The Motley Fool

Have £1k to invest today? I’d buy these FTSE 250 growth stocks in a Stocks and Shares ISA

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.

Image source: Getty Images.

While the FTSE 250’s performance in the last few years may have been somewhat disappointing, the mid-cap index continues to offer long-term growth potential.

In fact, its 2% annualised growth since 2015 could indicate that it is now undervalued relative to other major indices. That’s especially the case since it has a dividend yield of 3.2%, which is historically high for the index.

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...

With that in mind, here are two FTSE 250 shares that could be worth buying now within a Stocks and Shares ISA.

Hunting

International energy services company Hunting (LSE: HTG) released an encouraging trading update on Thursday for the first half of its financial year. It has traded in line with management expectations, with the US onshore completions market showing signs of improvement during the period. There have also been increased activity levels in the North Sea and Middle East, which suggests that improved operating and financial performance may be ahead.

The company expects to report a rise in revenue versus the same period of the previous year, with EBITDA (earnings before interest, tax, depreciation and amortisation) also due to be up on the comparable figure from the prior year.

Although the energy services industry faces an uncertain period, Hunting appears to have an improving outlook. The company is forecast to post a rise in earnings of 23% in the next financial year. Since it trades on a price-to-earnings growth (PEG) ratio of just 0.5, it seems to offer a wide margin of safety. As such, it could be worth buying on a long-term outlook, with there being the potential for volatility due to it being an uncertain period for the oil price.

Tullow Oil

A volatile oil price could also affect the financial prospects for Tullow Oil (LSE: TLW). The company’s recent operational update showed that it is making significant progress in Kenya as it prepares to reach a Final Investment Decision (FID). It is also expecting to commence its drilling campaign in Guyana later in the month, with the spud of the first of three wells planned for 2019.

It remains on track to produce between 90,000 and 98,000 barrels of oil per day (bopd) for the full year. It expects free cash flow to be $550m for the full year, which could help to reduce debt and strengthen its balance sheet.

Of course, should the oil price come under pressure, the company’s financial outlook is likely to suffer. However, at the present time, Tullow Oil is expected to report a rise in earnings of 9% in the next financial year. Since it trades on a PEG ratio of 1.2, it appears to be fairly priced.

As with all oil and gas companies, Tullow Oil is susceptible to a rapidly changing operating environment. But with strong recent performance and a low valuation, its risk/reward ratio could be enticing.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Peter Stephens 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.

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.