To us investors, it is a timely reminder that there is value to be found amid British assets. Even as bonds are discarded faster than the trash that Biffa deals with.

However, should I buy Biffa during its finest hour? Alternatively, perhaps wait for its price to settle into the dependable banality of its service? Or simply give it a pass?

The giddy share-price rise came as Biffa was acquired for a handsome sum of £1.1bn. Albeit, that’s £300m less than the £1.4bn that was mooted in June. This reduction has been attributed to the weakness of sterling in relation to the jacked US dollar and the economic chaos wrought by U-turns made by the British government recently.

Overvalued?

That the takeover was the cause for the soaring share price rather than strong performance data, for instance, suggests to me that the rise will not be repeated tomorrow or any time soon.  Buying now would be acquiring an asset at the crest of a breaking wave driven by human hype rather than giddy business performance, in my opinion.  That rules out purchasing immediately, lest the swell of optimism that propelled it quickly plummets.

The choice for me then, Fools, is whether to buy the company’s shares in the immediate future or pass. 

The long-term vision of ECP (Energy Capital Partners), which bought Biffa, is compelling.  It believes that patient, sustained investment will enable Biffa to thrive in its key markets of waste collection and sustainable disposal.  It is certainly aided by the UK government’s target to increase plastic recycling and eliminate avoidable waste. Future initiatives to do so will likely play into the hands, or wallets, of Biffa shareholders. This is especially true given its entrenched position. It operates from 195 locations nationwide and servicing a diverse range of industries, from construction to retail. 

However, an immediate threat is the wider economic picture of inflation and labour unrest. Biffa is vulnerable to workers striking to prevent their pay being eroded by inflation. Particularly so as their discontent will quickly result in piles of trash on our streets. The subsequent PR crisis would leave Biffa investors sweating, I’d suggest.

My future approach to Biffa shares

Overall, the long-term prospects of this company enable me to gaze beyond the immediate economic gloom and envision an asset that will reliably appreciate.  I’d contemplate buying its shares, but not right now.

The post Up 22%, should I buy Biffa shares now, wait or pass? appeared first on The Motley Fool UK.

Biffa

Biffa (LSE:BIFF) is a UK-based waste management business that also incorporates recycling operations.

The big news is that Biffa received a £1.36bn takeover offer yesterday. This equates to around 445p per share. With the stock currently trading at 414p, it could well still be trading at a discount.

In a recent trading update for the first 11 months of the 2022 fiscal year, the company reported that revenue had jumped by around one-third, year on year. With results due on 28 June, I will be watching very closely for improvements in both revenue and profit.

Last November, however, investment bank Peel Hunt downgraded the firm to ‘hold’ because of decreasing footfall in one of Biffa’s recent acquisitions, Company Shop Group. As a potential investor, I hope that this segment begins to see greater interest as the world opens up following the pandemic.

Fresnillo

Fresnillo (LSE:FRES) is a Mexico-based silver mining business. It currently trades at 777p. For 2021, the company reported an increase of around 11% in pre-tax profits. This amounted to just over $600m.

Furthermore, revenue also grew by around 11%. Much of this has been caused by the perceived tightening supply of metals following the war in Ukraine. In addition, market volatility has led investors to seek the ‘safe haven’ of precious metals.

The result is that the value of the silver Fresnillo is producing has surged in value. This translates into a higher share price for the company. Given the protracted nature of the conflict in Ukraine, I think this metal trend will continue.

It is possible, however, that any resurgence in the pandemic could grind mining operations to a halt.

Lloyds

Lloyds (LSE:LLOY) is a UK-based banking business. Its products include loans and mortgages. It currently trades at 45.68p at the time of writing.

The Bank of England has already increased interest rates to 1% and further hikes are expected. 

Interest rates are important because they largely dictate how much a bank like Lloyds can charge for its services. 

Given that rates are probably going to rise in the future, it seems that the company could benefit.

There is also little evidence yet that the housing market is slowing as many housebuilders, like Taylor Wimpey and Persimmon, say that demand is still strong. This could be positive for the bank’s mortgage segment.

There is the risk, however, that inflation and rising energy costs deter potential customers from taking out loans and mortgages. This could be bad news for Lloyds.

Overall, the current market conditions appear to suggest that these three firms may be good purchases at the moment. To that end, I think I will buy shares in all three businesses soon.     

The post Here are my three best stocks to buy now! appeared first on The Motley Fool UK.

SSE

The former Scottish and Southern Energy has been in the power generation game for generations. Now known as SSE (LSE: SSE), the company is a FTSE 100 member and has been expanding its renewable energy footprint in recent years.

From an investing perspective, I do not see that shift as wholly positive. The company cut its dividend by 18% in 2020. I took that as recognition that it was moving from areas with proven strong profitability into ones where the economic returns are less compelling, such as windfarms.

There are also extensive capital expenditure costs in setting up energy infrastructure and those can eat into profits. Indeed, at the interim stage, SSE’s investment and capex costs for the current year soared 140% to top £1bn. Still, with an established, profitable business and a 5% yield, I see SSE as a lower risk pick among green energy shares I could hold in my portfolio compared to some newer companies without a proven customer base or profitability model.

Biffa

To many people, the name Biffa (LSE: BIF) may be more associated with the sides of rubbish carts than energy. But in fact, some of the rubbish the waste management company collects is then used to generate gas. This is no small-scale operation: Biffa operates 34 landfill gas locations and generates 530 million kWh of energy per year.

Green energy shares

Can Biffa’s gas operations be considered green energy? After all, many critics do not see landfill waste sites as green. I think that reflects one of the challenges of being an ESG investor. It can often be hard to land on a clear definition and find an investable company that meets that definition in all of its business. For me, Biffa’s recycling and landfill gas generation mean that I would consider it for my portfolio from a green energy and indeed ESG perspective.

Financially, though, I am not compelled. After an 18% share price increase in the past year, the company trades on a price-to-earnings ratio of 42. That looks very costly to me. The net debt pile of £579m – equivalent to 59% of the company’s market capitalisation – also puts me off as servicing that debt could eat into profits. So I will not be adding these green energy shares to my portfolio for now.

ITM Power

A different angle in green energy shares is offered by ITM Power (LSE: ITM). The company is a specialist in hydrogen energy.

ITM has promising technology and has built a large factory in Sheffield, with another factory in the works. That should help increase its ability to generate revenue, which last year grew to £4.3m. But for now, I do not think the company is an attractive fit for my portfolio. Its revenue is small and the company remains heavily loss-making. Post-tax losses last year were £28m. Meanwhile, its market capitalisation of £1.9bn seems very big given the amount of work ITM still has to do to prove the long-term commercial viability and profitability of its operation.

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Waste management

Biffa is one of the UK’s leading waste management companies. It specialises in several areas of waste management. These include collection, surplus redistribution, recycling, treatment, disposal, and energy generation of waste. It is supported by over 9,000 employees and covers 95% of UK postcodes.

As I write, Biffa shares are trading for 354p. At this time last year, the shares were trading for 230p, which is a 53% return over a 12-month period. Since its half-year results were posted in November, however, the shares have stagnated, despite good news. Under normal market conditions, I would have expected the shares to rise.

Macroeconomic pressures and risks

Many FTSE 250 stocks have suffered due to macroeconomic headwinds. These issues seem to be rising interest rates and inflation, which has led to a spike in costs. In addition to this, the supply chain crisis has hampered performance and progress for many firms. Finally, the HGV crisis and effects of pandemic on the UK’s workforce, have also hindered many companies, Biffa included.

Biffa’s progress has been halted mainly due to the HGV crisis, workforce issues, and rising costs, in my opinion. All of these are short/medium-term issues, in my eyes. Operations being affected and margins being squeezed can spook investors, often leading to share prices falling or stagnating.

A FTSE 250 recovery play

I like Biffa as a recovery play for my holdings. Firstly, it has a good track record of historic and recent performance. I do understand that past performance is not a guarantee of the future, however. Its most recent FY 22 interim report, released in November, was excellent. The report covered the 26 weeks ended 24 September 2021. It reported revenue increased by 39% compared to 2020 levels and 14% compared to 2019 levels. Full-year guidance was on track and the strong performance resulted in a 2.2p dividend per share being declared.

When Biffa reported these results, the share price dipped. It is down from 395p at the time of the report being released to current levels, which is a 10% drop. Performance was strong and a dividend is a bonus. Dividends help me make a passive income but can be cancelled at any time.

Biffa’s performance and dividends are attractive but its position in the marketplace is also a bonus. It is the leading provider of waste management solutions and is one of the most recognised brands in the space. It has historic roots stretching back over 100 years and has a large market share in the waste management industry here in the UK.

Overall I think Biffa is an excellent FTSE 250 recovery option for my portfolio. I do understand why the share price has dropped since the last results and I am aware of macroeconomic risks. My confidence in Biffa being a good addition to my holdings stems from its recent performance, the fact it is doing well enough to pay a dividend, and its position in its respective market. I would happily add the shares to my holdings.

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The Biffa share price falls

Biffa is one of the UK’s leading waste management firms. It specialises in the collection, surplus redistribution, recycling, treatment, disposal, and energy generation of waste. It employs over 9,000 people, has close to 3,000 collection vehicles, and covers over 95% of UK postcodes.

As I write, Biffa shares are trading for 360p. A year ago, shares were trading for 229p, which gives an impressive 57% return over 12 months. The Biffa share price is actually down 7% since last week’s half-year results were announced. Shares were trading at all-time highs since it joined the London Stock Exchange in 2016, before the results prompted a drop in share price.

So why have Biffa shares fallen and what was in the results that has prompted the dip?

Half-year results spooks investors

Biffa’s half-year results covered the 26 weeks ended 24 September 2021. The results were actually impressive, which leads me to believe there are other factors at play that have spooked investors, but more on that later.

It must be noted that the pandemic affected Biffa’s performance so this period was key to understanding recovery prospects. Biffa reported revenue increased 39% compared to 2020 and 14% compared to the same period in 2019, which is encouraging. Cash performance was better than expected and full-year expectations are still in line with forecasts. The strong performance resulted in a 2.2p dividend being declared which is a bonus in my eyes.

I believe the Biffa share price falling is a direct result of the operational issues it is facing in the short and medium term and not recent performance. There are well documented macroeconomic issues that could affect Biffa’s operations and post-pandemic recovery. Firstly, the supply chain crisis is affecting it in a few ways. There is a shortage of vehicles, fuel, and waste containers. The well documented shortage of labour in the form of HGV drivers could also be an issue. This shortage of drivers has impacted collection services. Finally, rising inflation, is driving up costs for Biffa, and will have to be passed on to its customers eventually.

My verdict

The issues noted above have hampered Biffa’s investment viability for many, causing the share price to drop. I can understand the position but overall I feel it is an overreaction.

I believe the Biffa share price could be an opportunity for my portfolio at current levels and I would buy. It is an established business with a large presence backed up by over 100 years of history and tradition. It has a good track record of performance too. I understand that past performance is not a guarantee of the future but revenue and profit increased year on year for three years before the pandemic struck. Biffa also pays a dividend which would make me a passive income. I think now could be an opportunity to buy shares for my portfolio.

The post The Biffa share price falls after HY results! Should I buy or avoid shares? appeared first on The Motley Fool UK.

So what was in this report that has investors spooked? And should I see this as a buying opportunity for my portfolio?

Encouraging results versus the Biffa share price

As a quick reminder, Biffa provides a range of services including, the collection and disposal of household and business waste. Moreover, the firm also provides recycling services to businesses and a suite of management tools to book collections, pay invoices, as well as maintain compliance with environmental legislation.

Despite yesterday’s negative response, the report actually showed some promising signs of recovery. Over the last six months, revenue came in 39% higher than a year ago and 14% higher than in 2019.

With lockdown restrictions largely out of the picture, the need for its business-facing services is back on the rise, resulting in elevated income. Consequently, management has restored profitability back to pre-pandemic levels. Adjusted operating profits came in at £45.4m, a 368% jump compared to a year ago. But it’s still slightly under the £45.7m achieved in 2019.

Needless to say, this is quite encouraging. At least, I think so. And it appears management would agree since it just announced a 2.2p dividend being paid out on 17 December. But if the results were positive, then why did the Biffa share price fall on this report?

Some problems begin to emerge

While the pandemic may no longer be as disruptive to everyday life, it’s still causing chaos for supply chains. Like many other businesses, Biffa is facing quite a few challenges with shortages in vehicles, fuel & waste containers, and HGV drivers. As a result, several bin collection services had to be suspended on multiple occasions, which impeded the group’s recovery progress.

Management has addressed the situation and is already providing additional incentives, such as higher pay to attract new driver applications. However, this will undoubtedly place extra pressure on margins, which are already being affected by price inflation. The company intends to pass on the rise in costs to its customers. However, whether it has sufficient pricing power to do so remains to be seen.

With that in mind, I can understand why some investors are choosing to close their positions, causing the Biffa share price to fall in the process.

The bottom line

The looming risks of operational disruption certainly cannot be ignored. However, despite these challenges, the firm has continued delivering growth and value, from what I can tell. So, personally, I think investors may have overreacted in this case.

Therefore I see the fall in the Biffa share price as a buying opportunity for my portfolio.

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As such, here are my top FTSE 250 shares. I would not hesitate to buy all of these stocks for my portfolio today. 

Top FTSE 250 stocks 

One theme that is attracting a lot of attention right now is recycling. As the world tries to get to grips with climate change, governments around the world are focusing on improving recycling rates. 

This is a dirty, complex business, which means the sector is not easy to penetrate. That is why I would buy FTSE 250 stock Biffa (LSE: BIFF). 

The waste and recycling company is one of the biggest in the UK, and it is expanding overseas too. The group’s sales for the first half of the year are expected to be around 3% higher than 2019. 

Thanks to this growth, the City reckons the stock is trading at a forward price-to-earnings (P/E) ratio of 20.2. I think that looks good value for such a defensive business. Last year, the firm’s sales slumped, but as recent figures show, that was just a blip in Biffa’s growth story. Management is also looking for acquisitions to supplement expansion. 

Risks the firm may face as we advance include rising costs, additional regulations, and competition. All of these challenges could weigh on growth. 

Bounce back 

Insurer Beazley (LSE: BEZ) reported significant losses last year thanks to the pandemic. The firm had to book some big losses on business interruption contracts it had underwritten. This also forced management to ask shareholders for more cash to meet losses. 

The good news is, the firm is now putting this issue behind it. Revenues and profits are set to rise this year, thanks in part, to a buoyant insurance market. Insurance rates are rising due to a string of natural disasters worldwide, which is helping Beazley bounce back from last year’s disaster. 

Gross premiums written increased by 29% in the nine months to 30 September to $3.2bn.

Unfortunately, the company is also having to set aside more cash to cover losses from natural catastrophes, but this is a risk of investing in the insurance sector. There will always be the potential for large losses. 

Still, I think the rising rates should more than offset these losses. That is why I would buy the stock today. 

Growth ahead

One of my favourite FTSE 250 growth stocks is Domino’s Pizza Group (LSE: DOM).

The group is a great operator. Its focus on the delivery market meant that it was primed and ready to glide through the pandemic. And now management is plotting further growth. 

In an update issued in the middle of October, Domino’s announced that it was planning to create 8,000 jobs as it expanded across its markets. The update also revealed that sales for the 13 weeks to 26 September rose 9.9% to £375.8m, or 8.8% on a like-for-like basis.

As the organisation gears up for the next stage of growth, I would buy the shares today. 

That said, I will be keeping an eye on the company’s competitors to see if they are gaining market share from the pizza delivery group. This could be a sign that it is focusing on growth too much, and not spending enough time meeting the demands of existing customers. 

FTSE 250 construction giant 

Balfour Beatty (LSE: BBY) is one of the best ways to play the upcoming construction boom across the UK in my opinion.

The UK government has outlined plans to spend over £100bn in the next few years on infrastructure across the country. As one of the largest construction contractors in the UK, I feel Balfour is primed to capture a large share of this spending. 

According to its latest trading update, issued in the middle of August, interim pre-tax profit was £35m for the six months to 2 July, compared with a loss of £26m a year ago.

Management is also so optimistic about the business’s growth potential that it lifted the company’s margin targets in its support services business to a range of 6% to 8%, from 3% to 5% previously. 

Based on Balfour’s own growth outlook, City analysts reckon the stock is trading at a forward P/E of just 12. I think that is far too cheap for this infrastructure growth play. As well as this attractive valuation, analysts say the stock will yield more than 3% next year. 

Having said all of the above, I will be keeping in mind the fact that the construction industry is highly volatile. It is usually the first to feel the pain in any economic downturn. As such, this stock might not be suitable for all investors. 

Nevertheless, considering its potential over the next few years, I would buy the shares for my portfolio now. 

Market challenger

The last of my stocks quintet is AJ Bell (LSE: AJB), which was originally launched to take on the big City stockbroking firms and their fat profit margins. In many ways, even though the business is now a £1.7bn company in its own right, it is still a challenger. 

The firm’s low-cost stockbroking service is proving to be very popular with investors, and it just keeps on growing. 

In an update for the year to 30 September, the company said total assets under administration rose 29% to £72.8bn. Customer numbers increased 30% to 382,754, while total net inflows rose 52% to £6.4bn.

Clearly, AJ Bell’s offering still resonates with investors. And considering this growth, even though the stock is a bit more expensive than the businesses I would usually buy, I would still add the shares to my portfolio. 

Some headwinds I will be keeping an eye out going forward include competition from even-lower-cost brokers such as Freetrade, as well as regulations. Additional regulatory costs could hit profit margins and may remove funds from the marketing budget, which would have a knock-on effect on growth. 

The post My top 5 FTSE 250 stocks to buy appeared first on The Motley Fool UK.

Here are five stocks in the index that I would acquire for my portfolio today. 

FTSE 250 champion

Howden Joinery (LSE: HWDN) has some unique qualities that have enabled this enterprise to smash growth expectations. The company’s depot managers are responsible for sales and are rewarded if they can achieve growth. This essentially makes them business owners and encourages development ideas as well as cost-saving initiatives. 

The decentralised structure has helped Howden grow rapidly over the past five years. It is now benefiting from rising demand for home improvement as consumers spend lockdown savings. 

The current growth boom is unlikely to last. However, thanks to its competitive advantages and staff involvement in the business, I think the company’s growth will continue, albeit at a slower rate. 

Some challenges it may have to overcome in the next few quarters are higher materials and labour costs. Supply chain disruption could also impact growth. 

I would buy shares in the FTSE 250 company for my portfolio today despite these risks and challenges. 

Expansion plan 

I think Howden is one of the best-managed businesses in the UK. I feel the same about baker Greggs (LSE: GRG). The company’s food may not be for everyone, but it is clear that the group has carved out a niche in the market, which it can defend fiercely. 

What I am really excited about is the company’s growth plan for the next few years. It is looking to double turnover to “circa £2.4bn” by 2026. To meet this goal, management wants to open 150 stores a year from 2022 and grow the firm’s multichannel sales. 

This is an ambitious target, but I think the company has a strong chance of achieving it. There is clearly a growing demand for its products. And Greggs has been investing heavily over the past few years to build out the infrastructure to meet higher demand. 

Some of the challenges it may face over the next few months include food inflation, which management has said is already having an impact on margins. On top of this, as the group expands, it is only likely to encounter more competition. 

Even after taking these headwinds into account, I would buy the company for my portfolio today as a growth play. With management looking to double revenues over the next five years, I think the stock could make a lucrative addition to my portfolio. 

Petcare market 

When I am looking for shares to buy for my portfolio, I like to focus on companies that have set out ambitious growth targets. This makes it easier for me to estimate how much the enterprise could be worth in the future. 

Pets At Home (LSE: PETS) is one of those businesses. The company has laid out ambitious growth plans for the next few years to grow its retail business and “pet care ecosystem“.

To do this, the group is expanding its store estate, investing in its veterinary business, regenerating existing stores, and increasing visibility “by becoming a responsible corporate citizen”. I think this last point is the most interesting.

Pets At Home has launched a foundation to support animal charities. Not only should this initiative help increase visibility, but charities supported by the businesses may also be more inclined to purchase from the group. 

On the business side, the company has been renegotiating contracts with landlords, securing rent reductions “typically in excess of 20%” and marketing its subscription services to pet owners. This initiative helped the corporation report a 35% increase in customer transactions for the first quarter of its 2022 financial year. 

These are the reasons why I would buy the FTSE 250 stock for my portfolio.

Some challenges it could face as we advance include higher wage costs and regulations on pet ownership. Additional restrictions could increase administrative requirements and reduce profit margins. 

Defensive shares to buy

Some investors like to avoid mining companies. I can understand why. This can be a risky and volatile business. If the price of the commodity being mined suddenly drops, the digger has no choice but to accept the lower price. Countless operations have collapsed due to this uncertainty. 

That said, well-run miners can be excellent investments. With that in mind, I would buy Centamin (LSE: CEY) for my portfolio. 

The Egyptian gold miner has low production costs and a strong, cash-rich balance sheet. On top of these factors, the stock also supports a dividend yield of 12% and trades at a forward price-to-earnings (P/E) of 10. I should note that the dividend yield of 12% is based on historical payout figures. So it may not accurately reflect future dividend potential. 

Still, according to its latest trading update, the company is on track to hit its full-year production and cost targets. For the three months to the end of September, cash costs fell 4% to $846 per oz, and revenues rose 3% to $183m. 

As its growth continues, I would buy this company as a defensive income play in an uncertain world. 

‘Rubbish’ investment 

The last stock on my list of FTSE 250 shares to buy is the refuse company Biffa (LSE: BIFF). It is often said that there are only two certainties in life: death and taxes. I would add a third, rubbish. Humans have always produced, and will always create, some form of waste. And disposing of this rubbish is becoming increasingly difficult. 

That is where Biffa comes into play. The refuse group has the experience and economies of scale required to dispose of rubbish safely and efficiently. Group net revenues for the five months to August were 12% higher than the comparable period in 2019 and 3% excluding acquisitions. I think these numbers show that even during a pandemic, demand for refuse disposal is growing. 

That being said, this is a highly regulated and controlled industry. Additional regulations and controls could impact profit margins and increase costs. If Biffa can’t pass these on, the group may encounter some turbulence. This could benefit Biffa, but it could also prove to be a risk to the firm. 

Despite this risk, I would buy the stock for my portfolio today. 

The post 5 FTSE 250 shares to buy today appeared first on The Motley Fool UK.

Locking in profits

I first covered self-storage firm Lok n’ Store (LSE: LOK) in April 2018. Since then, its share price has climbed almost 90%. That’s hardly a bad result considering the simplicity of the company’s business model.

As today’s update showed, there’s no shortage of demand for space to store possessions. Trading over the year to the end of July has been “excellent” with occupancy rates bouncing to 85.8%. Back in mid-2020, this was a little under 70%. Revenue also rose 20.9% on the previous year and is “continuing to accelerate“. 

At £225m, LOK is far smaller than its peers Big Yellow and Safestore. However, it’s quietly building a sizeable estate. A pipeline of 13 sites will give the company 38% more space and should provide another boost to earnings. Whether this and recent trading are enough to justify the current valuation is another thing.

LOK trades at 39 times forecast earnings. That’s steep given the lack of barriers to entry in this industry. So, while I’d still buy today (no one knows where share prices will go next), I’d probably wait for the next, inevitable, market wobble before fully investing my capital here.

Rubbish trading

Another example of a company operating in a dry as dust sector that’s nevertheless done well for investors is waste manager Biffa (LSE: BIFF). Its shares are up almost 80% over the past year. 

As at LOK, this momentum looks likely to continue. Trading in the first three months of its new financial year was “well ahead” of even BIFF’s own expectations. Although the outlook is tied to the UK economy, management now thinks adjusted earnings for the full 12 months will come in roughly 10% higher than analysts were predicting.

There are a few near-term headwinds to consider though. The much-publicised shortage of HGV drivers is one. Ongoing issues with Biffa’s supply chain due to Covid-19 could also knock sentiment. 

Then again, the shares still trade on a reasonable valuation of 19 times forecast earnings. As such, I would feel comfortable taking a position today.

Profiting from pests

A final pick of boring but brilliant UK stocks for me to buy is FTSE 100 pest control giant Rentokil Initial (LSE: RTO). The £10bn cap company is a world leader at what it does.

Like the other stocks mentioned, RTO has done well for those owners able to sit on their hands. Those buying back in 2016, for example, will be sitting on a gain of around 150%. Now that its core business is showing signs of rebounding from the pandemic (revenue growth of 18.3% was seen in the first six months of 2021), I suspect the shares could go on setting new highs.

There are still risks, of course. A valuation of 33 times earnings suggests a lot of good news is already priced in. Should the global economic recovery slow, it’s arguably the pricier growth stocks that will be hit the hardest.

Then again, this is far more defensive than the typically glitzy tech play. Again, while I wouldn’t throw everything at the stock today, I regard this solid company as one to drip-feed my money into gradually. 

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A top UK share I already own

I already own shares in waste management giant Biffa (LSE: BIFF). And I think its share price (which is up 65% over the past year) could rise again when fresh financials come out on Monday July 19.

Biffa’s waste collections and recycling businesses have suffered terribly as Covid-19 forced businesses to close. But the company enjoyed a “solid recovery” during the second half of the last fiscal year (ending March 2021). As a consequence collections improved to 82% of pre-pandemic levels over the course of the full 12 months. I’m expecting Biffa to have kept this momentum up.

It faces some near-term uncertainty as Covid-19 cases rise again. However, I’m happy to own Biffa because its profits outlook for the years ahead is quite robust in my opinion. It has made acquisitions a key part of its growth strategy, the latest of which in May saw it strike a deal to snap up Viridior in a boost to both its collections and recycling operations.

What’s more, Biffa is in the box seat to enjoy rising demand for recycling services as environmental concerns steadily grow. Indeed, the company is investing heavily in its plastics recycling sites like Washington and Seaham to make the most of this huge opportunity.

City analysts think  earnings at Biffa will rocket 130% in financial 2022. This leaves the UK share trading on a forward price-to-earnings growth (PEG) ratio of 0.1. Any reading below 1 suggests that a share could be undervalued, leaving plenty of scope for fresh price gains in the days ahead.

A new kid on the block

There’s a good chance you may not have heard of Parsley Box Group (LSE: MEAL). This small cap has a modest market capitalisation just north of £70m. And it made its UK share market debut not long ago in March.

Parsley Box hasn’t exactly got off to a flyer and, at 173p per share, trades a little distance below its IPO price of 200p. But I think this share — which provides ready meals to those over the age of 60 — could head northwards when half-year financials are also released on 19 July.

Revenues at Parsley Box rocketed at a compound annual growth rate of around 250% in the two years to financial 2020. And it’s possible that the top line will continue to soar thanks to the retailer’s emphasis on the fast-growing elderly citizen demographic and its focus on the e-commerce channel.

But remember that competition in its marketplace is fierce and the likes of Tesco and Amazon have the clout and the experience to make life very difficult for new entrants like this. It’s an exciting share but the going could be tough from now on.

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