cash flow has also come in stronger than expected, which matters far more than accounting losses over the long run.

Further, we shouldn’t forget this is still a highly cyclical business. If the conflict in the Middle East ends and UK interest rates fall later this year, consumers should feel more confident, helping to boost the construction and housing markets. This should then translate to a meaningful rebound in volumes and investor sentiment.

Therefore, I see the stock as undervalued given where it could be trading by the end of the year, and feel investors could consider buying it.

No recovery signs yet

On the other hand, I’m continuing to stay away from recruitment firm Hays (LSE:HAS). A month ago, I wrote about the company, which was trading at the lowest level in decades. Yet I decided it wasn’t the right time to buy, which was a good call, as the stock’s down 17% over the last month. It’s down 59% in the last year.

Right now, the job market’s weak for Hayes. Economic uncertainty across Europe, particularly in key regions such as Germany and the UK, is dampening hiring activity. And when hiring slows, recruiters like Hays feel it almost immediately.

Yet it’s not just about waiting for a recovery in the labour market. Hays is struggling on other fronts, with news at the end of February that the CEO would be stepping down, alongside poor financial results. The company has even slashed its dividend by 84%, never a signal that things are going smoothly.

It’s true that Hays hasn’t lost its relevance. It remains one of the largest recruitment firms in Europe. It has a strong global footprint and deep relationships across industries. When hiring eventually recovers, I expect the stock to bounce back. However, from where I’m currently standing, I still believe there’s further room for the stock to fall before I want to buy.

The post 1 FTSE 250 stock I like and 1 I’ll avoid after the stock market correction appeared first on The Motley Fool UK.

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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.