I’m on the hunt for FTSE 250 shares. The index is home to some of the most exciting companies out there.
Two in particular have caught my eye. However, I’m wondering if now is the time to buy.
Ready for take-off?
First up, I’m contemplating buying some shares in low-cost airline group easyJet (LSE: EZJ). It’s been a turbulent spell for the business. The pandemic took its toll. Yet since then, it’s posted a solid recovery. It’s up just shy of 20% in the last year. The stock jumped 25% in the last month alone.
With that, there’s certainly a case to be made for buying easyJet shares. The business has released some strong results lately, including its full-year update on 28 November. For the year, revenue grew 42% to £8.2bn, fuelled by higher prices and improved capacity. As a result, headline profit before tax was £455m.
That said, an issue facing easyJet is inflation. Rates at levels not seen for years and a cost-of-living crisis have seen consumers batten down the hatches and cut spending. However, as a budget airline, I see easyJet in a strong position to benefit. With its package holidays business growing profits by 221%, this is clear evidence.
It’s not out of the woods just yet. And while it’s hedged a large chunk of its fuel for the next year, with ongoing conflicts in Ukraine and the Middle East there’s always the risk that prices could skyrocket. Inflation saw costs grow significantly for FY23. This could be a further issue in the upcoming year.
That said, these are short-term problems. And as an income investor, news of a dividend is what I like to see. I’m tempted to buy.
Primed for growth?
I’m also keeping close tabs on Games Workshop (LSE: GAW). Its share price has climbed an impressive 43% in the last 12 months. As such, I recently opened a position in the Nottingham-based manufacturer.
To be fair, its impressive performance should come as no surprise. The last eight consecutive years have seen the business deliver sales and profit growth.
I’m also a fan of the passive income it’ll provide. A yield of 4.2% tops the FTSE 250 average. Games Workshop only uses “truly surplus cash” to pay shareholders.
The miniature games industry has blossomed into a lucrative market in recent times, which has attracted the attention of some major names. As a result, players such as Disney have now entered the space. I’d expect competition to continue ramping up.
As with easyJet, inflation has also had an impact on the business. It’s managed to pass on costs, but this may not last.
That said, Games Workshop has a loyal customer base. It’s also efficient at keeping consumers in its ecosystem. On top of that, it has major plans to diversify. The largest of these is its TV deal with Amazon. This will see its Warhammer franchise exposed to hundreds of millions of potential new customers.
Time to buy?
I’ll be adding to my position in Games Workshop with any spare cash I have. As for easyJet, I’m leaving it on my watchlist. There’s too much volatility surrounding the stock at the moment. I’ll be reassessing over the next few months.
The post These 2 FTSE 250 shares have been soaring! Should I buy them right now? appeared first on The Motley Fool UK.
Like buying £1 for 51p
This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
Is the easyJet share price set to soar in 2024?
Is the easyJet share price primed for take-off?
The easyJet share price is falling again! Is it now a red hot buy?
7 shares that Fools have been buying!
With a spare £500, I’d invest in these 2 UK shares
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Charlie Keough has positions in Games Workshop Group Plc. The Motley Fool UK has recommended Amazon and Games Workshop Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
