The ride’s bumpy but the FTSE 250’s ascent from recent seven-year lows continues. More volatility could be well around the corner, but so what? I’d argue that recent stock market slumps provide an opportunity for investors to get rich and retire early.
For long-term investors with sound investment strategies, any additional share market shakes will be unnoticeable once they finally sit down and calculate their returns. And I believe that plenty of FTSE 250 companies look far too cheap to miss at current prices.
One FTSE 250 bargain
Take Greencore Group (LSE: GNC) for example. Recent news flow, as expected, hasn’t been encouraging as lockdown measures have smacked demand for its food-to-go categories. It’s been forced to scrap the dividend and postpone some capital expenditure plans as a consequence. I retain my view that the food producer remains a great share to hold in your portfolio over the next decade at least though.
Studies show the food-on-the-move segment is one of the fastest growing sub-sectors out there. The Covid-19 outbreak will have pushed industry forecasts off course. But estimates from IGD made prior to the pandemic underlines the exciting revenues outlook for Greencore in the coming years. It predicted the food-to-go market would grow by almost a quarter in value in the five years to 2024.
Following recent share price weakness this FTSE 250 stock trades on a forward price-to-earnings (P/E) multiple below 12 times. This makes it too good to ignore, in my opinion.
Now Tritax Big Box (LSE: BBOX) doesn’t offer the sort of jaw-dropping value on paper as Greencore. For 2020, this FTSE 250 stock and operator of big-box logistics and warehousing spaces trades on a P/E multiple of 19.5 times. However, this is a decent price when you consider the company’s exceptional long-term profits outlook.
The coronavirus outbreak has affected its cash flows more recently. This wasn’t surprising as its customers have furloughed staff in response to government advice and have thus struggled to pay rents. Forget about these current problems, I say. If anything, the Covid-19 crisis has underlined the importance of e-commerce for retailers and FMCG manufacturers. Demand for the sort of mammoth facilities offered by Tritax is only going to improve in the aftermath of the pandemic.
This FTSE 250 share has already benefitted from the shortage of big-box sites in development. The shortfall threatens to persist as the online shopping phenomenon gets stronger and stronger. So think about buying Tritax on its brilliant profits outlook through the 2020s and likely beyond too.
Oh, and one final thing. At current prices around 125p per share, the business carries a giant 5.1% forward dividend yield. It’s a reading that takes the edge off that meaty earnings multiple and underlines my belief Tritax is a firm that could help you get seriously rich.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Greencore. The Motley Fool UK has recommended Tritax Big Box REIT. 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.