Gamma Communications (LSE:GAMA) surged 16.6% on the day. I own the stock, but the rising share price gives me a real problem. 

Takeover

In a lot of cases, stocks shot up because oil prices fell. That reduces the threat of inflation and lowers the chances of a recession.

This, however, isn’t why Gamma’s share price went up. It’s the result of the firm being the subject of takeover speculation. The company confirmed on Wednesday (8 April) that it’s in talks with potential bidders. And that has investors excited. 

There’s no guarantee anyone will be interested in buying for the firm. But if they do, they’re likely to pay above the current market value. On the face of it, that’s a good thing for Gamma shareholders. But I’m an investor and I’m not pleased about the news. 

Share prices

Despite the recent jump, Gamma shares are still down 29% in the last year. And the stock’s still below the price I bought it at. That gives me an issue. I had been planning on adding to my investment, but that isn’t so attractive with the share price 16% higher. 

I still think it’s undervalued. But if no offer for the company materialises, the stock could fall straight back to where it was before the jump.

The alternative, however, might be worse. If a bid does appear below the price I bought at, I might end up having to sell at a loss.  Obviously, that would be a big disappointment. Not least, because I still think the business is in a really interesting position right now.

Cloud communications

Gamma’s a business-to-business cloud communications provider. In short, it makes company phones work through the internet. 

At the end of the year, the UK’s set to switch off its copper phone network, and a lot of firms haven’t prepared. Those companies will need help. Gamma’s a natural choice for a lot of them to turn to. But it has some big competitors – and they don’t come much bigger than Microsoft. 

The firm can’t match Microsoft’s scale, but it has some unique advantages. These come from owning the telecoms infrastructure. This means the FTSE 250 firm can fix customer issues directly, which Microsoft can’t. And in mission-critical infrastructure, that’s hugely valuable.

What to do?

I like Gamma Communications as a business and the stock still looks cheap to me. But the situation has become tricky. 

Takeover talk’s put the share price in a strange sort of no-mans land. A lot depends on what happens next in terms of offers. This isn’t just a short-term issue. If the company’s sold, the outcome’s permanent.

My hope is that no deal appears. That’s likely to mean the stock goes down – but at least that way I can get back to buying it.

The post Why this FTSE 250 stock surging 16% is bad news for my portfolio appeared first on The Motley Fool UK.

The firm’s update from Tuesday (24 March) isn’t strong. But there are reasons to think the future looks much brighter.

Growth(?)

Gamma’s results are complicated. The headline number of 11% revenue growth is strong, but there’s more to it than this.

The majority of the increase is from recent acquisitions in Germany. And this won’t be repeated going forward. 

The acquired businesses are doing well, achieving 10% organic growth. But they’re only a small part of the overall company.

Source: Gamma Communications Full Year 2025 RNS

As a result, the most meaningful sales growth number is probably between 2% and 3%. And that’s much lower.

The UK part of the company is facing big challenges. The copper network switch off is weighing on revenues and increasing costs. 

That’s why the stock fell 10% after the firm’s results. But while the outlook for 2026 isn’t much better, something big could be on the way.

Up to a point, Lord Copper

The UK switching off its copper phone network at the end of this year is both good and bad for Gamma. But I think it’s more good than bad.

In the short term, it means the end of business line rental and broadband services the firm has provided for years. That’s bad for sales. At the same time, Openreach is increasing line rental prices for remaining customers. That also threatens the firm’s margins.

Eventually, though, companies are going to have to move their phone services to the cloud. And Gamma is the UK leader in this. 

The majority of small businesses still need to switch over. That means the potential opportunity ahead is a substantial one. Companies generally don’t change their providers very often. So the benefits of winning new customers could last for decades. 

Competition

There’s a big change coming and Gamma could well be set to benefit. But the company won’t have things all its own way. 

The big risk is that the firm has to compete with some much larger operators. An obvious one is Microsoft. In terms of competing for cloud customers, Gamma can’t match Microsoft’s scale. But it does have some advantages of its own. 

The most obvious is that it’s able to offer better customer support. This comes with having an established network of channel partners. It’s also the result of owning the infrastructure. That means it can offer the ability to intervene to fix problems in ways that Microsoft can’t.

For small businesses that rely on phone numbers working, this could be hugely important. And that’s why the switch is an opportunity for Gamma.

Time to buy?

The stock is at a five-year low and trading at a price-to-earnings (P/E) ratio of eight. That’s also unusually low for the company. 

As a result, £1,000 is enough to buy 128 shares. And that’s what I’m planning to do when I’m next in a position to invest.

Source: TradingView

Analysts aren’t expecting anything in the way of growth for 2026. But they’re more optimistic further ahead.

That fits with the way I see things unfolding for the company. And that’s why I see the lower share price as an opportunity to consider.

The post £1,000 buys 128 shares in this UK stock that could be set to surge appeared first on The Motley Fool UK.

Such downward volatility is obviously unpleasant. But at the same time, it’s also helped create some tremendous buying opportunities for long-term investors. And as anyone who took advantage of the 2022 market correction saw, the returns can be epic.

Fun fact: since September 2022, the FTSE 250 has generated a total return of 39.3% in less than four years for index investors. But for some stock pickers, the results have been even more explosive.

For example, the shares of Avon Technologies have delivered a 137% total return during this period. Senior delivered a similar performance of 115%. And Goodwin absolutely stole the show with a staggering 750%+ gain!

The question now is, which company in this 2026 correction will be the next Goodwin?

A big winner at a bargain price?

Sadly, there’s no way of knowing for certain which FTSE 250 stocks are on track to deliver a near-9x return over the next four years. But there’s at least one company that institutional analysts have flagged as being seriously underappreciated by the market right now.

That business is Gamma Communications (LSE:GAMA).

Since the start of 2025, the B2B communications specialist has seen its share price compress by over 40%. Subsequently, the stock is now trading at its lowest point since early 2019. But could this be a near-once-in-a-decade buying opportunity?

The experts certainly seem to think so. In a bizarre twist, despite the share price slipping, institutional analysts are overwhelmingly bullish, with eight out of nine recommending the stock as either a Buy or an Outperform with an average share price target of 1,500p – 74.6% higher than where the shares are trading today!

An incoming surge

The biggest growth catalyst for this business is coming in January 2027.

Ten months from now, BT Group will be switching off its legacy copper telephone network (PSTN), forcing hundreds of thousands of businesses to migrate to a cloud-based solution – the very thing Gamma specialises in.

So, why is this FTSE 250 stock still heading in the wrong direction?

While analysts are bullish, it seems investors are reluctant to pull the trigger. After all, BT was supposed to switch off PSTN back in December 2025, but the deadline was extended to 2027. Another delay could mean this incoming growth catalyst might be further away than investors hope.

At the same time, continued weakness throughout the UK economy, particularly for small and medium-sized businesses, has resulted in a reluctance for companies to invest in their communication infrastructure.

These macroeconomic headwinds mean margins have come under pressure. And as a result, short-term investor sentiment has suffered even with explosive long-term tailwinds sitting just around the corner.

So, is this a buying opportunity?

Providing the PSTN switch-off isn’t delayed again, Gamma Communications looks seriously undervalued in my eyes right now. Obviously, it’s not a risk-free investment. But with investors seemingly pricing it as if another delay is inevitable, the stage is set for an awesome potential share price jump over the next 12 months.

That’s why I think Gamma Communications is worth mulling over. And it’s not the only exciting potential buying opportunity I’ve spotted in this correction…

The post FTSE 250 correction: a rare chance to buy cheap shares appeared first on The Motley Fool UK.

Scrolling through the forecasts

I’m talking about Gamma Communications (LSE:GAMA). Over the past year, the stock’s down 32%, yet it’s still in the FTSE 250. As such, it’s not a small stock that we’re talking about for potentially large gains.

The share price is currently 899p. I can see 11 different contributors to the forecast, with the lowest at 1,080p and the highest at 1,820p. A notable mention goes to Barclays, with the team forecasting a price next year of 1,600p.

Based on the average target price of 1,483p, if hit, this would mean a 65% increase from the current level. Even if this average isn’t reached, even the lowest expected price is higher than where the UK stock is right now.

Taking a step back

Before I get into my view, it’s important to understand why the stock has fallen over the past year. A 32% drop isn’t something that can be brushed off!

The business is a cloud telephony provider that sells related technology and software. Unfortunately, demand among small businesses has been weaker due to economic conditions, dampening organic revenue growth.

Further, there’s a current structural shift in the industry related to the UK PSTN switch-off. This process, which involves ending the old copper phone network, has been delayed and has reduced short-term profits. This is because customers replacing old hardware with fibre solutions often generate lower profit margins for Gamma.

Even though these remain risks going forward, an update last month showed that adjusted EBITDA for the full year is expected to fall within the consensus range of £140m to £143m. Therefore, the business is still profitable and doing well, just not at the pace of growth some expect.

Well-positioned

There are plenty of reasons to think the stock could do well in the coming year. The broader shift to cloud communications continues. Gamma is well positioned to benefit from this ongoing move. It’s also seeing strong growth in the German market, and a large number of businesses there aren’t fully on cloud communications, presenting a lucrative opportunity.

Yet while I believe the stock could rally in 2026, I struggle to see the potential for a 65% surge. Where would that comes from? However, I do think the company looks like good value after the price fall, so it’s a stock to consider for investors. From there, the extent of its rebound is anybody’s guess!

The post This FTSE stock is primed to rally 65% according to the experts appeared first on The Motley Fool UK.

Unlikely? Let’s try and find out.

A gift?

Card Factory (LSE:CARD) is a common sight on the UK high street. But in December 2025, the card and gift retailer issued a profit warning. Even with the group positioning itself at the value end of the market, it doesn’t seem to have escaped the impact of reduced disposable incomes. Higher employment costs, stubborn inflation and intense competition haven’t helped either.

But analysts reckon the group’s shares are currently (11 February) 57% undervalued. And with a forward price-to-earnings (P/E) ratio of just 5.7, I can see why they might hold this view. The stock also offers an attractive dividend. Based on amounts paid over the past 12 months, it’s yielding 6.7%. Of course, given the profit warning, there’s a possibility this might be cut. And the group has a relatively short history of paying dividends, so the past isn’t a good guide here.

To try and capture more profit, the group designs, manufactures, distributes, and sells its cards. It also claims this helps it react more quickly to changing tastes.

But the business feels a little old-fashioned to me. It recently bought Funky Pigeon to boost its online offering but sending cards does feel like a thing of the past.

The stock’s also one of the most volatile around. With a five-year beta of 3.1, it means if the stock market moves up (or down) by 10%, Card Factory’s share price will change, on average, by 31%.

Despite its attractive valuation and the impressive 12-month share price targets, I think there are better opportunities to consider elsewhere, in markets with healthier long-term growth prospects.

Such as?

One example is Gamma Communications (LSE:GAMA).

With the world moving away from copper phone lines to cloud-based communications, the telephone group’s likely to be one of the biggest beneficiaries. Its Unified Communications as a Service (UCaaS) offering is currently available in the UK, Netherlands, Spain, and Germany.

Analysts reckon its shares are 67% undervalued. With a P/E ratio of only 9.6, there’s strong evidence to support this view. And as an added bonus, the group also pays a modest dividend. The stock’s currently yielding 2.3%.

But the group’s profit has been impacted by a lack of economic growth and a loss of confidence among its target customer base of small and medium-sized businesses. Also, there’s plenty of competition out there.

And the UK’s plans to shut down its Public Switch Telephone Network (PSTN) in early 2027, is a double-edged sword. Some customers are moving to fibre solutions as a cheaper alternative to UCaaS. Although Gamma does provide this service, it earns a lower margin than on its cloud offering.

However, it operates in an industry where the direction of travel is clear. Of course, the PSTN switch-off might be delayed (it has been before) but, eventually, everything will be in the cloud.

I think the recent pullback in the group’s share price – it’s fallen 33% since February 2025 – could be an excellent buying opportunity. I reckon Gamma Communications is a stock to consider.

The post 2 UK stocks tipped to grow 50%+ over the next 12 months appeared first on The Motley Fool UK.

• Saga – up 353%.
• Goodwin – up 295%.
• Fresnillo – up 462%.
• Ceres Power Holdings – up 108%.
• OXB – up 105%.

But as all experienced investors know, just because a stock’s done well in the past, doesn’t mean it will continue to do so in the future. That’s why institutional analysts are busy hunting down new opportunities for investors to explore in 2026. And right now, the experts have highlighted two FTSE shares with impressive growth potential.

Communication is key

First on the list is Gamma Communications (LSE:GAMA). While often-overlooked, large-scale enterprises often continuously need to communicate both internally and externally. And with old-school phone lines being replaced with cloud telephony, Gamma’s positioned itself to be a leading player in the European unified communications-as-a-service (UCaaS) sector.

Subsequently, the business has evolved into a steady compounder over the years. But in 2025, Gamma shares came under notable pressure. With the firm still heavily reliant on the UK, softer economic conditions saw earnings stumble despite revenues continuing to climb.

This impact has only been amplified by fierce levels of competition from infrastructure incumbents like BT and Vodafone. But with the experts seeing this as a temporary cyclical slowdown, investors may have been a bit too zealous in their selling activity.

So much so that the team at Peel Hunt have recently reiterated a share price target of 1,820p. Compared to where the stock trades today, that represents a 99.7% potential capital gain if earnings momentum is restored – an opportunity worth exploring further.

Data & analytics

RELX (LSE:REL) is another FTSE share that’s seen its market-cap take a hit over the last 12 months, falling by almost 50%!

The business specialises in providing proprietary data access and AI tools used by a variety of businesses, governments, and enterprises. And in areas like scientific research, legal practices, and risk management, the company’s proven to be a mission-critical product for many customers.

However, with the rise of new AI models, investors are growing concerned that RELX’s business could be exposed to disruption. As such, despite the underlying fundamentals remaining impressive, shares of the data vendor have taken quite a beating.

Seeing such volatility isn’t entirely surprising. After all, RELX shares have long since traded at a premium valuation. Yet, the analysts at both Barclays and Morgan Stanley seem to think the market may be getting ahead of itself, issuing share price targets of 3,745p and 3,610p, respectively.

If those projections prove accurate and it’s able to avoid being disrupted by AI, then buying shares today could unlock a potential return of up to 74%!

That’s why, despite the risks, I think this is another FTSE stock worth investigating further in 2026.

The post 2 FTSE shares experts think will smash the market this year! appeared first on The Motley Fool UK.

But not all UK shares have enjoyed spectacular gains. Some top-quality companies have actually slumped in value due to recent setbacks. This leaves eagle-eyed investors with excellent buying opportunities to think about before prices bounce back.

Take Bunzl (LSE:BNZL) and Gamma Communications (LSE:GAMA), whose share prices have toppled during the last 12 months. So what’s been happening recently? And what makes them excellent recovery stocks to consider?

A FTSE 100 faller

Bunzl was once one of the FTSE 100’s most brilliantly boring stocks. It produces and sells essential everyday products, the kind that remain in high demand regardless of economic shocks.

That’s not all. With exposure to different sectors and regions, it can thrive even when one part of the business slows. This resilience — combined with a brilliantly executed, acquisition-based growth strategy — delivered reliable profits growth almost every year.

So what’s gone wrong recently? Bunzl’s share price has slumped 41% over the past year, reflecting tough end markets (especially in North America). This has smacked sales, and — with rising costs also crushing margins — profits have uncharacteristically sunk.

Investor confidence remains at rock bottom after last April’s shock profit warning and suspension of share buybacks. Given the uncertain economic outlook, it’s perhaps unsurprising that dip-buyers are in short supply.

Still, I think this represents an attractive buying opportunity for long-term investors. Today, the FTSE 100 share trades on a forward price-to-earnings (P/E) ratio of 11.6 times. That’s well below the 10-year average of roughly 18, and could drive a price rebound.

Might this happen in 2026? There’s a good chance, in my view, as falling interest rates support its end markets, and the benefits of recent acquisitions filter through to the earnings column. Signs of stabilisation in December’s latest market update have boosted my optimism.

Another top stock to buy?

Gamma Communications has also fallen victim to tough economic conditions over the last year. Its share price has crumbled 34%, as soft demand from UK small-to-medium businesses (SMEs) has hit profits. It’s also suffered from pricing pressures in a competitive market.

The FTSE 250 share helps companies move their traditional phone systems to modern voice and video systems ‘in the cloud’. It’s a hot growth area, but one which could struggle in the near term as the British economy splutters.

But Gamma has exceptional recovery potential further out, in my view. This is supported by its rock-bottom forward P/E ratio — at 9.5 times, this is well below the 10-year average around 26 times. Companies who don’t spend heavily to digitalise their operations tend to get left behind. This could deliver strong and sustained sales growth at Gamma.

Like Bunzl, I think the firm may spring a surprise and rebound sooner than expected. The UK plans to shut down its copper-based phone network next January, which could spark a wave of customers switching to Gamma’s systems during 2026.

The post After crashing up to 41%, are these the best UK stocks to buy? appeared first on The Motley Fool UK.

That’s actually true of the stock market in general right now. But there are a couple of familiar names from the UK’s secondary index that make it onto my buying list for February.

Gamma Communications

Gamma Communications (LSE:GAMA) is a company I think is in the right place at the right time. The B2B cloud communications firm has two main things going for it. 

One is the upcoming switch off of the UK copper network and the other is its expansion into Germany. I think both mean the firm’s growth prospects are better than its share price suggests.

Gamma’s in a good position, but it won’t have things all its own way. It faces competition from no less a company than Microsoft – and that’s a risk for investors to take very seriously. 

A shift to cloud-based communications will likely involve voice calls going through Teams. And businesses can just buy packages from Microsoft instead of going through Gamma. 

It’s worth noting though, that the FTSE 250 firm is doing well on this front. It reported a 12% increase in the number of voice-enabled Teams users in its most recent six-month update.

There are good reasons for this – it offers a more reliable service than Microsoft and its bundled minutes can be cheaper for larger teams. At today’s prices, I’m looking to add to my investment. 

Vistry

Like Gamma, I think Vistry (LSE:VTY) might be on the edge of something big. The firm’s shifted away from traditional housebuilding and into partnerships at what looks like exactly the right time.

The UK government has allocated £39bn for affordable housing projects over the next five years. And the FTSE 250 company has a huge advantage over its rivals in terms of accessing this. 

Vistry has well-established relationships with affordable housing providers, which should put it in a much stronger position than its rivals. The trouble is, some might say its position is too strong.

Competitors are arguing that the firm’s advantage is unfair. They object that it has too much of a head start in terms of early insights into funding decisions from its work with Homes England.

The idea that Vistry might not be able to make the most of its advantage is a genuine risk. And that could result in future earnings being lower than I’m expecting in terms of the opportunity ahead.

Right now though, the stock’s trading at a lower price-to-book (P/B) multiple than Bellway, Barratt Redrow, or Taylor Wimpey. Considering its advantages, I think that’s a buying opportunity for me.

The time’s now

Both Gamma and Vistry look good value to me. But I’m not just buying because I think they’re cheap – I can see real sources of earnings growth for both companies in the near future.

In both cases, I can add to my existing investments while maintaining a diversified portfolio. So that’s what I’m planning to do in February.

The post As the FTSE 250 closes in on new highs, here are the stocks I’m buying in February appeared first on The Motley Fool UK.

Historically, the best returns come from buying shares when prices are low. So while it’s impossible to know when the next crash is coming, investors should probably be on the lookout. 

Equity returns

There’s no magic formula that can tell you exactly when is the best time to buy shares. But that doesn’t mean investors shouldn’t try to make the most of the information that is available to them.

Data from JP Morgan Chase shows a strong negative correlation between valuations and returns. Put simply, returns have been best when the S&P 500 has traded at lower price-to-earnings (P/E) ratios.

Source: JP Morgan Guide to the Markets Q1 2026

The correlation isn’t perfect – especially over a short timeframe. But it becomes much stronger over a five-year period and this is something investors should pay attention to.

At the start of the year, the S&P 500 was trading at a level corresponding to an average five-year return of around 3%. But if the multiple falls 20%, that historic figure doubles.

What to do?

This might make it look as though the best thing to do is to wait until a better buying opportunity presents itself. But I don’t think that’s a particularly good idea.

The S&P 500 as a whole might be historically expensive, but this isn’t true of stocks around the world. UK shares, for example, are actually trading at unusually low levels at the moment. 

Source: JP Morgan Guide to the Markets – UK Q1 2026

It’s also worth noting that it isn’t even true of every stock within the S&P 500. A lot are actually trading at historically low multiples right now.

The best opportunities might come from taking advantage of low prices. But investors don’t have to sit around and wait for a stock market crash.

Looking for opportunities

One example from my portfolio is Gamma Communications (LSE:GAMA). At a price-to-earnings (P/E) ratio of 13, the stock is trading at a level well below where it’s been in the past.

The reason I own it, though, isn’t just because it’s historically cheap. I think the company is in a really nice position to benefit from the UK’s upcoming shift away from copper phone lines.

There’s a danger the UK might delay switching off its copper network (it’s happened once before) and this wouldn’t be a good thing for Gamma. And that’s the main risk with the stock right now.

Sooner or later, though, businesses are going to have to move to cloud communications – which is the firm’s speciality. So even if it doesn’t come this year, I think the long-term picture looks good. 

Financial freedom

Achieving financial freedom involves two things. The first is being able to put money aside and the second is finding ways to earn a good return on that capital. 

When it comes to the second, the record of history is very clear. The best returns from the stock market come from buying when valuation levels are unusually low.

Given this, a stock market crash can present life-changing opportunities. But I don’t think investors have to wait for something dramatic to happen to find stocks to buy.

The post How a stock market crash could help set you up for lifelong financial freedom appeared first on The Motley Fool UK.

I’ve done some research to dig out stocks with the best chances of a recovery this year. My work shows that City analysts think their share prices will double in value or more during the next 12 months.

I too am optimistic these cheap stocks could rebound. Want to know why I think they’re worth considering right now?

Gamma Communications

Gamma Communications (LSE:GAMA) helps companies switch to cloud-based systems, allowing them to modernise how they handle voice, video and messaging communications. It’s a hot growth area, but one that’s currently underperforming amid tough economic conditions.

Yet analysts remain overwhelmingly positive on the stock. Of the eight studying the FTSE 250 firm, seven consider it a Strong Buy, with the remaining one rating it a Buy.

Even the least optimistic of this grouping’s predicting a sharp price rebound over the next 12 months. They’re tipping a 21% rise, to £10.80. The most bullish number cruncher, meanwhile, is expecting Gamma shares to reach £18.20, a whopping 104% uplift.

Helped by falling interest rates, demand for its services might rebound strongly as businesses boost IT-related investment. Gamma will also benefit approaching the shutdown of all copper-based phone services in the UK next January.

Card Factory

Card Factory‘s (LSE:CARD) another FTSE 250 company trending lower over the last year. Not even its focus on the value end of the greetings market has protected its share price. But could it be about to turn higher?

Seven brokers currently have ratings on the retailer. And their views on the company are largely positive — five class it as a Strong Buy, with two giving it a Hold rating.

This is reflected in their price forecasts for Card Factory shares. One analyst thinks the price will reach 170p during the next year, up 153% from today. Even the least bullish forecasts predicts a healthy 12% increase, to 75p.

A prolonged downturn in the UK economy could hinder any such price recovery. But aided by recent international expansion, I think Card Factory could bounce back strongly this year.

JD Sports Fashion

JD Sport Fashion (LSE:JD.) is another casualty of tough market conditions. In particular, it’s struggled to tackle weak consumer spending in its major US region. Fierce competition on main street and online haven’t helped it either.

City analysts aren’t overwhelmingly positive in their view of the FTSE 100 share. But opinions are undeniably more positive than negative. Out of 17 rating the stock, seven consider it a Strong Buy or Buy. The remainder have a Hold rating, with not a single one giving it a Sell.

The most optimistic JD share price target is 200p, up 146% from today. The most pessimistic is 85p, suggesting a 5% increase.

I think there’s a good chance of a robust rebound as analysts expect. Conditions are improving in North America — this week it reported “improved” like-for-like sales there. And the broader athleisure fashion segment is tipped for further broad growth.

The post 3 cheap UK shares tipped to grow 104% (or more) in 2026! appeared first on The Motley Fool UK.