While the FTSE 250 started the first day of March rising 1.13%, it closed the week down 0.7% at 19,047.70p as Brexit uncertainty heightened in the run up to a week of crucial votes.
The following week – 11-15 March – however, saw it stage an impressive turnaround. Boosted by MPs voting against Theresa May’s EU withdrawal deal and a no-deal Brexit, the index gained 2.33%, closing the week at 19,491p, outperforming the 1.7% rise of its blue-chip peer, the FTSE 100.
For the FTSE 250, Restaurant Group [RTN]
was the highest weekly riser with its shares surging 12.2% – its biggest rise in two years – after full-year results from the Frankie & Benny’s owner matched expectations thanks to a steady performance from its recently acquired Wagamama business.
RTN stock - biggest FTSE 250 gainer in the w/c 11/03
However, it wasn’t all good news for food companies. Greencore [GNC]
fell 3.6% on 15 March due to being downgraded from ‘buy’ to ‘hold’ by Berenberg Bank, which warned of slowing consumer spending amid political and economic uncertainties. Bakkavor [BAKK] also fell 3.5% throughout the week due to being downgraded from ‘hold’ to ‘sell’.
Three of the index’s key stocks – Just Eat, John Laing Group and St James’s Place – have meanwhile faired well in previous weeks, with each showing some strong potential for the future:
Just Eat has been on a bumpy road for the last few months. After losing its CEO in January and being ousted from the FTSE 100 late last year, the food delivery service is staging a much-needed comeback, despite a dip in momentum last week.
The company’s stock has recorded some strong gains in 2019, gaining 26.5% as of the week ending 15 March. But while it’s recovered a lot of its losses from last year, the stock is still trading 16.5% off its 2018 peak of 890p. And after reporting a near 50% year-over-year rise in revenue in its 2018 results, Just Eat will however re-join the FTSE 100 index as of 18 March.
Just Eat share price gain in week ending 15 March
In 2018, the company – currently valued at around £5bn – recorded 26 million active users, which drove order growth up by 28% to £221m, in turn, boosting its revenue by 43% year-over-year to £779m.
Credit Suisse is bullish on the stock, having set a ‘buy’ rating and a 970p price target, which represents a 27.8% upside based on current levels; whereas, Barclays and Morgan Stanley have trimmed their weighting to ‘equal’ over concerns that Uber Eats was becoming more aggressive with its UK expansion.
While competition in the food delivery space intensifies against the likes of Deliveroo and Uber Eats, Just Eats’ global expansion is gobbling up market share as iFood, a joint venture in Brazil, is projected to be worth circa £760m and over 80% of the market, according to UBS.
The British infrastructure investment firm’s stock has also staged a rally last week after releasing full-year results that highlighted “strong value creation”, prompting Peel Hunt to once again reiterate a ‘buy’ rating on the stock as it raised its price target to 451p from 400p.
The announcement on 5 March, which had seen profit before tax rise 57% from 2017 to £296.6 million, and earnings per share increase to 63.1p from 31.9p, which sent the shares up 2.5%, just 0.20p below its all-time -high.
John Laing Group has impressively grown its book value per share at a CAGR of 24.6%, with the ratio currently standing at 3.23, the stock has returned 21.86% to shareholders, which outperforms both industry and sector levels, which come in at 9.95 and 11.71 respectively.
With a market cap of £5.4bn and a strong share price performance that’s level with the FTSE 250, the stock of wealth management firm St James’s Place’s is pegged as a potential buy for long-term investors.
The stock yields a 4.64% forward dividend and although shares have gained around 13% so far this year, having dropped off over somewhat post disappointing fourth quarter results in the second half of 2018, now could be the time to buy, particularly because the stock’s current pay-out ratio stands at 141.79%.
STJ shares' current payout ratio
Despite the global equity sell-off late last year, the firm did see strong growth in 2018, helping it raise the dividend by 12.5% for 2019. St James’s Place had increased its dividend 12.51% year-over-year in 2018 to 0.48p.
Henderson Global Investors’ Job Curtis told Citywire’s Investment Trust Insider: “I expect SJP to deliver a dividend yield of 5% over the next 12 months. It has experienced impressive growth in assets under management in recent years with its network of some 2,500 tied advisers.”
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