Some shares in the FTSE 250 index look particularly attractive to me right now. Especially if I’m preparing for the next bull market. And that’s where my focus is right now.
The two FTSE 250 shares that I’d buy today both have market capitalisations of around £1bn today.
A FTSE 250 top pick
First, I’m looking at Moneysupermarket.com (LSE:MONY). This comparison website business looks attractive in the middle of a cost-of-living crisis. As food and energy bills continue to rise, I’d expect households to put a greater focus on cutting costs and saving money.
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That bodes well for Moneysupermarket, in my opinion. Last year, it helped its users to save an estimated £1.6bn of their household bills.
It recently reported a good trading performance with earnings up by 10% in the six months to 30 June. This was driven by a jump in sales for its travel insurance products, following a return to more holidays and trips post-covid.
Bear in mind that an economic recession could impact demand for travel next year. More money going towards bills could mean less money available for holidays.
Also, the energy comparison market has been closed in recent months and the company expects that to be the case for the rest of the year.
Impressive metrics
That said, its strategy of buying smaller websites and efficiently integrating them into the brand looks promising. Last year it made several acquisitions including leading cashback site Quidco.
Overall, I reckon it’s a quality business with a return on capital employed of over 25% and profit margin of over 20%. It even pays a market-leading 6% dividend.
Its share price has fallen by 15% over the past year along with the rest of the market. But I reckon it could be a great opportunity to buy these quality shares for my Stocks and Shares ISA today, in preparation for the next bull market.
Printing dollars
My next FTSE 250 top pick that I reckon could double over the coming years is 4imprint (LSE:FOUR). Like Moneysupermarket, 4imprint is a profitable company. But that’s where the similarities end.
4imprint is a marketer of promotional products, mainly in the US. Businesses and organisations buy its pens, bags and other products to use for marketing campaigns.
What’s so special about this business? Sales and profits have doubled over the past five years. Stellar performance has seen its share price grow by 30% a year over the past decade. That’s enough to turn a £2,000 investment into a whopping £27,500. Impressive.
More recently, it reported that customer demand is at record levels and trading momentum remains strong. As such, it should reach its long-standing sales target of $1bn this year.
Bouncing back
Profits took a hit during the pandemic but it has since experienced a bounce-back. That said, an economic slowdown could affect sales over the coming months. The US central bank has embarked on a journey of higher interest rates to tackle surging inflation. That typically leads to higher business costs, potentially leaving less investment for promotional activities.
Overall though, this company looks well-managed and has a good track record over many years. I’d certainly be happy to buy some shares today.
