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        <title>Costain Group PLC (LSE:COST) Share Price, History, &amp; News | The Motley Fool UK</title>
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	<title>Costain Group PLC (LSE:COST) Share Price, History, &amp; News | The Motley Fool UK</title>
	<link>https://www.fool.co.uk/tickers/lse-cost/</link>
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            <item>
                                <title>Looking for shares to buy? Check out this sub-£2 stock that’s smashing Rolls-Royce</title>
                <link>https://www.fool.co.uk/2026/03/28/looking-for-shares-to-buy-check-out-this-sub-2-stock-thats-smashing-rolls-royce/</link>
                                <pubDate>Sat, 28 Mar 2026 08:32:00 +0000</pubDate>
                <dc:creator><![CDATA[Edward Sheldon, CFA]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[Value Shares]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1666559</guid>
                                    <description><![CDATA[<p>Those looking for shares to buy have a lot of great options right now. Here’s a UK stock that offers growth, value, and dividend income.</p>
<p>The post <a href="https://www.fool.co.uk/2026/03/28/looking-for-shares-to-buy-check-out-this-sub-2-stock-thats-smashing-rolls-royce/">Looking for shares to buy? Check out this sub-£2 stock that’s smashing Rolls-Royce</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>With the stock market experiencing a bit of a wobble, now could be a good time to scan for shares to buy. As billionaire investor Warren Buffett says, the best time to invest is when others are fearful.</p>



<p>Here, I’m going to highlight a sub-£2 UK stock that could be worth a look. This name – which has outperformed <strong>Rolls-Royce</strong> over the last year – appears to offer the winning combination of growth, value, and income.</p>



<h2 class="wp-block-heading" id="h-improving-our-lives">Improving our lives</h2>



<p>The business is <strong>Costain</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-cost/">LSE: COST</a>), a small British company that specialises in sustainable infrastructure solutions. Operating across the UK’s energy, water, transportation, defence, and nuclear markets, it offers consultancy and advisory services, digital technology solutions, and complex programme delivery. Its ultimate goal is to improve people’s lives.</p>



<figure class="wp-block-image size-full"><img fetchpriority="high" decoding="async" width="930" height="357" src="https://www.fool.co.uk/wp-content/uploads/2026/03/Costain.png" alt="" class="wp-image-1666565" /><figcaption class="wp-element-caption">Source: Costain Group</figcaption></figure>



<p>This stock&#8217;s performed really well recently. Over the last year, it&#8217;s risen about 80% (versus about 45% for Rolls-Royce). However, like most shares, it&#8217;s taken a hit amid the market sell off. Currently, it’s trading for around £1.90, down from £2.03 in early March.</p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>




<h2 class="wp-block-heading" id="h-three-top-features">Three top features</h2>



<p>Now, as I said at the top, this company appears to offer growth, value, and income. On the growth side, it recently told investors that its forward work position is a record £7bn – almost seven times FY2025 revenue.</p>



<p>Looking at its FY2025 results, it seems the company&#8217;s having a lot of success in the energy and defence/nuclear markets right now. Here, revenues were up 39% and 16.5% respectively. Note that for FY2026, analysts expect revenue of £1,233m. That would represent growth of 18% year on year.</p>



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<p><em>&#8220;The Group is strongly positioned in structurally growing markets where significant long-term investment is being made to meet critical national needs.”</em><br></p>



<p>Costain CEO Alex Vaughan</p>
</blockquote>



<p>In terms of the valuation, the forward-looking <a href="https://www.fool.co.uk/investing-basics/how-to-value-shares/pe-ratio/">price-to-earnings</a> (P/E) ratio&#8217;s only 12. So the stock looks cheap today, especially when you consider that earnings are rising rapidly (23% growth last year).</p>



<p>Interestingly, analysts at Berenberg just raised their price target to 240p. That’s about 26% above the current share price.</p>



<p>As for income, analysts expect a payout of around 5p per share for 2026. That puts the <a href="https://www.fool.co.uk/investing-basics/how-to-value-shares/dividend-yield/">dividend yield</a> close to 3% at today’s share price.</p>



<p>It’s worth pointing out that investors are also benefitting from share buybacks. Recently, it announced it will buy back £20m worth of stock (about 4% of the float).</p>



<p>One other thing to like is that the share price is in a strong long-term uptrend. Like Rolls-Royce, the stock&#8217;s been rising for over three years now.</p>



<h2 class="wp-block-heading" id="h-an-opportunity">An opportunity?</h2>



<p>Of course, there are risks here. A pullback in government spending in certain areas is one. Last year, the company’s transportation revenues were very weak. This impacted overall performance.</p>



<p>Overall though, I see a lot of appeal in this name. I think it’s worth a closer look right now.</p>



<p>But it’s not the only UK stock that looks attractive at present.</p>
<p>The post <a href="https://www.fool.co.uk/2026/03/28/looking-for-shares-to-buy-check-out-this-sub-2-stock-thats-smashing-rolls-royce/">Looking for shares to buy? Check out this sub-£2 stock that’s smashing Rolls-Royce</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>Up 345% with a P/E of just 13.8! I’m betting my favourite FTSE 250 stock keeps smashing it</title>
                <link>https://www.fool.co.uk/2026/03/11/up-345-with-a-p-e-of-just-13-8-im-betting-my-favourite-ftse-250-stock-keeps-smashing-it/</link>
                                <pubDate>Wed, 11 Mar 2026 16:45:00 +0000</pubDate>
                <dc:creator><![CDATA[Harvey Jones]]></dc:creator>
                		<category><![CDATA[Growth Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1660157</guid>
                                    <description><![CDATA[<p>Harvey Jones celebrates a brilliant recovery play as this beaten-down stock comes roaring back into the FTSE 250. Can its momentum continue?</p>
<p>The post <a href="https://www.fool.co.uk/2026/03/11/up-345-with-a-p-e-of-just-13-8-im-betting-my-favourite-ftse-250-stock-keeps-smashing-it/">Up 345% with a P/E of just 13.8! I’m betting my favourite FTSE 250 stock keeps smashing it</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
]]></description>
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<p>When I bought my favourite&nbsp;<strong>FTSE 250</strong>&nbsp;stock a couple of years ago, it wasn’t even in the index. It is now.</p>



<p>Infrastructure solutions specialist <strong>Costain Group</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-cost/">LSE: COST</a>) stormed back into the <strong>FTSE 250</strong> on 2 March after a 20-year absence. It marks a remarkable turnaround for a business that took a right old beating. Happily, I got in relatively early, buying the shares in November 2023. Is it too late to hop on board?</p>



<p>Costain was caught up in the outsourcing crisis that sank Carillion in 2018. The pandemic made things worse. In 2020 the shares crashed more than 80% as projects stalled and profits evaporated. A painful £90m loss on two large road schemes completed the rout.</p>



<h2 class="wp-block-heading" id="h-costain-group-shares-shoots-the-lights-out">Costain Group shares shoots the lights out</h2>



<p>One thing caught my eye in the aftermath. Costain was sitting on a pile of cash roughly equal to its market value. That looked like both a safety net and a springboard. The recovery has been extraordinary. The share price has surged 345% over three years and almost 95% over 12 months.</p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>Market cap now sits around £531m, so it’s still a relatively small business. That potentially leaves room to grow if momentum continues. </p>



<p>The rally gathered fresh pace after yesterday&#8217;s (10 March) impressive 2025 results, with the shares jumping almost 18%. Costain delivered another year of strong financial progress across water, defence, energy, and transport projects. The forward order book surged 30% to a record £7bn. That’s roughly seven times annual revenue of £1.05bn, giving unusually strong visibility.</p>



<p>Adjusted operating profit rose 9.3% to £47.1m while margins improved to 4.5%. Strong <a href="https://www.fool.co.uk/investing-basics/understanding-company-accounts/the-cash-flow-statement/">cash generation</a> has strengthened the balance sheet and allowed management to increase shareholder returns.</p>



<p>The group confirmed a £20m <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/share-buybacks/">share buyback</a> and lifted its total dividend to 4.2p for the year. That&#8217;s a 75% increase on the 2024 payout of 2.4p (helped by pension funding restrictions being lifted). Now it plans to adopt dividend cover of three times adjusted earnings to keep payouts sustainable while the business expands. The trailing dividend yield stands around 2.11% and analysts expect that to rise close to 2.5% in 2026.</p>



<h2 class="wp-block-heading" id="h-valuation-still-looks-reasonable">Valuation still looks reasonable</h2>



<p>Despite the strong run, the valuation still looks modest. The shares trade on a price-to-earnings ratio of 13.8. Management believes performance could step up again later this decade as customers increase investment in transport, water, and energy network infrastructure. Operating margins should top 5% over time.</p>



<p>Infrastructure contracting always carries risks. Pricing complex projects is difficult and mistakes can prove costly. Costain has found that the hard way. The UK economy is struggling and government finances remain stretched, threatening new infrastructure spend. Revenue will always ebb and flow depending on when projects are awarded and completed.</p>



<p>Even so, the record order book offers encouraging visibility. Momentum is clearly behind the business. I thought the rally might cool a year ago, yet the shares have powered on. The valuation still looks reasonable and the pipeline of work is enormous. I think Costain is still worth considering. I&#8217;m now on the look out for the next big recovery story.</p>
<p>The post <a href="https://www.fool.co.uk/2026/03/11/up-345-with-a-p-e-of-just-13-8-im-betting-my-favourite-ftse-250-stock-keeps-smashing-it/">Up 345% with a P/E of just 13.8! I’m betting my favourite FTSE 250 stock keeps smashing it</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>My favourite FTSE growth stock has jumped another 10% on a huge contract win!</title>
                <link>https://www.fool.co.uk/2025/10/13/my-favourite-ftse-growth-stock-has-jumped-another-10-on-a-huge-contract-win/</link>
                                <pubDate>Mon, 13 Oct 2025 11:23:50 +0000</pubDate>
                <dc:creator><![CDATA[Harvey Jones]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[Market Movers]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1588607</guid>
                                    <description><![CDATA[<p>Harvey Jones woke up to the news that his number one growth stock has done it again, after some really good news this morning. Can it climb higher still?</p>
<p>The post <a href="https://www.fool.co.uk/2025/10/13/my-favourite-ftse-growth-stock-has-jumped-another-10-on-a-huge-contract-win/">My favourite FTSE growth stock has jumped another 10% on a huge contract win!</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[
<p>My favourite UK growth stock is having a moment, jumping more than 11% in early trading after some terrific news.</p>



<p>The stock in question is <strong>Costain</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-cost/">LSE: COST</a>), the engineering and construction group that’s transformed itself from a former penny share into a serious <strong>FTSE 250</strong> contender.&nbsp;</p>



<p>When a company of this size announces it’s landed a £1bn contract, the earth moves. Or at least, it shakes a little.</p>



<p>Today (13 October), Costain revealed it’s been chosen by Sellafield as its utilities delivery partner, a major part of the site’s Infrastructure Delivery Partnership.&nbsp;</p>



<h2 class="wp-block-heading" id="h-the-shares-are-flying">The shares are flying</h2>



<p>The nine-year deal, potentially extendable by another six, will see Costain refurbish and replace complex utility systems to support Sellafield’s nuclear decommissioning.</p>



<p>Chief executive Alex Vaughan called the award <em>“testament to our strategy of developing long-term relationships with tier 1 customers”</em>. He’s happy. I’m happy too. This is exactly the kind of steady, high-value contract that helps build lasting shareholder confidence.</p>



<h2 class="wp-block-heading" id="h-long-road-to-recovery">Long road to recovery</h2>



<p>Costain’s comeback has been remarkable. The shares are up 40% over the last year and 245% over five. However, there was plenty of turbulence over the summer.</p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>On 20 August, investors had to swallow an 18% fall in half-year revenues to £525.4m. That came as road projects ended and HS2’s rephased schedule hit the books. The stock plunged more than 15% on the day.</p>



<p>Yet there were positives. Adjusted operating profit rose 3.1% to £16.8m, margins improved to 3.2%, and management reaffirmed confidence in hitting its 4.5% target next year. Net cash dipped to £144.9m, but that’s still a pretty big pile for a company with a £414m market cap. The interim dividend was hiked from 0.4p to 1p, which is a bumper 150% increase.</p>



<p>I never considered selling. I even toyed with averaging down. Now I wish I had. With today&#8217;s Sellafield win, I&#8217;m up more than 150% since adding it to my Self-Invested Personal Pension in November 2023. </p>



<h2 class="wp-block-heading" id="h-strong-order-book-and-revenues">Strong order book and revenues</h2>



<p>Costain&#8217;s forward order book stands at £5.6bn, more than four times annual revenues. Around 90% of forecast revenue for the year is already secured, and management says bidding activity remains high.&nbsp;</p>



<p>Its focus on long-term infrastructure, nuclear, energy transition, transport, looks well aligned with government policy.</p>



<p>The shares trade on a modest price-to-earnings ratio of 9.6, still low for a business growing this fast. It also kicked off a £10m <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/share-buybacks/">share buyback</a> in June, and has a trailing dividend yield of 1.54%.</p>



<p>Risks remain. Infrastructure contracts require a steady stream of new wins to offset expiring contracts, there is always a danger management will underprice bids and costs run out of control, as happened before. A short-term risk is that profit-takers could move in after today’s surge. But I still think this looks like a stock investors<a href="https://www.fool.co.uk/investing-basics/understanding-the-market/what-is-market-volatility/"> who can withstand short-term volatility</a> might consider buying, with a long-term view.</p>



<p>Today&#8217;s Sellafield contract win is priced in. Costain will have to deliver more earthshaking news to keep up the momentum, but I&#8217;m optimistic and have no intention of banking my profits today.</p>
<p>The post <a href="https://www.fool.co.uk/2025/10/13/my-favourite-ftse-growth-stock-has-jumped-another-10-on-a-huge-contract-win/">My favourite FTSE growth stock has jumped another 10% on a huge contract win!</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>Up 350% in 3 years but my favourite FTSE growth share is still on a low P/E of just 10!</title>
                <link>https://www.fool.co.uk/2025/07/16/up-350-in-3-years-but-my-favourite-ftse-growth-share-is-still-on-a-low-p-e-of-just-10/</link>
                                <pubDate>Wed, 16 Jul 2025 11:30:00 +0000</pubDate>
                <dc:creator><![CDATA[Harvey Jones]]></dc:creator>
                		<category><![CDATA[Growth Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1547300</guid>
                                    <description><![CDATA[<p>Harvey Jones can't tear his eyes away from this former penny stock turned growth share superpower. But can it carry on climbing at speed?</p>
<p>The post <a href="https://www.fool.co.uk/2025/07/16/up-350-in-3-years-but-my-favourite-ftse-growth-share-is-still-on-a-low-p-e-of-just-10/">Up 350% in 3 years but my favourite FTSE growth share is still on a low P/E of just 10!</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>I thought I couldn’t love my favourite&nbsp;UK&nbsp;growth share more, but I do. It’s up another 17% in the last month. Over 12 months, it’s up 70%, and over three years, a bumper 345%.</p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>The company in question is&nbsp;<strong>Costain Group</strong>&nbsp;(<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-cost/">LSE: COST</a>), which I added to my Self-Invested Personal Pension in a fit of <a href="https://www.fool.co.uk/investing-basics/how-to-invest-in-shares/how-to-be-a-good-investor/">stock-picking inspiration</a> in December 2023.</p>



<h2 class="wp-block-heading" id="h-top-recovery-stock">Top recovery stock</h2>



<p>I’m currently sitting on a gain of 144%, making it the best performer in my SIPP. It’s comfortably ahead of&nbsp;<strong>Rolls-Royce</strong>, up 103% since I bought in August 2024, and private equity firm&nbsp;<strong>3i Group</strong>, up 101% since August 2023.</p>



<p>Just a few short years ago, Costain was reeling from Covid lockdowns and a painful £90m hit on problematic contracts, yet that rough patch has become the springboard for its current success.</p>



<p>No fresh updates have landed since the last one on 16 June, but the story remains strong. The first half of the year is going according to plan, and the board confirmed it retains a <em>&#8220;strong, high-quality forward work position&#8221;</em> worth more than four times annual revenues, with further bids in play. This long-term visibility allows management to plan ahead and invest.</p>



<p>The board remains upbeat about future prospects. So do analysts. Of the six offering ratings, five say Strong Buy, one says Hold, and none are negative.</p>



<h2 class="wp-block-heading" id="h-cash-cushion-and-capital-returns"><strong>Cash cushion and capital returns</strong></h2>



<p>The group still carries a healthy cash balance. While this has dipped from £200m to around £180m, it still compares favourably with today’s £411m market cap. That offers reassurance, even though falling interest rates will reduce the returns on that cash.</p>



<p>Shareholders are being rewarded too. The full-year 2024 dividend doubled from 1.2p to 2.4p. The dividend yield today is 1.43%, which might not knock anyone’s socks off, but isn&#8217;t bad given the soaring stock price. Costain is also offering <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/share-buybacks/">share buybacks</a>, with the latest £10m programme announced just weeks ago.</p>



<p>Construction is never risk-free. Contract pricing is tricky and cost overruns can still sting.  And while Rachel Reeves has signalled support for public investment, infrastructure spending could still get delayed or squeezed as she wrestles with the deficit.</p>



<h2 class="wp-block-heading" id="h-forecast-slowdown">Forecast slowdown</h2>



<p>Here’s another note of caution. Although shares have soared, the 12-month median target from analysts is just 152.8p. That’s close to where we are now, suggesting the quick gains may be over. Of course, some of those estimates may pre-date the recent surge and require updating.</p>



<p>The <strong>FTSE 100</strong> may have hit a record high of 9,000 this week, but some of the most exciting growth stories are found further down the market-cap scale.</p>



<p>Costain’s price-to-earnings ratio has crept up from 8.8 last month to 10.34 today, but that still suggests there&#8217;s value here, even after recent gains.</p>



<p>I may be sitting on a tidy profit, but there’s no way I’m selling. The business looks solid, momentum is strong, and management keeps delivering. Given the low valuation, high cash pile, and strong order book, I think investors might still consider buying today. Just temper those expectations slightly.</p>
<p>The post <a href="https://www.fool.co.uk/2025/07/16/up-350-in-3-years-but-my-favourite-ftse-growth-share-is-still-on-a-low-p-e-of-just-10/">Up 350% in 3 years but my favourite FTSE growth share is still on a low P/E of just 10!</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>Is this bargain-priced growth stock the best share for me to buy after today’s bullish update?</title>
                <link>https://www.fool.co.uk/2025/06/16/is-this-bargain-priced-growth-stock-the-best-share-for-me-to-buy-after-todays-bullish-update/</link>
                                <pubDate>Mon, 16 Jun 2025 10:48:41 +0000</pubDate>
                <dc:creator><![CDATA[Harvey Jones]]></dc:creator>
                		<category><![CDATA[Growth Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1534380</guid>
                                    <description><![CDATA[<p>This former penny stock's had a brilliant run and Harvey Jones has reaped the rewards. But does he still think it's the best share to buy today?</p>
<p>The post <a href="https://www.fool.co.uk/2025/06/16/is-this-bargain-priced-growth-stock-the-best-share-for-me-to-buy-after-todays-bullish-update/">Is this bargain-priced growth stock the best share for me to buy after today’s bullish update?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>I&#8217;m constantly on the hunt for the best share to buy, but now I&#8217;m wondering whether I already own it. The stock is&nbsp;<strong>Costain Group</strong>&nbsp;(<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-cost/">LSE: COST</a>), which I snapped up on 29 November 2023 for 60p.</p>



<p>Its shares jumped almost 9% this morning (June 16) after another upbeat statement. The price now sits at 141p. That puts me 125% ahead, and it’s now the top performer in my Self-Invested Personal Pension (SIPP). Given the strong outlook, I&#8217;m tempted to buy more. </p>



<h2 class="wp-block-heading" id="h-cash-and-contracts">Cash and contracts</h2>



<p>Today&#8217;s update offered plenty to like, in particular a new £10m <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/share-buybacks/">share buyback</a>. Costain said trading for the first half remains in line with internal expectations and described its forward work position as <em>“strong”</em> and <em>“high-quality”</em>. It&#8217;s also worth more than four times annual revenue.</p>



<p>That work pipeline shows long-term visibility and gives management room to plan and invest. Costain also highlighted fresh contract wins and increased activity across existing frameworks. It believes this will support further progress in the second half of the year.</p>



<p>There’s more. Costain&#8217;s on track to meet its target 4.5% adjusted operating margin run rate in full-year 2025. That was first flagged in May and it’s encouraging to see it repeated today.</p>



<h2 class="wp-block-heading" id="h-value-and-recovery">Value and recovery</h2>



<p>The share price was crushed in 2020 during the pandemic, but the recovery since has been solid. It’s climbed 60% over 12 months and 230% over three years.</p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>What really caught my eye when I bought Costain was that it had £200m in net cash, compared to a market-cap of £160m. That cash pile now gave me plenty reassurance, plus Costain was earning lots of interest on it too.</p>



<p>Today, it&#8217;s around £180m, while the market-cap is £382m. That&#8217;s still a pretty handy cushion, although I guess the interest earned will slide when base rates fall.</p>



<p>I think of Costain as a growth stock, rather than an <a href="https://www.fool.co.uk/personal-finance/share-dealing/guides/should-i-buy-growth-or-income-shares/">income play</a>. But is it both? In 2024, the board literally doubled the full-year dividend from 1.2p to 2.4p. How many companies do that? </p>



<p>Shareholder payouts look solid, with the board targeting cover of three times earnings. The trailing yield&#8217;s now 1.71%, which looks modest, but the board&#8217;s clearly progressive.</p>



<p>Investors are getting regular share buybacks too &#8211; today&#8217;s follows a £10m payment last year.</p>



<h2 class="wp-block-heading" id="h-risks-and-rewards">Risks and rewards</h2>



<p>Construction remains a tough business. Getting bids and pricing right is hard, and we all know what happens when costs overrun. Costain knows this better than most. Its share price fall wasn’t just about lockdown, it also took a £90m hit on contract overruns. The group says it has changed its approach since, but the risk will never completely disappear.</p>



<p>Our cash-strapped government could also delay infrastructure work. However, the Spending Review suggests chancellor Rachel Reeves is keen to press ahead with public projects.</p>



<p>Despite recent gains, the price-to-earnings ratio sits at just over 8.8. That still looks low, given the turnaround and consistent delivery.</p>



<p>Of the six analysts offering stock ratings, five call it a Strong Buy. One says Hold. I think Costain has the momentum to keep growing, and am seriously thinking of topping up my stake. Whether it’s ‘the best’ share to buy will only become clear later. Investors should do their own research. They may find other growth stocks they prefer, but I think it&#8217;s worth considering.</p>
<p>The post <a href="https://www.fool.co.uk/2025/06/16/is-this-bargain-priced-growth-stock-the-best-share-for-me-to-buy-after-todays-bullish-update/">Is this bargain-priced growth stock the best share for me to buy after today’s bullish update?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>These 3 stunning UK stocks have doubled my money in 18 months. Time to bank the profit?</title>
                <link>https://www.fool.co.uk/2025/06/04/these-3-stunning-uk-stocks-have-doubled-my-money-in-18-months-time-to-bank-the-profit/</link>
                                <pubDate>Wed, 04 Jun 2025 08:47:07 +0000</pubDate>
                <dc:creator><![CDATA[Harvey Jones]]></dc:creator>
                		<category><![CDATA[Growth Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1528257</guid>
                                    <description><![CDATA[<p>Harvey Jones had a brilliant month in November 2023, when he bought the three best-performing UK stocks  in his portfolio. Should he bank his profits?</p>
<p>The post <a href="https://www.fool.co.uk/2025/06/04/these-3-stunning-uk-stocks-have-doubled-my-money-in-18-months-time-to-bank-the-profit/">These 3 stunning UK stocks have doubled my money in 18 months. Time to bank the profit?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>I hold around 20 UK stocks in my self-invested personal pension (SIPP), but three stand head and shoulders above the rest.</p>



<p>Coincidentally, I bought all three in November 2023, and they&#8217;ve all hit the magic 100% mark in the Gain/Loss column of my online SIPP. What a month that was!</p>



<p>This is brilliant and I love ‘em but it does leave me facing a problem. They&#8217;ve all failed to kick on since hitting that milestone.</p>



<p>A secondary issue is that one of them is now worth almost 9% of my entire SIPP, so I’m heavily exposed to its fortunes.</p>



<h2 class="wp-block-heading" id="h-3i-group-flies">3i Group flies</h2>



<p>That stock is <strong>3i Group</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-iii/">LSE: III</a>). Shares in the <strong>FTSE 100</strong>-listed private equity manager have rocketed 357% in five years, and <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/ftse-100-average-return/">continue to fly</a>, up 39% in 12 months.</p>


<div class="tmf-chart-singleseries" data-title="3i Group Plc Price" data-ticker="LSE:III" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>Established in 1945, 3i has a brilliant track record of buying companies, building them up, pocketing dividends then selling them at a profit.</p>



<p>It has a huge success on its hands in discount retailer Action, which has grown so fast it now makes up more than 75% of 3i’s total £23.6bn portfolio.</p>



<p>Now I&#8217;m worried 3i may be a little too Action-packed. I&#8217;m not sure what its exit strategy is or whether it even wants one.</p>



<p>Another issue is that shares in the investment trust are trading at a massive 69% premium to their underlying net value.&nbsp;</p>



<p>I&#8217;m still sitting on a 97% gain, and common sense suggests I should at the very least reduce my exposure. Trouble is, it’s hard to kiss success goodbye.</p>



<h2 class="wp-block-heading" id="h-costain-is-cheaper">Costain is cheaper</h2>



<p>I&#8217;m a bit less concerned about the second double-my-money stock, construction specialist <strong>Costain Group</strong>.</p>



<p>Costain has also idled since hitting the 100% mark but still looks cheap, with a price-to-earnings (P/E) ratio of just 8.3.</p>



<p>There’s lots to like here. Its forward work position, a key industry measure, jumped £1.5bn to a record £5.4bn in 2024. The shares are up 44% in the last 12 months.</p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>Construction can be a <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/what-is-market-volatility/">volatile sector</a>, so that&#8217;s a concern. Also, our cash-strapped government may struggle to fund infrastructure development.</p>



<p>However, Costain looks solid, with net cash of £180m against a £330m market cap. With its forward work piling up, I&#8217;d rather buy more than sell.</p>



<h2 class="wp-block-heading" id="h-just-group-stumbles">Just Group stumbles</h2>



<p><strong>FTSE 250</strong> insurer <strong>Just Group</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-just/">LSE: JUST</a>) has also been going gangbusters, up 42% over the last year.</p>





<p>However, the shares have fallen 12% in the last three months, after full-year results published on 7 March fell well short of estimates.</p>



<p>Adjusted pre-tax profit fell by 7.3% to reach £482m, mostly due to lower non-operating items. Underlying operating profit climbed 34% to £504m and group chief David Richardson remains upbeat.</p>



<p>He noted that the company had more than doubled profits in just three years, a process supposed to take five. Just still looks incredibly cheap with a P/E of just 4.1. The trailing yield is a low 1.68%, but the <a href="https://www.fool.co.uk/personal-finance/share-dealing/guides/should-i-buy-growth-or-income-shares/">dividend policy</a> is progressive, with a 20% hike in 2024.</p>



<p>I bought for the long-term, and since I hold a modest stake, I&#8217;m not selling. I might even take advantage of the recent dip. Providing I can bring myself to trim my position in 3i.</p>
<p>The post <a href="https://www.fool.co.uk/2025/06/04/these-3-stunning-uk-stocks-have-doubled-my-money-in-18-months-time-to-bank-the-profit/">These 3 stunning UK stocks have doubled my money in 18 months. Time to bank the profit?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>This former penny stock&#8217;s on fire – time for me to double down?</title>
                <link>https://www.fool.co.uk/2025/05/29/this-former-penny-stocks-on-fire-time-for-me-to-double-down/</link>
                                <pubDate>Thu, 29 May 2025 11:14:51 +0000</pubDate>
                <dc:creator><![CDATA[Harvey Jones]]></dc:creator>
                		<category><![CDATA[Growth Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1525288</guid>
                                    <description><![CDATA[<p>It's not often that Harvey Jones takes a punt on a penny stock. Maybe he should do it more often, given the huge success he's enjoyed with this one.</p>
<p>The post <a href="https://www.fool.co.uk/2025/05/29/this-former-penny-stocks-on-fire-time-for-me-to-double-down/">This former penny stock&#8217;s on fire – time for me to double down?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>When I bought construction and engineering firm <strong>Costain Group</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-cost/">LSE: COST</a>) on 29 November 2023, it fitted the technical definition of a penny stock. The shares cost me 60p. Today, they’ve more than doubled to 125p, so it&#8217;s a penny stock no more. It&#8217;s a red-hot growth stock and I love it.</p>



<p>Costain&#8217;s now the best-performer in my Self-Invested Personal Pension (SIPP). But by my standards, it was a bit of a punt.</p>



<p>Most of my holdings are <strong>FTSE 100</strong> blue-chips, often chosen for their dividends. Many have slimmer growth prospects as a result. <strong>3i</strong> <strong>Group</strong>, <strong>Rolls-Royce Holdings</strong> and <strong>Lloyds Banking Group</strong> have powered on since I bought them, but none have matched Costain.</p>



<h2 class="wp-block-heading" id="h-recovery-story-with-substance"><strong>Recovery story with substance</strong></h2>



<p>The share price collapsed in 2020. Lockdowns hit construction hard and Costain also had to swallow £90m of losses linked to specific contracts. It was all a bit sticky, and investors deserted the stock. But when I took a closer look in late 2023, one thing stood out. It had net cash of £200m against a market-cap of £160m.</p>



<p>That’s what made me take the plunge. The company had money in the bank and was earning a decent rate of interest on it too.</p>



<p>It was in the early stages of a turnaround and, happily, it&#8217;s continued. CEO Alex Vaughan has delivered steady progress. Last year’s £10m <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/share-buybacks/">share buyback</a> boosted confidence. And on 15 May, the group confirmed that trading this year has remained in line with expectations.</p>



<p>Costain&#8217;s on track to hit its adjusted operating margin run rate target of 4.5% in 2025. Its forward work position, a key industry measure, jumped £1.5bn to a record £5.4bn. The board expects net cash to finish the year close to £180m. That&#8217;s below today&#8217;s £340m market-cap but still a source of comfort.</p>



<h2 class="wp-block-heading" id="h-momentum-still-strong"><strong>Momentum still strong</strong></h2>



<p>Costain’s strategy of focusing on critical national needs seems to be delivering. Recent contract wins include work in nuclear energy. The board remains confident and so do analysts. Of the six offering one-year ratings, five say Strong Buy and one says Buy.</p>



<p>However, share price growth may now slow. The 16 analysts offering price targets suggest a median forecast of just over 145p. That’s a relatively modest rise of around 17% from today.</p>



<p>Nothing climbs forever. After a gain of 47% over one year and 217% over three, the quick money may have been made.</p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<h2 class="wp-block-heading" id="h-risks-remain"><strong>Risks remain</strong></h2>



<p>Construction can be a <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/what-is-market-volatility/">volatile sector</a>. Costain&#8217;s still vulnerable to the broader economy and government spending. Chancellor Rachel Reeves has axed some infrastructure projects. On the flipside, her push for pension funds to invest in UK infrastructure might work in Costain’s favour.</p>



<p>There’s also the matter of interest rates. Costain benefits from solid returns on its cash pile, but lower rates could reduce that. While rates remain relatively high for now, they may slide over time.</p>



<p>Even so, I’m still glad I took a chance on this hidden gem. Costain has momentum, a healthy order book and cash in the bank. I may even consider buying more, but I won’t be expecting to double my money again in a hurry.</p>
<p>The post <a href="https://www.fool.co.uk/2025/05/29/this-former-penny-stocks-on-fire-time-for-me-to-double-down/">This former penny stock&#8217;s on fire – time for me to double down?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>I’m backing these 2 UK shares to soar again next year</title>
                <link>https://www.fool.co.uk/2024/12/06/im-backing-these-2-uk-shares-to-soar-again-next-year/</link>
                                <pubDate>Fri, 06 Dec 2024 13:16:40 +0000</pubDate>
                <dc:creator><![CDATA[Harvey Jones]]></dc:creator>
                		<category><![CDATA[Growth Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1429490</guid>
                                    <description><![CDATA[<p>Harvey Jones is excited by the market-beating performance of these two UK shares in 2024. Now he hopes they can maintain their momentum in the year ahead.</p>
<p>The post <a href="https://www.fool.co.uk/2024/12/06/im-backing-these-2-uk-shares-to-soar-again-next-year/">I’m backing these 2 UK shares to soar again next year</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>Two UK shares in my Self-Invested Personal Pension (SIPP) have put on a strong show this year, and I&#8217;ve got high hopes for 2025.</p>



<p>The first is engineering and construction specialist&nbsp;<strong>Costain Group</strong>&nbsp;(<a href="https://www.fool.co.uk/tickers/lse-cost/">LSE: COST</a>). Its shares are up a stunning 65.62% over the last 12 months. I bought them on 29 November last year and I&#8217;m personally up 71%, so I&#8217;m a happy bunny.</p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>The Costain share price plunged as delayed and disputed infrastructure products forced the board to issue two profit warnings, in 2019 and 2020. Costs overran and it got embroiled in contract disputes.</p>



<h2 class="wp-block-heading" id="h-the-share-price-could-do-it-again-in-2025">The share price could do it again in 2025</h2>



<p>I felt the worst was over last year and the company had one big factor in its favour – a fat and juicy bank balance. It boasted<span style="font-size: revert"> £194m of net cash against a market-cap of just £188m. With interest rates high, the money was rolling in, simply by leaving that pile in the bank.</span> It&#8217;s since helped fund a £10bn <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/share-buybacks/">share buyback</a>.</p>



<p>Costain has continued to win contracts this year, driving the order book up to £4.3bn. On 4 December, it secured another worth £400m, with HS2.</p>



<p>Despite the share price surge, Costain still looks decent value, trading at 8.44 times earnings. Currently, three analysts have one-year share price forecasts, and they&#8217;ve set a median target of 145.5p. That&#8217;s up 38.6% from today&#8217;s 105p. All three label Costain shares a Strong Buy.</p>



<p>Costain isn&#8217;t without risks. It relies on a steady stream of large public infrastructure products and if they don&#8217;t come through sales will slump. That&#8217;s a worry given that the state of the UK&#8217;s finances.</p>



<p>Earnings can be bumpy as old projects end and new ones begin. Especially if there&#8217;s a gap between the two. Another risk is that it underprices when pitching for business. But I remain optimistic given the sound fundamentals.</p>



<h2 class="wp-block-heading" id="h-warpaint-shares-are-on-the-march">Warpaint shares are on the march</h2>



<p>Colour cosmetics specialist <strong>Warpaint</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-w7l/">LSE: W7L</a>) is another big portfolio winner. Its W7 and Technic brands are sold at Tesco and major retailers in the US and Europe, topped up by online sales from its own site.</p>



<p>Shares in this <strong>AIM</strong>-listed enterprise are up 64.92% over the last year. Over five years they&#8217;re up a staggering 507%. Sadly, I didn&#8217;t buy until 16 January this year, so I&#8217;m sitting on a relatively modest 28.9% gain.</p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>On 29 November, broker Berenberg added Warpaint to its list of top stock picks for 2025. The same day, RBC Markets forecast revenue growth of around 13% a year through to 2026, while praising its <em>&#8220;accessible, on-trend, quality cosmetic range at an affordable price&#8221;</em>.</p>



<p>Affordability is the key word. That&#8217;s helped Warpaint grow steadily throughout the <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/when-will-the-stock-market-recover/">cost-of-living crisis</a>.</p>



<p>Beauty&#8217;s a fickle business, of course. Another worry is that growth prospects are priced in, with the shares trading at 29.18 times earnings. They spiked after Warpaint posted record first-half sales and higher margins on 17 September, but soon retreated.</p>



<p>Warpaint has traded sideways for the last six months but I expect it to be back on the warpath in 2025.</p>
<p>The post <a href="https://www.fool.co.uk/2024/12/06/im-backing-these-2-uk-shares-to-soar-again-next-year/">I’m backing these 2 UK shares to soar again next year</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>Up 70% and 80%! I’m thrilled I bought these two red-hot UK stocks exactly 1 year ago</title>
                <link>https://www.fool.co.uk/2024/11/25/up-70-and-80-im-thrilled-i-bought-these-two-red-hot-uk-stocks-exactly-1-year-ago/</link>
                                <pubDate>Mon, 25 Nov 2024 09:57:09 +0000</pubDate>
                <dc:creator><![CDATA[Harvey Jones]]></dc:creator>
                		<category><![CDATA[Growth Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1423059</guid>
                                    <description><![CDATA[<p>Harvey Jones bought two UK stocks at the end of November last year, and both have smashed the market in 2024. Can they continue to do so in 2025?</p>
<p>The post <a href="https://www.fool.co.uk/2024/11/25/up-70-and-80-im-thrilled-i-bought-these-two-red-hot-uk-stocks-exactly-1-year-ago/">Up 70% and 80%! I’m thrilled I bought these two red-hot UK stocks exactly 1 year ago</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>2024 has been a bumpy year for UK stocks but I&#8217;ve had my share of winners, including two I bought in the final days of last November. There must have been something in the water that month, because both have done brilliantly. Can their dazzling run continue in 2025?</p>



<p>I think so and I&#8217;m holding on to both stocks.</p>



<p>My first red-hot stock pick was infrastructure specialist <strong>Costain Group</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-cost/">LSE: COST</a>). Its big appeal was that net cash on its balance sheet was worth more than its market-cap, offering a big safety net for a smaller company.</p>



<h2 class="wp-block-heading" id="h-costain-group-has-been-a-brilliant-buy">Costain Group has been a brilliant buy</h2>



<p>Costain ended 2023 with £194m in net cash against a market-cap of £188m. When I last wrote about the stock on 22 September, net cash had shrunk slightly to £166m while the market-cap had soared to £284m.</p>



<p>It still has a big comfy cash balance and is earning a heap of interest simply for parking it in the bank. That may fade if interest rates fall next year but Costain&#8217;s underlying business has been doing well too. </p>



<p>First-half profits to 30 June climbed 8.7% to £16.3m, with margins edging up. Revenues actually dipped 3.8% to £639.3m. Costain investors must put up with this level of bumpiness, as old projects are wrapped up, in this case the main works at Gatwick Airport Station.</p>



<p>Happily, it&#8217;s winning new contracts with a <em>&#8220;very healthy&#8221;</em> £4.3bn order book. The board felt able to reward shareholders with a £10bn <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/share-buybacks/">share buyback</a>.</p>



<p>The Costain share price has soared 80.31% in a year but the stock still trades at a modest 8.48 times earnings. </p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>The yield&#8217;s a mere 1.06% but it&#8217;s hard to complain. Next year could be stickier as the UK economy may slow while the inflation revival could push up costs. But after the year I&#8217;ve had, I&#8217;m certainly not selling.</p>



<h2 class="wp-block-heading" id="h-the-just-group-share-price-still-looks-amazing-value">The Just Group share price still looks amazing value</h2>



<p>I followed my nifty purchase of Costain Group by snapping up undervalued <strong>FTSE 250</strong> insurer <strong>Just</strong> <strong>Group</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-just/">LSE: JUST</a>) on 30 November. Its shares are up 70.71% since. If investing was always like this everybody would do it.</p>





<p>The Just Group share price was too cheap to ignore, trading at just 4.2 times earnings. It slumped after 2015&#8217;s pension freedom reforms scrapped the obligation to buy lifetime annuities at retirement, a key product for Just. It was also knocked by regulatory threats over equity release lifetime mortgages, another key product, but they came to nought.</p>



<p><a href="https://www.fool.co.uk/investing-basics/types-of-stocks/investing-in-cyclical-stocks-in-the-uk/">Life goes in cycles</a> and personal annuity sales have revived as rising interest rates give  pensioners more income. Just has also benefitted from the boom in bulk annuities, where companies de-risk by passing on pension scheme liabilities to insurers.</p>



<p>Again, the shares looked cheap despite their stellar run, trading at just 5.06 times earnings. There are risks though. Just is competing for bulk annuity business with blue-chip <strong>FTSE 100</strong> insurers. Personal annuity sales could drop sharply when interest rates retreat. The trailing yield&#8217;s a lowly 1.46%. But I&#8217;m having too much fun to sell now. </p>



<p>Given Costain and Just&#8217;s continuing low valuations, if I didn&#8217;t already have a suitably-sized holding in these two stocks I&#8217;d buy them today and believe they&#8217;re worth investors considering.</p>
<p>The post <a href="https://www.fool.co.uk/2024/11/25/up-70-and-80-im-thrilled-i-bought-these-two-red-hot-uk-stocks-exactly-1-year-ago/">Up 70% and 80%! I’m thrilled I bought these two red-hot UK stocks exactly 1 year ago</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>Up 145% but still cheap with a P/E of 8.5! Is this the best share to buy today?</title>
                <link>https://www.fool.co.uk/2024/09/22/up-145-but-still-cheap-with-a-p-e-of-8-5-is-this-the-best-share-to-buy-today/</link>
                                <pubDate>Sun, 22 Sep 2024 15:00:00 +0000</pubDate>
                <dc:creator><![CDATA[Harvey Jones]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[Value Shares]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1389751</guid>
                                    <description><![CDATA[<p>Earlier this year Harvey Jones decided this FTSE recovery play was the best share to buy, and he's thrilled with how well it's done since. Should he buy more?</p>
<p>The post <a href="https://www.fool.co.uk/2024/09/22/up-145-but-still-cheap-with-a-p-e-of-8-5-is-this-the-best-share-to-buy-today/">Up 145% but still cheap with a P/E of 8.5! Is this the best share to buy today?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>Back in March I decided the best share to buy for rapid, sustainable growth was smart infrastructure specialist <strong>Costain Group</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-cost/">LSE: COST</a>). I&#8217;m up around 68% since then, including dividends. </p>



<p>Investors who got in early have done even better. Over one year, the Costain share price has climbed 78.45%. It&#8217;s up a mighty 143.82% over two years.</p>


<div class="tmf-chart-singleseries" data-title="Costain Group Plc Price" data-ticker="LSE:COST" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>That kind of performance is always likely to catch the eye, but also triggers my suspicions. Surely it can&#8217;t keep climbing at that kind of speed, can it?</p>



<h2 class="wp-block-heading" id="h-can-the-share-price-keep-flying">Can the share price keep flying?</h2>



<p>Yet the shares don&#8217;t look particularly expensive, trading at 8.52 times earnings. That’s comfortably below the <strong>FTSE All-Share </strong>average of 14.6 times.</p>



<p>Also, Costain is sitting on a £166m net cash pile. That’s almost 60% of its £284m market cap, which adds a layer of security. Better still, it&#8217;s earning a steady stream of interest on the money, although this will fall when the Bank of England starts cutting base rates further.</p>



<p>Its first-half results, published on 21 August, revealed a <em>&#8220;very healthy&#8221;</em> book of £4.3bn following a string of new contract wins.</p>



<p>That&#8217;s important because Costain’s revenues are likely to be bumpy as they rise and fall depending on contract starts and completions. First-half revenues actually dipped 3.8% to £639.3m in the six months to 30 June after it finished the main works at Gatwick station.</p>



<p>Adjusted operated profits nonetheless rose 8.7% to £16.3m. Operating margins jumped 20 basis points to 2.5%. Obviously, that doesn&#8217;t leave much room for error. The board is aware of the risk and is aiming to increase margins to 3.5% in 2024 and 4.5% in 2025. That&#8217;s still tight though.</p>



<h2 class="wp-block-heading" id="h-this-ftse-stock-has-further-to-go">This FTSE stock has further to go</h2>



<p>Lest we forget, Costain has been <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/what-is-market-volatility/">volatile</a> in the past. Its shares crashed more than 80% in 2020 as the pandemic disrupted operations and hit profitability. It also took a £90m hit on two big contracts, the Peterborough &amp; Huntingdon gas compressor and A465. Management subsequently overhauled its contracting processes but bidding for infrastructure projects will always be fraught with risk.</p>



<p>Another issue is that the UK economy is still riddled with uncertainty, as inflation proves sticky, growth slows and potential tax hikes loom. This could hit funds for infrastructure products.</p>



<p>Costain’s shares slumped on 10 September when Dubai-based Al Shafar General Contracting Company (ASGC) sold just over 41.6m shares to institutional investors. That&#8217;s equivalent to 15% of the issued share capital. However, the share price has mostly recovered from that short-term hit.</p>



<p>Costain axed its dividend during the pandemic but restored it in 2023, as this table shows. </p>



<p><img decoding="async" width="720" src="https://s3.tradingview.com/snapshots/t/ThDCbFlH.png"><br>Chart by TradingView</p>



<p>The forecast 1.3% yield isn’t great but given that it’s covered 9.1 times by forward earnings, I&#8217;m optimistic it will increase steadily over time. Costain has just started a £10m <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/share-buybacks/">share buyback</a> too.</p>



<p>Brokers have set an average one-year price target of 117.5p, up 13.53% today. So it probably isn’t the very best share to buy now. I’m expecting plenty more action, but at a slower pace. I already have a large stake in what&#8217;s a relatively small company, so probably won&#8217;t buy more</p>
<p>The post <a href="https://www.fool.co.uk/2024/09/22/up-145-but-still-cheap-with-a-p-e-of-8-5-is-this-the-best-share-to-buy-today/">Up 145% but still cheap with a P/E of 8.5! Is this the best share to buy today?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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