The FTSE 250 might be roaring back (up 5% in the past six weeks) but there’s still plenty of underpriced beauties for investors to grab today.
Take Bovis Homes Group (LSE: BVS) as an example. Not only does the housebuilder trade on a forward price-to-earnings (P/E) ratio bang on the accepted bargain-basement watermark of 10 times, but a corresponding dividend yield of 10.6% for 2019 makes it one of the biggest yielders on Britain’s second-tier share index.
That’s not to say that Bovis hasn’t risen itself in recent weeks. The housebuilder gained after announcing record interim results in mid-September as well as news of a possible merger with the homes operations over at Galliford Try.
I would simply say that the scale of buying still fails to reflect how robust market conditions are right now, and how strong they are likely to remain given the size of the country’s homes shortage. And I reckon third-quarter financials to be released on 14 November could remind the market again of Bovis’s bright investment case and prompt further waves of share buying.
Screen idol
I understand, however, that plenty of stock pickers might want to stay away as concerns of an economically destructive ‘no deal’ Brexit reach fever pitch. For these individuals, I reckon Cineworld Group (LSE: CINE) could be a better blend of top value and big dividends.
For 2019, the cinema operator trades on 9 times predicted earnings and it carries a 6% corresponding dividend yield. This is, in my opinion, top value given the pace at which global box office takings are booming and Cineworld is attempting to capitalise on this by expanding across Europe, the Middle East, and more recently the US.
Freshest data from IMdB-owned Box Office Mojo showed cinema takings in the US hit a new September record of $677m, up 5% year on year, and illustrating the surging popularity of Hollywood’s steady stream of blockbusters, sequels, and reboots. And cheerily for Cineworld, Tinseltown’s major studios have a packed slate of similar fare scheduled well into the next decade.
Another top buy
I also reckon GVC Holdings (LSE: GVC) is a FTSE 250 share too cheap to miss today.
Share price gains here have been even more impressive than those of the broader FTSE 250 over the past six weeks – the gambling giant’s up a staggering 29% in that time – and yet classic value metrics like the P/E ratio and dividend yield both suggest it remains undervalued. These sit at 12.2 times and 4.7% respectively.
GVC has blasted higher after updating its earnings guidance in mid-August, delivered by online proforma net gaming revenues blasting 17% higher in the first six months of 2019. However, the rapidly growing online betting market isn’t the only reason why revenues are booming. The Ladbrokes Coral and Bwin are also winning share across all major territories.
The business has been making massive investment in branding and technology in recent years, efforts that are clearly paying off. I’m convinced that the firm’s best days lay ahead of it as it embarks on global expansion.
