Stock market results are coming thick and fast in February, and many eyes are on the FTSE 100. But I wouldn’t overlook the FTSE 250 in the hunt for cheap shares. Here are three mid-cap companies with highly-anticipated updates.
Redrow
Redrow (LSE: RDW) should post first-half results on 9 February. Like most of the housebuilding sector, its shares slumped in 2022. But since October, we’ve seen a steady rise.
Redrow seems to think its own shares are worth buying, having completed a £100m share buyback in January. On 3 July 2022, the company had £288m net cash on its balance sheet. But that’s a long time ago in economic terms, and doesn’t reflect the soaring inflation and rising interest rates of the second half of the year.
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I’ll mostly be looking at the company’s outlook on its cash situation. In the long term, I’d rate the housebuilding business as one of the most reliable there is. But in the short term, especially as we head into recession, cash flow could be paramount. And any weakness could send the Redrow share price recovery into reverse.
But on a forecast price-to-earnings (P/E) ratio of under seven, Redrow could be a good buy for long-term investors.
Primary Health Properties
We have full-year figures from Primary Health Properties (LSE: PHP) due on 22 February. And the past 12 months have not been kind to the shares. We’re looking at a 20% fall, and we haven’t seen the 2023 recovery that shares in general have been enjoying.
Primary Health is a Real Estate Investment Trust (REIT), and that sector is firmly out of fashion right now. But the company’s business isn’t really dependent on the property market as so many REITs are.
No, it invests in healthcare premises in the UK and Ireland, which it lets on long-term leases. With much of its income secured by government contracts, I’d say there’s good long-term visibility here. And that income has been translating into progressive dividends, with a forecast yield of 6%.
There must be some risk from the NHS crisis. And I can see investors continuing to shun real estate and keeping away. But it could be a nice long-term income investment.
Jupiter
Jupiter Fund Management (LSE: JUP) shares have been regaining ground, but are still well down along with financial stocks in general.
The fund management business has long been a favourite of mine. I’d rarely invest in its funds, but I do like buying its shares. It can be cyclical, and tends to show more volatility than the general stock market. But to me, that means it’s a good one to buy when the shares are down.
Despite the long-term growth of the UK stock market, the big investors still seem hung up on short-term performance. And when investors are selling shares, anything related to investment management often suffers a bigger sell-off
I think we could easily see more short-term volatility. But I’m seeing another tempting income prospect here. Full-year results are due on 24 February.
