The FTSE 100 fell 3.38% yesterday. Meanwhile FTSE 250 stocks did even worse. The mid-cap index fell 3.98%. Psychologically, many investors find it hard to press the ‘buy’ button at times like this. However, history shows that investors who boldly buy during a stock market crash often make impressive returns in the long run.
Yesterday, I wrote about five cheap FTSE 100 stocks. Today, I’m looking at five FTSE 250 stocks I’d be happy to buy at today’s depressed prices.
This FTSE 250 stock is a dividend hero
Primary Health Properties owns modern primary health facilities in the UK and Ireland. Reliable, largely government-backed income means it’s been able to increase its dividend each and every year for the last 23 years. Management anticipates another uplift this year. At the current share price, the prospective yield is a solid 4%.
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Primary Health is a long way from being the hardest hit stock in the 2020 market crash. Its shares are down 7% since the start of the year. However, I wouldn’t turn my nose up at the modest discount, given this is such a reliable business.
2 FTSE 250 stocks at multi-year lows
The shares of A.G. Barr (actually just demoted to the FTSE 250) and National Express have both fallen a lot further than Primary Health’s this year. They’ve slumped 36% and 75% respectively. In fact, they’re currently at multi-year lows.
Ordinarily, I’d have expected Barr and National Express to have shown some resilience during an economic downturn. However, the fallout from the coronavirus pandemic has been far from ordinary.
Lockdowns smashed sales of Barr’s usually reliable soft drinks brands, including Irn-Bru, Rubicon and Funkin. Sales suffered from the complete closure of the hospitality sector. The company also saw a material reduction in on-the-go consumption.
City analysts expect Barr to post a fall in earnings of around 20% this year. However, I think a rating of 16 times next year’s forecast improved earnings, with a prospective 3.5% dividend yield, represents great value for long-term investors.
National Express’s operations, both at home and abroad, were absolutely hammered by lockdowns and travel restrictions. So much so, analysts expect the company to post a loss for the current year. However, the stock’s trading at just 5.5 times next year’s earnings on forecasts of a partial recovery. This is far too cheap in my book.
Another big faller
ITV, which has just been demoted from the FTSE 100, is another big faller this year. Its shares are down 60%. Due to the pandemic, it not only suffered an unprecedented fall in advertising revenue, but also had to temporarily shut its production arm due to lockdown restrictions.
This is another stock where I reckon this year’s forecast earnings fall (40%), and low multiple (just six times forecast 2021 earnings) don’t reflect what I think are considerably brighter long-term prospects.
A double-discount FTSE 250 stock
AVI Global Trust is my final pick. It invests in companies and funds when it calculates their prices are at deep discounts to the intrinsic value of their assets.
Its shares are down a modest 6% this year, but trade at a discount of over 10% to the book value of its portfolio of investments. Furthermore, it estimates the book value is at a discount of over 30% to the true intrinsic value. I think there’s deep value on offer here that could reward patient, long-term investors.
