I am not alone when I say I can not get enough of the FTSE250 at the moment. It’s up 6.5% so far in 2024, including 2.5% last week. Like me, investors are clearly optimistic about what the index has to offer.
I think a lot of FTSE 250 stocks can go unnoticed. But for an investor like me who wants to buy undervalued stocks that other investors overlook, this is perfect.
Here are two stocks I own. I should have some money left this month and I plan to increase my position in both. I think investors should consider buying some stocks as well.
ITV
Broadcasting giant ITV (LSE: ITV) is one of my favourite companies in the FTSE 250. My position in the stock is up 19.4% so far. But I only bought shares in April and view ITV as a long-term investment.
The share price has risen by 33.3% since the beginning of the year. Nevertheless, I think the share is fairly valued at a price-earnings ratio of 16. Add to that the dividend yield of 6%.
The company’s share price has suffered a slump over the past five years due to the decline of traditional broadcasting. Factors such as rising inflation have led to ITV’s customers cutting back on spending. The rise of streaming service providers such as Netflix And Amazon Prime also poses a threat.
To counteract this, ITV is continuing to expand its digital capabilities. The company has made good progress with its streaming platform ITVX. In the first quarter, digital advertising revenues rose by 14%.
At the same time, the company has been pushing ahead with its cost-saving programme, aiming to save £150 million between 2019 and 2026. At the end of last year, it had already achieved £130 million in annual savings. It expects to achieve the full £150 million by 2025, a year earlier than planned.
Safestore
I also own Safestore (LSE:SAFE). Unlike ITV, it has had a rather poor start to the year, falling 9.8% so far.
But with the stock currently trading at just 6.6 times earnings, I think they’re too cheap to pass up. That’s well below the index average of 12.
In addition, it yields 3.8%. That’s far from the highest payout in the index. But it’s still above the average of 3.3%. The payout has increased 300% over the last decade.
The company’s margins have been squeezed in recent years by inflation and rising debt servicing costs. This has forced Safestore to raise its prices, leading to falling occupancy rates. If the Bank of England decides to delay interest rate cuts, this could lead to a further decline in the Safestore share price.
But we see that the real estate market is slowly starting to send positive signals again. The value of Safestore’s real estate portfolio has increased in recent results. The company has also highlighted the impressive progress it is making on its expansion plans. The coming months could be volatile. But I am still interested in adding to my position.
The post I’m loving FTSE 250 shares right now! I’m buying more shares in these two appeared first on The Motley Fool UK.
Further reading
John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool’s board of directors. Charlie Keough has positions at ITV and Safestore Plc. The Motley Fool UK has recommended Amazon, ITV, and Safestore Plc. The views expressed on companies mentioned in this article are those of the author and may therefore 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.
Motley Fool UK 2024
