The Motley Fool

£5k to invest? I would buy these market-beating FTSE 250 growth champions

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Light bulb with jester hat perched on top
Image source: Getty Images

When high street baker Greggs (LSE: GRG) decided to launch a vegan sausage roll, I don’t think management realised how big of a success the new product would be. 

Today, the group announced a 14% increase in sales for the first seven weeks of its 2019 financial year thanks, in part, to consumers’ demand for the company’s flagship vegan product.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Like-for-like sales in company-managed shops rose 9.6% in the first few weeks of its financial year, with  total sales topped up by new store openings.  Unfortunately, this growth boost is already running out of steam. The firm noted in today’s release that the rate of sales growth has already eased slightly in February. 

Nevertheless, when you consider the fact that the rest of the high street is struggling, and analysts have been speculating for some time that Greggs’ growth has run its course, this expansion is extremely impressive and shows there’s plenty of life left in the business. That’s why I am recommending the company for your portfolio today.


Over the past decade, shares in Greggs have produced an average annualised return for investors of around 17%, that’s more than double the FTSE 250 average annual return over the same timeframe.

Some analysts had speculated that, after this considerable growth run, Greggs would struggle to repeat this performance. However, it seems the group still has plenty of tricks up its sleeve. City analysts had been expecting the enterprise to report earnings growth of less than 1% for 2018, and just 6.7% for 2019. But looking at today’s sales figures, it seems as if analysts will be going back to their spreadsheets over the next few weeks to rework their estimates, and there could be substantial revisions higher when the new projections are published.

With this being the case, I think it’s easy to justify the stock’s current valuation of 23.3 times forward earnings. Greggs isn’t a one trick pony. It’s shown over the past five years it can quickly adapt to changing consumer tastes, first with the introduction of new healthy products, and now with the vegan sausage roll. I think it’s worth paying a high valuation for such a unique and flexible business.


Another one-of-a-kind business that I think is worth paying a premium for today is Games Workshop (LSE: GAW). Several years ago, analysts were prepared to write off this producer of fantasy miniatures. There was no way the group could compete with the rise of mobile phone games and games consoles, analysts argued. 

As it turns out, the City was wrong about the business’s ability to reinvent itself and, over the past five years, the company has gone from strength to strength. Operating profit has nearly quadrupled since 2013 and investors have been well rewarded, with the stock up more than 500% since the end of February 2014.

I don’t see any reason why this trend is going to come to an end anytime soon. The company has a cash-rich balance sheet and generates an impressive operating margin of 33%, giving it plenty of firepower to invest in new products or reinvent itself, if needs be.

The stock is currently dealing at a forward P/E of 18.7, which seems appropriate considering the group’s impressive profit margins. There’s also a 3.8% dividend yield on offer.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Rupert Hargreaves owns no share 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.