In fact, at 267.5p per share, Greencore’s share price is now up 39% over the last year. And earlier in the session it struck its highest level since January 2020.

Can it keep hitting new heights though? Here’s why I think the answer could be ‘yes’.

Tasty results

Greencore manufactures a wide range of chilled, frozen and ambient foods. And today it raised its profit expectations after “favourable summer weather and new business wins” boosted third-quarter sales.

For the 13 weeks to 27 June, total sales came in at £511.1m. This represented annual growth of 9.9%, and pulled revenues growth for the first nine months of the year to 7.6%.

Volumes (excluding new business wins) rose 1.9%, ahead of the broader grocery market which increased 0.7%. Greencore said that “volume growth was encouraging across most categories, particularly in sandwiches, sushi and ready meals“.

Revenues also benefitted from price increases of 3.1%.

Thanks to “strong volume momentum and disciplined cost management“, the business said profit conversion exceeded expectations during the quarter. It now expects to generate adjusted operating profit of £118m-£121m for the 12 months to September. That’s up from £97.5m in fiscal 2024.

Three is the magic number

Tuesday’s upgrade marks the third time in recent months that Greencore’s upgraded its earnings projections. In May, it raised its profit forecasts to £114m-£117m, thanks to stellar first-half trading. That was up from April’s upwardly revised estimate of £112m-£115m.

Greencore’s thriving as changing consumer habits drive growth in the convenience foods market. Last quarter, it launched 168 new products to capitalise on this, including new poke bowls and strawberries and cream sandwiches.

I’m personally not taken by the idea of strawberries in sandwiches. But there’s no denying the appeal of Greencore’s pre-prepared quality foods with shoppers who lack the time, energy or knowhow to cook themselves.

But Greencore’s impressive profitability isn’t just about soaring sales. It also reflects improving margins as automation improves and cost-cutting rolls on. These measures helped operating margins rise 160 basis points in the first half of this year, to 4.9%.

Momentum share

All this isn’t to say the foodie doesn’t face notable dangers of course. Today, it flagged up “the uncertain UK economic environment” along with “continued inflationary pressures, particularly in protein and labour“.

But I’m confident Greencore’s operational excellence and vast market opportunity could still drive its share price skywards in 2025 and beyond. Analysts at Future Market Insights believe the convenience food market will grow at an annualised rate of 7.2% over the next decade.

Through its planned acquisition of Bakkavor — another FTSE 250 heavyweight in the fresh prepared food market — the firm’s scaling up to seize this huge growth opportunity too. I strongly believe Greencore shares are worth serious consideration today.

The post This FTSE 250 stock hit 5-year highs today! Can it keep soaring? appeared first on The Motley Fool UK.

Even in 2024, with a market-cap approaching $1trn, Buffett and his team achieved a 25.5% return across their investment portfolio – almost five times what the FTSE 250 delivered in the same period. And yet, one British business from the UK’s flagship growth index – Greencore (LSE:GNC) – vastly outperformed the ‘Oracle of Omaha’ with a return greater than 100%!

Profiting from sandwiches

Being a convenience food manufacturer isn’t a high-margin enterprise. However, that hasn’t stopped management from seeking novel methods to boost profitability. Specifically, the company has been rolling out artificial intelligence (AI) and automation solutions to optimise production and reduce spending. And the impact of this has been laid bare in its latest interim results for six months leading to March.

Underlying operating margins jumped from 3.3% to 4.9%. That may not seem like a massive difference, but when scaled to almost £1bn of revenue, it’s enabled Greencore’s earnings to skyrocket by 60% to £45.2m. At the same time, free cash flow generation has returned to positive territory by £37.8m, translating into a 78.6% cash conversion ratio, up from just 36.7% year on year.

Put simply, the business is firing on all cylinders. So much so that it’s just begun the process of gobbling up a key competitor (Bakkavör) in a £1.2bn acquisition deal to become the largest chilled convenience food business in the UK.

In 2024, shareholders reaped an enormous 105% return – four times more than Buffett achieved. And so far in 2025, the shares are already up 15%, with another 12% gain on the horizon if analyst forecasts prove accurate.

Can Greencore continue to win?

This boring but lucrative company certainly sounds like the type of stock Buffett has historically hunted for. After all, sandwiches and other chilled foods don’t tend to grab headlines, making Greencore an under-the-radar value stock in 2024.

Today, the business is definitely turning a few more heads, especially with its plans to dominate its target markets. And if management continues to hit key milestones in its expansion strategy, more growth could be just around the corner.

Bakkavör has several complementary product lines that Greencore will be able to offer to leading UK retailers including Tesco, Sainsbury’s and Marks & Spencer. Not to mention, Bakkavör’s international presence in the US and China opens the door to new markets and opportunities. However, mergers of this scale can also be quite problematic.

If the deal is approved by regulators and shareholders, it’s expected to be completed before the end of 2025. But the process of integrating and optimising operations will likely take far longer, especially for a deal of this scope. Should integration prove to be more challenging than expected, margins could face significant pressure, undoing a lot of the progress that’s been made to date.

In other words, just because Greencore beat Buffett in 2024, that doesn’t mean the stock will do the same in 2025. I’m cautiously optimistic about the long-term trajectory of this business. But having experienced the chaos large acquisitions can potentially cause with other investments, I’m keeping this firm on my watchlist for now.

The post Meet the UK stock that beat Warren Buffett in 2024! appeared first on The Motley Fool UK.

However, that’s balanced by the patience that investors often need. Sometimes businesses with low valuations remain forgotten and overlooked for years.

In addition, there’s always the risk that an already cheap stock will just keep getting cheaper. So it’s possible to end up holding shares that grind lower over days, weeks and even years.

Sometimes it pays to hold and wait

It’s enough to make the dourest of value investors cry into their beer. But the waiting game can be worth it. An old stock market saying goes something like: “Patient money often wins in the end.”

That agrees with another expression: “Scared money often loses.” So a value investor who gives up waiting or cuts a loss might sell just before a stock turns around. That would be another reason to cry into beer. 

So value investing takes skill, faith, luck and a certain disposition. It’s not for the faint-hearted and there’s an increased risk of watered-down ale!

Nevertheless, one eye-catching success recently has been Greencore (LSE: GNC). The company operates as an international manufacturer of own-brand convenience foods for supermarkets and others.

It’s not an exciting business or a stimulating sector. So that’s maybe why the stock flatlined near its lows for a year through most of 2023.

There was plenty of time for investors to buy the stock — and a long wait for those buying at the end of 2022 when it first hit the bottom.

However, in the end, Greencore started releasing updates saying trading was ahead of the market’s lacklustre expectations. Then it kept repeating the trick at steady intervals.

The stock took off and began a long climb as earnings and the depressed valuation improved. With the share price near 199p, it’s around 110% higher than it was at the beginning of 2024.

So that value investment worked out for some. But what about opportunities for 2025? 

Could these zeros be next year’s heroes?

Right now, I reckon several shares measure up as being unloved. For example, the international home improvement retailer Kingfisher delivered a profit warning recently and the share price dropped.

However, the dividend seems to be safe for the time being and City analysts expect better earnings next year. Nonetheless, the sector is cyclical and those analysts could be wrong leading to further weakness ahead for the stock.

IG Design is another business that’s been down on its luck and now carries a low-looking valuation. But any good news on earnings may get the shares moving up again. 

However, nothing’s certain and one risk is that the company is another operating in a cyclical sector.

Housebuilder Vistry is also cyclical and the share price crashed during the autumn. But demand for housing remains strong. So it’s easy to imagine the company having its time in the sun again.

All three of these businesses strike me as worthy of investors’ further research and consideration now.

The post 3 value shares for investors to consider buying in 2025 appeared first on The Motley Fool UK.

Today, I’m touching on two mid-caps whose share prices have more than doubled in 2024 to very little fanfare. Are they buys for me?

Tasty gain

Convenience food manufacturer Greencore (LSE: GNC) isn’t the sort of stock to get the blood pumping. That is, until one checks its recent performance. As I type (13 December), the Dublin-based business has seen its share price rise by 122% in 2024 alone.

This appears to be down to a good, old-fashioned trading recovery. Helped by an earlier decision to exit low-margin contracts, the £1bn-cap announced a 36.1% jump in annual pre-tax profit to £61.5m in the 52 weeks to 27 September.

Such a good run of form has also allowed Greencore — which supplies supermarkets and convenience stores with sandwiches and salads — to lower its debt, initiate share buybacks and reinstate dividends. Those holding the stock on 9 January will be entitled to a 2p per share payout.

Will this purple patch continue?

Despite additional labour costs as a result of October’s UK Budget, management seems bullish on the outlook for earnings. Adjusted FY25 operating profit is already predicted to be within the top half of analyst expectations (which are £98.1m-£107.1m).

Then again, no investment is risk-free. Considering how many office staff are likely to buy what it produces, anything that might interfere with getting to work strikes me as a potential obstacle. Think extended periods of poor weather, transport issues or, yes, another global pandemic. The enduring popularity of working from home is something to bear in mind too.

At nearly 16 times earnings, the valuation is also looking a bit rich for me. I wonder what might happen when those profit upgrades stop coming. With this in mind, I’m not desperate to open a position today.

Precious metal boom

Another FTSE 250 stock that’s delivered the goods this year has been Hochschild Mining (LSE: HOC). Lagging Greencore only slightly, its share price has jumped 115% in 2024. As well as being a mighty-fine result for its owners, this also shows that big winners can come from any sector.

Hochschild’s purple patch is largely the result of soaring precious metal prices. Both gold and silver have been on excellent form as investors have looked for safe havens following a raft of elections and conflicts in Europe and the Middle East.

Conveniently, the £1.2bn cap has also managed to bring its Mara Rosa mine in Brazil into commercial production at exactly the right time.

Dirt cheap

Trading on a forecast price-to-earnings (P/E) ratio of just six, one could say that Hochschild shares still look dirt cheap, especially if prices keep rising.

However, we know that mining is difficult, unpredictable work and the company doesn’t have any say in assigning value to what it digs up. There hasn’t been a dividend since September 2022 either. So there probably won’t be any compensation for investors if the shares give up some of their gains next year.

With so much out of its control, I’m happy to sit on the sidelines.

The post Shhhh… These FTSE 250 stocks have quietly more than doubled in 2024 appeared first on The Motley Fool UK.

AB Dynamics

What it does: AB Dynamics designs, manufactures and supplies advanced testing, simulation, and measurement products to the global transport market. 

By Paul Summers. Having had my finger over the ‘sell’ button for several months, I’ve now disposed of my position in vehicle testing firm AB Dynamics (LSE: ABDP).

To be clear, this isn’t because I think the company is doing anything wrong. Indeed, it’s been a profitable business for many years and continues to boast a robust balance sheet. Conceivably, AB could also do very well as autonomous driving becomes a reality.

No, the reason I’ve sold is purely down to the valuation. Despite only growing revenue by 5% in the first half of FY24, the stock still trades at an eye-watering 31 times earnings at the time of writing. In the absence of a near-term catalyst for trading to improve, I can’t see the share price moving significantly higher for a while.

Whether I come to regret my decision remains to be seen. As things stand, however, I can see far better value elsewhere in the market. 

Paul Summers has no position in AB Dynamics.

Close Brothers Group

What it does: Close Brothers is a UK merchant bank providing motor finance, business lending and asset management services.

By Roland Head. I recently sold all of my shares in Close Brothers Group (LSE: CBG). The bank’s share price has slumped this year as a result of the UK financial regulator’s investigation into historic motor finance commission payments.

The outcome of this investigation and any potential liability is not yet known, but Close Brothers has already suspended its dividend as part of a plan to raise £400m in additional surplus capital.

While I believe the company will recover from the impact of this investigation, I think it may take longer than expected.

Looking further ahead, I wonder if regulatory changes will put pressure on the future profitability of motor lending, which is a major part of the bank’s loan book.

After this year’s falls, I think the business might be cheap at current levels. However, increased uncertainty and the lack of a dividend mean that it’s no longer a good fit for my portfolio.

Roland Head does not own shares in Close Brothers Group.

Greencore

What it does: Greencore is a leading international manufacturer of convenience foods.

By Alan Oscroft. I sold my shares in Greencore (LSE: GNC), and it might sound like it’s for a dumb reason.

Essentially, it’s because I can’t remember why I bought them.

And now I look again, I can’t make a good enough case to buy them. And if I wouldn’t buy a stock, I don’t think I should hold it. Especially when I see others I like better.

The Greencore valuation isn’t so bad. But a forecast price-to-earnings (P/E) ratio for 2024 of 14 doesn’t look that cheap, and I’d say it doesn’t offer much safety margin.

And the dividend yield of around 1.5% doesn’t exactly make it look like a top income stock.

Admittedly, forecasts would lift the dividend above 3% by 2026, and would drop the P/E to 10. But when there are plenty of FTSE 100 yields of 6% and more, it doesn’t appeal.

So, now the stock has recovered a bit, it was time for me to find somewhere else for the money.

Alan Oscroft has no position in Greencore.

ITV

What it does: ITV is a broadcaster operating terrestrial and digital channels in the UK and also provides production facilities and services.

By Christopher Ruane

Sometimes even a cheap-looking share can get cheaper. ITV (LSE: ITV) had long looked cheap to me. But as it fell to around 56p per share in February I added to my existing holding.

Annual results including a maintained dividend and share buyback helped lift the shares up to 75p over the following months.

I decided to sell a few of my shares to lock in some profits. I continue to hold most of them as I still think the business is undervalued considering its profitability, extensive audience and ongoing high demand for production facilities.

So why did I sell some of my shares?

Potential is one thing but tying money up for years on end has a cost. ITV does face real risks, from a traditional business in long-term decline to increasing digital competition. By taking advantage of a post-results jump in the share price, I was able to turn some paper gains into actual ones.

Christopher Ruane owns shares in ITV.

Supermarket Income REIT

What it does: Supermarket Income REIT owns and leases retail properties. Around 75% of its rent comes from Tesco and Sainsbury’s. 

By Stephen Wright. I’ve recently made the decision to sell my stake in Supermarket Income REIT (LSE:SUPR). There are a couple of reasons for this.

Chief among them is the firm’s rapidly growing share count. The number of shares outstanding has increased tenfold since 2018. 

That’s not a good thing – it means each share’s ownership in the company has decreased by 90%. And as an investor, I want to own more of a business over time, not less.

To some extent this is understandable. REITs often use equity as a means of financing, so I’m not surprised the share count has gone up.

I haven’t sold the stock just because the share count has increased, though. I’ve moved on because of how much it’s increased.

Over the same time period, Primary Health Properties – another UK REIT – has seen its share count roughly double. That’s much less dramatic, which is why I’ve moved my cash to there.

Stephen Wright owns shares in Primary Health Properties.

The post 5 stocks that Fools have recently sold appeared first on The Motley Fool UK.

There isn’t any share that is actually recession-proof. But some will surely be more resistant than others. Today, I’m looking at two that I think have safety characteristics.

Soapy safety?

The PZ Cussons (LSE: PZC) share price is still depressed since the pandemic. We saw a mini recovery in 2021, as sales of the firm’s handwashing and sanitising products got a boost.

But that didn’t last. And we’re looking at a 12-month decline of 13%. So, Cussons is not exactly looking like pandemic-resistant safety, I admit. So why might it be recession-resistant?

Much of the weakness is surely down to the few years of falling earnings the company recorded before Covid arrived. And when something is already struggling, it’s likely to be hit harder by a general downturn.

Refocus

The refocus does seem to be paying off, with earnings growth returning in 2021. And, perhaps more importantly, the dividend was lifted by 5% after suffering a 30% cut in 2021.

That’s only a small rebound. But I find any dividend recovery at such an early rebuilding stage encouraging.

For the year ended May 2022, PZ Cussons says it expects full-year, like-for-like revenue growth of 3%. And that’s with 7% in the fourth quarter.

Forecasts put the dividend yield at 3%, which is still modest. And there’s still some way to go for the company to get back fully on track. So there is clearly risk here. But with a decent outlook heading into a likely recession year, I think PZ Cussons could be a long-term dividend buy.

Convenience food resilience?

Convenience food manufacturer Greencore (LSE: GNC), meanwhile saw earnings collapse in 2021. And its share price went with them. This time, we’re looking at a 12-month fall of 24%.

Forecasts suggests there’s a strong recovery on the way. Based on earnings for the year to September 2021, the stock is on a trailing price-to-earnings (P/E) ratio of 26. But analysts reckon that could halve this year, and keep on dropping over the next two years.

The dividend was canned in 2020, but forecasts suggest it will be back this year and could reach a 5% yield by 2024.

Q3 trading

The third quarter brought a pro-forma revenue increase of 26%, with 31% over the nine months. That’s against a tough prior year. But even compared to 2019, we saw a 14% rise for the nine-month period.

Greencore says it expects “adjusted EPS of between 9.2p and 10.0p“. On the current share price, that suggests a P/E of around 10. That’s even lower than analyst forecasts.

Again, we’re looking at a tentative recovery for a company that has suffered. And there’s no guarantee the upswing will continue, especially not heading into the current economic winds.

But again, I think there’s a safety aspect here, from the company’s position in the business of food to go. I’m holding.

The post 2 recession-resistant stocks to buy right now appeared first on The Motley Fool UK.

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Airtel Africa 

What it does: Airtel Africa provides telecommunications and mobile money services in sub-Saharan Africa. 

By Royston Wild. Demand for telecoms services remains largely unchanged during all points of the economic cycle. Therefore, it’s my belief that Airtel Africa (LSE: AAF) could be a top growth stock for June as inflation rises and recessionary risks grow.

City analysts think Airtel’s earnings will rise 12% in the current financial year (to March 2023). They think profits growth will accelerate to 16% next year too. 

And so at today’s prices, the FTSE 100 share trades on a bargain-basement forward price-to-earnings (P/E) ratio of 8.4 times. 

I don’t just think Airtel’s a great buy for these uncertain times, though. Its focus on the fast-growing markets of Africa provides it with exceptional long-term revenue opportunities. Product penetration remains low across both the telecoms and financial services industries in its markets. Meanwhile, personal wealth levels are rocketing and population levels are rising strongly too. 

Pre-tax profits at Airtel leapt 75.6% in the financial year to March, the latest financials this month showed. These came in at a forecast-beating $1.2bn. I expect the Footsie business to continue impressing as its customer base balloons. 

Royston Wild does not own shares in Airtel Africa. 

Rolls-Royce

What it does: Rolls-Royce is a multinational civil aerospace, defence, and power systems company based in the UK.

By Dylan Hood: The Rolls-Royce (LSE:RR) share price has struggled ever since the pandemic first hit. However, the firm recently announced a trading update that contained some encouraging metrics. For FY2021, gross margins increased 23.4% compared to FY2020, leaving the company profitable for the first time since the pandemic’s onset over two years ago.

The firm is also making encouraging steps in its plan to rebuild its balance sheet, and has committed to achieving positive free cash flow by Q3 of 2022.

Investors have already been reacting positively to this news, with the price of Rolls-Royce shares climbing over 6% throughout May. While still under the £1 mark, I believe now could be a great time to open a position in my portfolio for future growth.

Dylan Hood does not own shares in Rolls-Royce.

Softcat

What it does: Softcat provides IT infrastructure solutions. Its areas of expertise include cloud computing, data, and cybersecurity.

By Edward Sheldon, CFA. Softcat (LSE: SCT) shares have experienced a significant pullback since September 2021 and I think this has presented an attractive buying opportunity.

A recent trading update showed that the tech company still has plenty of momentum. Indeed, the group advised that for the quarter ended 30 April 2022, it generated double-digit year-on-year growth in revenue, gross profit, and operating profit. It added that it now expects operating profit for the full year to be “slightly ahead” of its previous expectations.

Meanwhile, after the recent pullback, the stock’s valuation now seems quite reasonable. At present, the forward-looking P/E ratio here is about 27, which is not high in my view, given the company’s track record, growth potential, high level of profitability, and strong balance sheet.

Of course, if future growth is disappointing, the stock could underperform. All things considered, however, I like SCT’s long-term risk/reward profile.

Edward Sheldon owns shares in Softcat.

Ceres Power

What it does: The Sussex-headquartered firm is a world leader in metal-supported solid oxide fuel cell technology.

By Dr. James Fox. The hydrogen industry has enormous potential and that’s why I’m keeping a close eye on Ceres Power (LSE:CWR).

The UK-based fuel cell developer is yet to turn a profit. However, revenue is growing. Ceres reported a 44% increase in revenue and other operating income in 2021, reaching £31.7m.

As such, it currently has a price-to-sales revenue of around 40. That’s not cheap, but equally this also reflects the sector’s potential.

Ceres licences its energy technology to individual manufacturers, reducing costs relating to the building of manufacturing facilities. It also has lucrative partnerships with Bosch and Doosan.

Doosan is preparing for a soft launch of its 10kW SOFC product this year and will open a 79,200sq metre plant in 2024. With production being scaled up, 2022 could be a transformative year for the firm.

And with the share price falling over the past 12 months, it looks like a good time to add this stock to my portfolio. 

James Fox does not own shares in Ceres Power.

Petrofac

What it does: Petrofac designs, builds, manages and maintains oil, gas, and renewable infrastructure internationally. 

By Michelle Freeman. The recent windfall tax announcement may have made headlines for the oil & gas giants like BP and Shell, but it also created an instant demand for oil & gas infrastructure services. 

Why? Because the ability to offset investment spend against the new levy means that right now, plenty of UK-based projects will have been given a huge business case boost.  

But getting the go-ahead is only part of the battle. They’ll also need to be able to spend the money – and that’s going to lead to a spike in demand for the next few years at least. 

Petrofac (LSE:PFC) is one of a few companies that are well positioned to benefit from this upturn – alongside the wider trend globally as infrastructure spend returns with the high oil and gas prices. 

The best part for me, though: it’s not a one-trick pony, having also diversified nicely with its complementary renewables infrastructure arm. Win-win! 

Michelle Freeman does not own shares in Petrofac.

Howden Joinery Group

What it does: Howden Joinery is the UK’s largest vertically integrated trade kitchen supplier within the home improvement industry.

By Zaven Boyrazian. Renovating or constructing new kitchens may not sound like a lucrative investment opportunity. Yet Howden Joinery (LSE:HWDN) seems to disprove that. Looking at its latest trading update, the firm delivered an impressive 21.8% revenue growth – almost twice what it’s historically achieved. And that’s during its low season.

With its peak trading period just around the corner, the stock looks primed for a bounce-back after its recent tumble in the general market turmoil. There are valid fears of a slowdown risk due to rising inflation and a consumer spending crunch. However, given management continues to pursue its expansion plans in the UK and France, there appears to be a high degree of internal confidence that I like to see.

From what I can see, Howden Joinery is delivering its fastest growth in years, yet its share price is trading near a 52-week low. That, to me, looks like a fantastic buying opportunity for my portfolio.

Zaven Boyrazian does not own shares in Howden Joinery Group.

Hikma Pharmaceuticals 

What it does: Hikma develops, manufactures and markets a wide range of high-quality generic, branded and in-licensed pharmaceutical products. 

By G A Chester. Hikma Pharmaceuticals (LSE: HIK) has been out of favour for a while. Its shares are down around 30% over the last 12 months. 

The latest knock to market sentiment came in May. Hikma downgraded its guidance on the expected performance of its generics division in 2022. 

Management’s previous guidance was for revenue growth of 8%-10% over 2021’s revenue of $820m and an operating margin of 24%-25%.The new guidance lowered revenue to $710m-$750m and the operating margin to around 20%. 

The reason was a change in expectations of the launch timing of a generic medicine, shifting its revenue and profit contribution from the second half of 2022 to the first half of 2023. 

I don’t think this damages Hikma’s long-term growth story. The recent resignation of chief executive Siggi Olafsson — to pursue other opportunities — adds further uncertainty. But I reckon the weak share price represents a great opportunity for me. 

G A Chester does not own shares in Hikma Pharmaceuticals 

Greencore

What it does: FTSE 250 firm Greencore supplies convenience foods to retailers and food-to-go outlets all over the UK.

By Roland Head. Convenience food specialist Greencore (LSE: GNC) is bouncing back strongly from the pandemic. The firm reported sales up 34% to £771m during the half year to 25 March, thanks to “strong growth in food to go”.

I think the company’s growth is set to continue. City forecasts suggest Greencore’s pre-tax profit will hit £63.5m in the 2022 financial year and £80.6m next year.

The business is expanding beyond its historic strength in sandwiches to offer foods such as salads, sushi, ready meals and soups and sauces. Over time, I think this strategy is likely to support steady long-term growth.

Of course, larger retailers such as supermarkets are tough customers. They’re likely to keep pressure on Greencore’s prices and margins.

Today, Greencore shares trade on 12 times 2022 forecast earnings, falling to a forecast P/E of nine for 2023. That looks good value to me.

Roland Head does not own shares in Greencore.

Plus500 

What it does: Plus500 provides online trading services in Contracts for Difference (CFDs) across a range of asset classes.

By Charlie Carman. Benefitting from the rise in retail trading activity over the pandemic, the Plus500 (LSE: PLUS) share price has soared nearly 90% since the start of the UK’s first lockdown in March 2020.

The FTSE 250 fintech company’s latest quarterly results revealed impressive 33% year-on-year increases in revenue and EBITDA. Admittedly, Plus500 experienced a 35% decline in active customers compared to Q1, 2021. However, average revenue per user rocketed by 104%, which sufficiently offsets any potential concerns for me.

Plus500 continues to expand its global operations. The Israel-based business recently obtained a new licence in Estonia, improving its core product offering in European markets. In addition, its acquisition of EZ Invest Securities signalled an entry into the substantial Japanese retail trading market.

It seems elevated stock market volatility is here to stay for the time being. I believe Plus500 shares should perform well in this macroeconomic environment. I’d buy in June.

Charlie Carman does not own shares in Plus500. 

Dr. Martens

What it does: Dr. Martens is a luxury brand that sells footwear. Its boots are a cultural staple and its best selling item.

By John Choong – With stagnating retail sales data over the last quarter, I was originally bearish about Dr. Martens (LSE: DOCS)’ prospects. However, its stellar FY 2022 results blew my expectations out of the water. As a result, its share price surged by 18%.

Being a luxury brand, Dr. Martens has managed to pass its costs onto customers without negatively impacting its top and bottom lines. In fact, its profit margins saw an increase to 19.9% for the year, along with strong sales figures. This has pushed its free cash flow in the right direction too.

Additionally, management expects a strong FY23, citing “huge headroom for growth in key markets”, as well as a strong wholesale order book with fixed factory prices. The latter allows the firm to hedge against inflationary pressures, which is crucial given the macroeconomic environment. 

Therefore, I’m optimistic about the future of the company, and will be looking to buy shares in the near future.

John Choong has no position in Dr. Martens

Wizz Air

What it does: Wizz Air is a Hungary-based airline, specialising in the operation of short-haul flights around Europe, North Africa, and the Middle East.

By Andrew Woods. The improvement in the firm’s passenger numbers in recent months is quite staggering. For May, Wizz Air (LSE:WIZZ) flew 4.1m people, with a load factor of 84.2%. This was up from 3.6m and 83.4% in April. These passenger figures for May and April also equate to 390% and 542% increases, compared to the same periods last year.

As pandemic travel restrictions are relaxed, the airline is expecting a very busy summer. It has been recruiting cabin crew at pace to try and keep up with demand, but many flights have already been cancelled. This disruption could subside once the business hires more employees.

Wizz Air recently signed a memorandum of understanding with the Saudi Arabian government to explore the potential development of routes throughout the country. This would greatly increase the company’s presence in the Middle East.

In addition, a cash balance of €1.3bn suggests that the firm is in decent financial shape and well positioned for returning to higher capacity in the coming months.

Andrew Woods does not own shares in Wizz Air.

The post Top British growth stocks to buy in June appeared first on The Motley Fool UK.

A bolt from the blue

2022 has so far been a year to forget for Trifast’s (LSE: TRI) share price. The business — a giant in the manufacture of screws, bolts, and other types of fastenings — has plunged to within a whisker of penny stock territory. At 111p per share, it’s down 31% since January trading began.

I think this recent collapse makes Trifast’s share price hard to ignore. City analysts think the firm will follow a 78% earnings rise in this financial year (to March 2022) with a 27% year-on-year increase. This leaves Trifast trading on a forward price-to-earnings growth (PEG) ratio of 0.4 for the upcoming period. Any reading below one suggests that a UK share could be undervalued.

Trifast makes its products for a wide range of applications like consumer electronics, white goods, and automotive. It could therefore see sales slump if the cost of living crisis continues to worsen. However, as a long-term investor I find the business highly attractive. And I believe its share price today makes it something of a steal.

I like the fact that its end markets should grow strongly over the long haul on account of soaring emerging market wealth. I also like Trifast’s commitment to global expansion through acquisitions (in August it acquired US distributor Falcon Fastening Solutions for £6m to boost its North American footprint). And I think demand for the company’s fastenings could surge on the back of the electric car revolution too.

Another nearly penny stock I’d buy

I’d also use Greencore Group’s (LSE: GNC) plunge towards the 99p penny stock limit as an opportunity to buy. A forward price-to-earnings (P/E) ratio of 13.8 times doesn’t look shockingly cheap on paper. But recent market volatility has driven the food producers’ dividend yield through the roof. For 2022, the readout sits at a healthy 4.8%.

Any fresh pickup in the pandemic could threaten the recent recovery at Greencore. The food to go specialist saw revenues tank during Covid-19 lockdowns as people stayed at home. But as things stand, the outlook is pretty rosy for the business (City analysts think earnings here will rise 11% in 2022).

I’d buy Greencore because changing consumer habits mean the ‘food on the move’ marketplace is tipped to resume its strong growth of the last decade. Analysts at Mordor Intelligence think the ready-to-eat segment will expand at a compound annual growth rate of almost 5% between 2022 and 2027. And pleasingly Greencore is investing heavily to help it capitalise on this opportunity (it’s spending £30m to increase capacity at three of its manufacturing sites following recent contract wins). I think its plunge to 116p could make the company too cheap for me to miss.

The post 2 nearly penny stocks to buy before the Stocks and Shares ISA deadline! appeared first on The Motley Fool UK.

Lockdown easing boosts sales

Food-to-go specialist Greencore Group (LSE: GNC) isn’t out of the woods just get as the Covid-19 crisis continues. But as things stand, trading conditions are improving rapidly at the food producer as people slowly get mobile again. Food on the move revenues at the firm were up 123% in the seven weeks from March 26, latest financials showed, and down just 14% from the same period in 2019.

Analysts at Lumina reckon the food-to-go segment will grow by 32% year-on-year in 2021 as the industry resumes its striking pre-coronavirus growth rates. And Greencore plans to invest £30m at three manufacturing sites over the next two years to meet customer demand. I think this makes it one of the best UK shares to buy for this market, despite its challenges. It is also investing heavily in automation to boost profits by bringing down costs.

On the right page

A stream of positive news on the jobs market bodes well for recruiters like PageGroup (LSE: PAGE). Latest data from the Office for National Statistics, for instance, showed that there were 862,000 vacancies in the UK between April and June. This was the highest level for 15 months. Conditions are steadily recovering in labour markets across the globe too.

PageGroup itself delivered record results in 17 of its markets during the second quarter, it announced recently. The UK support share upgraded its full-year profits expectations as a result. I’m expecting another blowout set of numbers when half-year results come out on Monday, 9 August, making now a great time to buy the business. Remember though, that fierce competition could damage the company’s ability to capitalise on improving market conditions.

One of the best UK tech stocks to buy

I also think Kape Technologies (LSE: KAPE) is a great UK tech share to buy this August. The problem of cybercrime has exploded in recent years as the internet has steadily taken over our lives. The outbreak of Covid-19 made the issue worse amid the e-commerce boom and the rise of remote working. Take hacking as an example. Office for National Statistics data showed a 55% year-on-year rise in the number of hack attacks in Britain during the 12 months to March 2021.

A quick Google search will show that hackers are causing carnage all over the globe too. This is where Kape comes in as a creator of security software that protects users’ privacy. Revenues at the business rocketed 60% in the first six months of 2021. I think it’s a great buy despite the threat of a potential high-profile product failure that might damage demand for its software. And I like the company’s transformative acquisition of Webselenese in March. It significantly boosts the company’s online presence and gives it a chance to supercharge organic sales.

The post ISA investing: 3 of the best UK shares to buy in August appeared first on The Motley Fool UK.

Alan Oscroft: Greencore

My pick is Greencore (LSE: GNC), the food-to-go specialist, whose share price plunged on interim results day. The company reported a £7.9m pre-tax loss for the first half, in a business still devastated by the Covid-19 pandemic. The market hated it.

But Greencore expects to turn things round by the end of the year, and the liquidity is there. If the company can get back to 2019 earnings levels, we’d be looking at a P/E of around nine. I think that’s cheap. I rate Greencore a buy, and I’ve added it to my ISA shortlist.

Alan Oscroft has no position in Greencore.

Roland Head: IG Group Holdings

Online financial trading firm IG Group Holdings (LSE: IGG) has delivered a bumper performance over the last 12 months. Last year’s market crash was followed by a stock trading boom that’s seen the company’s profits double.

Markets are pricing in a return to more normal levels of trading over the coming year, and IG’s share price has been in retreat recently.

This sell-off has left IG shares trading on 13 times forecast earnings for the year ahead, with a dividend yield of 5%. Although IG faces some challenges this year, I think the stock offers good value at this level.

Roland Head owns shares of IG Group Holdings.

G A Chester: Fresnillo 

Silver and gold miner Fresnillo (LSE: FRES) recently reiterated its 2021 production guidance, despite continuing uncertainty presented by Covid-19 in Mexico. 

This FTSE 100 giant, with seven operating mines, is a low-cost producer and has a strong balance sheet. Furthermore, I think its pipeline of new mines and projects, together with a series of improvement programmes, bode well for the longer term. 

I reckon recent weakness in the share price is giving me an opportunity to buy in to the world’s largest primary silver producer at an attractive level. That the dividend yield is now above 2% is an added bonus. 

G A Chester has no position in Fresnillo. 

Harshil Patel: ITV 

ITV (LSE:ITV) looks well placed to benefit from a global economic recovery. Advertising revenues are rebounding from last year, and the majority of ITV’s shows are back in production.  

Several strategic and cost-cutting measures are on track. This is allowing ITV to invest in the acceleration of its strategy to become a digitally-focused media and entertainment company. 

ITV is a quality consumer cyclical stock that offers double-digit margins and return on capital. It’s cash generative and shares trade at an undemanding valuation. It also offers a forecasted dividend yield of 4%. Overall, I’d make it a top stock pick for June. 

Harshil Patel does not own shares in ITV.

Edward Sheldon: Experian

My top British stock for June is Experian (LSE: EXPN). It’s the world’s latest credit data company.

Experian posted a solid set of results for the year ended 31 March recently. For the year, revenue was up 7% on the back of strong demand for its analytics services while earnings per share were up 4%.

Looking ahead, the group said that it expects organic revenue growth in the range of 7% to 9% for FY2022. It noted that it had made a strong start to the year.

Experian is not the cheapest stock, and its valuation does add some risk to the investment case. Overall, however, I think the stock has a lot of appeal right now.

Edward Sheldon owns shares in Experian.

Kirsteen Mackay: Macfarlane 

Macfarlane (LSE:MACF) produces protective packaging for businesses. It mainly has a UK focus, with a growing presence in Europe. A sustained growth in ecommerce is increasing demand for packaging and Macfarlane counts both Hobbycraft and Halfords as customers. Then there’s the climate initiative increasing pressure for sustainable solutions, from which Macfarlane stands to benefit.  

The MACF share price has risen 88% in five years. It has a price-to-earnings ratio of 18, earnings per share are 6p and it doesn’t offer a dividend yield. I’d consider buying MACF shares as I think it has good growth opportunities ahead. 

Kirsteen Mackay has no position in Macfarlane.

Andy Ross: Sylvania Platinum  

Sylvania Platinum (LSE: SLP), the South African platinum group metals miner has fallen from its year high. I think it’s a really great company and see the share price weakness as an opportunity. The company has a tailwind behind it because what it mines is very likely to be used in electric vehicle batteries in the future.  

On top of that, there is a belief amongst some investors that we might be in a commodities supercycle. Even if that’s not the case, I back the shares to do well. It’s a low cost miner, which should be good for margins.  

As always with a growing miner, there are risks to bear in mind. Notwithstanding that though, Sylvania Platinum is my top stock for June.  

Andy Ross does not own shares in Sylvania Platinum.  

Rupert Hargreaves: Glencore

Commodity prices have been ripping higher this year. For example, the price of copper is up around 29% year-to-date. I think Glencore (LSE: GLEN) could benefit from this trend.

Not only does the company produce commodities such as copper, but it also trades them.

This trading business can be highly profitable. As the world’s largest trading business, I expect the demand for Glencore’s services to increase in line with the rising demand for commodities.

The most considerable risk facing the company is the potential for a sudden fall in commodity prices. This could have the opposite effect on the business.

Rupert Hargreaves does not own shares in Glencore.

Manika Premsingh: Volex

Power cords and cable assembly solutions provider Volex (LSE: VLX) has more than doubled its share price in the past year, driven by positive stock market sentiment and its own robust performance. According to its latest trading update, full year revenue for the 52 weeks ending April 4, 2021 will be ahead of market expectations.

For this reason, I am looking forward to its results due in June. I’d also check details of its exploding demand from electric vehicle (EV) customers, which can be a potentially big growth driver for the future.

I would also look at the impact on debt from its acquisition of Turkey’s DE-KA, which may be risky, if high, at a time of continued economic uncertainty.

Manika Premsingh has no position in Volex.

Stuart Blair: Diageo

Diageo (LSE: DGE) is an alcoholic beverages company, with a portfolio of over 200 brands. Its share price has already recovered strongly since last year, and I believe further gains are likely.

Indeed, the company recently announced an improved profit forecast for 2021 and decided to restart its return of capital programme. As the company is now actively returning more money to the shareholders, it’s clearly in a strong financial position.

Diageo’s extensive product range and market-leading position should also help protect it against the risk of another economic slowdown. This is why Diageo is my top stock for June.

Stuart Blair owns shares in Diageo.

Christopher Ruane: Renalytix AI

I recently bought into Renalytix AI (LSE: RENX) despite its limited commercial history. I was impressed by prospective new business opportunities including a US government deal, as well as clinical study results.

The company specialises in kidney diagnostics. That is a significant market with resilient customer spending. The company’s AI-enabled technology gives it a compelling position. As revenues grow I expect Renalytix’s profits to benefit from the scaleability of its technology.

One risk is that competitors could develop their own solutions and reduce Renalytix’s competitive advantage. 

Christopher Ruane owns shares in Renalytix AI.

Royston Wild: Bloomsbury Publishing 

I reckon Bloomsbury Publishing (LSE: BMY) could be a top UK stock to load up on this June. In fact I’d get my skates on and buy it before the release of full-year results on Wednesday, 2 June. 

The Harry Potter publisher has a history of lifting its profits projections in recent times. And it was at it again last time it updated the market with a pre-close update in March. Bloomsbury has benefitted from the uptick in reading during Covid-19 lockdowns. But I reckon the company’s high-quality stable of titles — along with its foray into academic publishing — will keep the top line fizzing. 

Royston Wild does not own shares in Bloomsbury Publishing.

Dan Peeke: HSBC

My favourite UK share for June 2021 is HSBC (LSE:HSBA).

I mentioned in an article towards the end of April that HSBC’s price-to-book ratio was 0.6. It still is, and I think that’s a bargain. On top of this, the company is beginning to focus on its Asian ventures. This is where more than 80% of its 2019 profits came from, so I think that’s the perfect approach.  

The company’s withdrawal from the US and difficulty generating revenue thanks to low interest rates are setbacks, but I’m still confident that it’ll make a good long-term investment.

Dan Peeke doesn’t own shares in HSBC.

Paul Summers: BlackRock World Mining Trust

My top stock for June is the BlackRock World Mining Trust (LSE: BRWM). As it sounds, this invests in a basket of the biggest miners in the world. It also pays an attractive dividend (currently 3.3%). 

Naturally, investing in the cyclical commodities market won’t suit all investors. Some may also baulk at the 1% ongoing charge. Even so, this is arguably the least risky way of getting exposure to the huge demand for metals such as copper from electric vehicle manufacturers in the years ahead.  So, despite rising 80% in the last year alone, I think there’s more upside ahead. 

Paul Summers has no position in the BlackRock World Mining Trust

Nadia Yaqub: Premier Foods

I think things are turning around for Premier Foods (LSE: PFD). Its recent full-year results were impressive, which saw a strong increase in revenue and operating profit. Even net debt has fallen to a manageable position.

The key thing to note is the reinstatement of the dividend. The company will pay its first income payment in 13 years. Clearly the firm’s financial position is improving. It’s also ramping up growth with new product launches. I reckon this is a sign of good things to come and the stock could rise further.

Nadia Yaqub does not own shares in Premier Foods

Ben Hargreaves: Polymetal International 

With concerns over inflation causing a degree of volatility in the market, I think holding shares of a solid dividend earner like Polymetal International (LSE:POLY) is a good idea. At 5.7%, the dividend is healthy and the business itself is well-positioned, as a miner of precious metals.  

The bulk of the company’s revenue comes from gold mining and the price of the metal is currently up 11% over the last year. In addition, the company is in the top five silver producers worldwide whilst its price has increased 62% in the same time period. Though the company’s shares can fluctuate on the price of precious metals, I believe the strong dividend still provides an adequate cushion to make it a solid investment. 

Ben Hargreaves does not own shares in Polymetal International.

The post Top British stocks for June appeared first on The Motley Fool UK.