The Motley Fool

£5k to spend? A turnaround stock whose share price I think could explode in January!

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.

Buoyant risk appetite is running through financial markets following a turbulent start to 2020. The FTSE 100 is marching back through 7,600 points on signs of thawing relations between trade titans China and the US. The way things are going, it looks as if the 250-or-so points that the Footsie needs to rise to hit new record tops could be just around the corner.

Fuller, Smith & Turner (LSE: FSTA) might not be listed on Britain’s blue-chip index, though it’s one share I expect to also blast higher in the coming sessions. Not only could it gain on improving investor confidence, but the release of fresh trading numbers on January 30 could give it an added lift.

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...

Is the share price about to bounce?

Shares in the pubs operator have remained largely range-bound during the past six weeks, finally consolidating after the heavy weakness that took it away from September’s record peaks of £12.30 per share. I’d argue that such heavy selling was unjustified given that Britons’ spending on leisure and entertainment activities, unlike that on retail goods remains strong, and that this should be reflected in Fuller, Smith & Turner’s upcoming financials.

New trading details from one of its sector rivals have certainly raised my hopes of a sunny release at the end of January. Back on the January 10, Mitchells & Butlers announced that sales have strengthened in recent months, with like-for-like revenues rising 3.5% in the 14 weeks to January 4. And it really blew the doors off over the holiday season, with underlying sales jumping 5.6% over the three-week period and total sales hitting all-time peaks on the five main festive days.

Reassuringly expensive

Fuller, Smith & Turner is no stranger to releasing solid statements of its own either. In last month’s update, the small-cap said that like-for-like sales were up a solid-if-unspectacular 2.1% in the first 36 weeks of the current fiscal year, reinforcing the notion that individuals can always find money for a pint, whatever the political and economic landscape.

City analysts expect earnings to drop 9% in the current fiscal year (to March 2020), though this is due to rises in business rates and wage costs. In fact, the Square Mile remains quite bubbly over the company’s longer-term sales picture, helped by the publican’s busy acquisition that which saw it take over Cotswold Inns & Hotels in the autumn to boost its presence in the heart of England. They predict therefore that profits will rebound 13% in fiscal 2021.

Fuller, Smith & Turner isn’t exactly cheap, its forward P/E ratio of 20.2 times flying above the benchmark of 15 that’s widely considered decent value. Though in anticipation of some robust trading numbers next week, and thus the possibility of some serious share price gains, I think the stock remains a top buy even at current prices.

“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!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Fuller Smith & Turner. 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.