The FTSE 250 is down 2.8% over one year and up 2.9% over five years. So the index really hasn’t performed for investors. Of course, that’s not to say individual stocks haven’t outperformed.
Nonetheless, the economic backdrop is changing. Interest rates are set to start falling, in theory bringing capital back to stock markets and reducing debt burdens, while the UK economy has proven relatively resilient.
So should I be looking to the FTSE 250 to deliver strong returns in 2024? Well, there certainly could be some bigger winners. Below, I’ve take a look at some beaten-down stocks. Will they recover?
Hargreaves Lansdown
Hargreaves Lansdown (LSE:HL.) shares look cheaper than they’ve ever done. The forward price-to-earnings (P/E) — based of earnings per share (EPS) estimates — now sits at just 12.8 times.
However, it’s clearly not offering the growth that it once did. I’m more bullish than the below consensus estimates suggest, noting more positive retail investor activity in recent months.
I’m currently holding my stock in Hargreaves Lansdown. I think the company needs to do more to ensure it doesn’t lose market share to newcomers like AJ Bell. For some investors, Hargreaves’s fee structure is just too large.
And while its customer service is very strong, I’m currently waiting for a $3.5bn stock to be added to the platform. They said it would take three weeks.
2024
2025
2026
EPS (p)
59.69
58.93
61.72
P/E
12.8
13
12.4
Crest Nicholson
One of my first investments, and one of my worst investments, Crest Nicholson has performed very poorly in recent years amid the cladding crisis, the removal of the help-to-buy scheme, and rising interest rates.
This really is a firm in the doldrums. Could things improve? Well, the EPS data below isn’t overly convincing, and it may take time. Nonetheless, there remains an acute shortage of housing in the UK and, in the long run, I’d expect well-run developers to come back stronger.
2023
2024
2025
EPS (p)
14.49
11.29
15.88
P/E
14.2
18.3
13.1
Aston Martin
Aston Martin is among the most volatile stocks on the index. The company was outperforming expectations at the beginning of 2023 and then supply chain constraints contributed to the share price falling towards the end of the year.
Investors may be concerns by the earnings forecast. Aston Martin isn’t expected to turn a profit until 2026. However, I certainly believe it’s an attractive investment.
That’s because the car maker is focusing on paying down debts, and because companies in this luxury space trade at very high multiples. Ferrari, for example, is trading around 47 times earnings.
2024
2025
2026
EPS
-27.94
-7.25
8.75
P/E
n.a.
n.a.
21.8
Close Brothers Group
Close Brothers Group has performed very poorly over the past year as its Winterflood financial planning and investment service unit has continued to struggle amid considerable headwinds in the equity trading market. This led to a £2.5m loss in Q3 2024.
However, using the consensus estimates below, it’s among the most attractive investment opportunities I’ve come across. Earnings are expected to grow throughout the medium term and it’s only trading at 5.48 times forward earnings. It’s certainly an investment I’d consider if I had the capital.
2024
2025
2026
EPS
98.51
111.39
126.5
P/E
5.48
4.85
4.26
The post Could these beaten-down FTSE 250 stocks deliver magnificent returns in 2024? appeared first on The Motley Fool UK.
Should you invest £1,000 in Hargreaves Lansdown right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Hargreaves Lansdown made the list?
See the 6 stocks
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
Best British dividend stocks to consider buying in February
Hargreaves Lansdown vs AJ Bell: these FTSE 250 stock surged, but which is best?
£10K in savings? I’d aim for £383K in shares and £20K a year of passive income
A once-in-a-decade chance to buy these brilliant FTSE stocks at bargain prices?
2 UK shares that could surge in 2024 if the Bank of England cuts rates
James Fox has positions in Aston Martin, Crest Nicholson Plc, and Hargreaves Lansdown Plc. The Motley Fool UK has recommended Hargreaves Lansdown 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.
