Fool readers are likely excited to take in the first few weeks of summer. Hopefully, you have formed and followed good habits in 2019. Some of you may be pleased to find out you have saved £2,000 or more just in time for the sunny season!
It is tempting to spend that extra dough on recreational activities or a luxury item or two. Instead, let’s direct that summer enthusiasm to our portfolios. Today I want to look at three stocks on the FTSE 250 that have rewarded investors handsomely in recent years. This is the best way to treat yourself this summer!
Remember those recreational activities you were considering? JD Wetherspoon (LSE: JDW) is a company that prides itself on a popular and thirst-quenching recreation. Shares have jumped 40% over the past two years but the stock still boasts a solid price-to-earnings (P/E) ratio of 18 at the time of writing.
JD Wetherspoon has thrived under the leadership of its hands-on founder and chairman, Timothy Martin. Martin routinely visits over a dozen Wetherspoon pub outlets per week. This meticulous approach has contributed to impressive sales and earnings growth over the last half decade. He has predicted that a no-deal Brexit would provide a boon for business in the form of lower prices.
I am bullish on JD Wetherspoon going forward. In addition to its favourable P/E, the stock fell out of technically overbought territory as of close on June 25. An unseasonably warm summer season is in the forecast and should provide another boost to Wetherspoon’s pub traffic.
Games Workshop (LSE: GAW) deals in recreational activities that don’t carry a summer appeal. This should not deter Foolish investors.
The miniature wargaming manufacturing company has achieved remarkable sales and earnings growth in recent years. Rain or shine, this is a stock and company that is thriving on the back of a massive spike in interest for tabletop games. Don’t come away thinking this is some strange fad or passing trend!
Tabletop games are filling a void that was thought to be left abandoned due to the rise of digital media. Indeed, it is the craving for niche products that offer social interaction and a physical experience that is driving this trend. What Foolish investors lose in mass appeal, they are gaining in betting on a fiercely passionate and still-growing user base.
HomeServe (LSE: HSV) provides emergency, repair, and heating installation services to its broad range of customers. If you are like me and you can barely change a lightbulb, straight-to-home trade services are a godsend.
HomeServe has achieved solid growth providing services to anti-handymen like myself. Its Membership business in North America has performed very well while the company has achieved a solid group retention rate of 82% across all geographies. Revenue to March 2019 rose to a record $1 billion. Solid growth spurred the company to announce a dividend increase of 12%, which represents a 1.8% yield at the time of writing. HomeServe carries even more appeal as it moves into the lucrative North American home warranty market.
HomeServe’s P/E sat at a pricey 36 as of this writing. Shares have dropped out of technically overbought territory in June, which should inspire investors to think about an entry point this summer.
Ambrose has no position in any of the shares mentioned. The Motley Fool UK has recommended Homeserve. 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.