3 of my favourite FTSE 250 bargain shares for September!
The FTSE 250‘s risen sharply in 2024. But many of the index’s top stocks remain massively undervalued as we approach the end of summer.
I’m hoping to have some extra cash to invest in my Stocks and Shares ISA or in my self-invested personal pension (SIPP) in September. So I’m looking for the best stocks to buy to get maximum bang for my buck. Here are three of my favourites.
Babcock International
Like many other defence stocks, Babcock International‘s (LSE:BAB) enjoyed solid share price gains in 2024. Yet at its current price of 529p per share, the business still looks dirt cheap.
City analysts think earnings here will soar 42% this year, leaving the company dealing on a price-to-earnings growth (PEG) ratio of 0.3. A reading below 1 implies a stock’s undervalued.
Earnings are booming across the defence sector as global rearming gathers pace. Babcock saw organic sales and underlying operating profit rise 11% and 34% respectively during the 12 months to June.
The FTSE 250 firm’s confident of making further progress too, and has predicted “mid-single-digit average annual revenue growth” over the medium term.
Supply chain issues could threaten these forecasts. But on balance, I think owning the defence giant could yield big returns.
Bluefield Solar Income Fund
Bluefield Solar Income Fund (LSE:BSIF) shares continue to be impacted by the threat of higher-than-normal interest rates. However, I’d argue that this danger’s reflected in the cheapness of the fund.
At 108.6p per share, the renewable energy play trades at an attractive 17% discount to its estimated net asset value (NAV) per share of 131p. They also trade on a forward price-to-earnings (P/E) ratio of just 7.5%.
Finally, Bluefield shares boast an enormous 8.2% dividend yield for this year.
Operating solar farms can be a frustrating business during cloudy conditions when power activity can dip. What’s more, keeping photovoltaic panels and associated hardware up and running can be an expensive business.
But this doesn’t curb my appetite. I invest for the long term and I believe Bluefield looks in good shape as demand for clean energy soars.
TBC Bank Group
Banking giant TBC Bank Group‘s (LSE:TBCG) experienced stunning profits growth in recent years as the Georgian economy’s ballooned.
Pleasingly, wealth levels in the Eurasian country are tipped to keep surging too, which should keep demand for financial services moving higher. The International Monetary Fund (IMF) predicts its GDP will rise 5.7% and 5.2% in 2024 and 2025 respectively.
Industry rival Bank of Georgia‘s financial update underlines the massive opportunity this creates for financial services companies. Its adjusted pre-tax profit jumped 11% in the three months to June as its loan book swelled 23% year on year.
At £29.90 per share, TBC Bank trades on a forward price-to-earnings (P/E) ratio of 4.8 times. It also carries a mighty 6.9% dividend yield.
Earnings could take a hit if the global economy cools again. But I still expect the bank to deliver strong returns over the long term.
The post 3 of my favourite FTSE 250 bargain shares for September! appeared first on The Motley Fool UK.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may 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.
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