It’s been an interesting week in the markets with a lot of back and forth for some share prices. The shares of one company in particular, Ultra Electronics, have performed brilliantly. Their price growth beat the rest of the companies listed on the London Stock Exchange (LSE).
Here’s everything you need to know about Ultra Electronics along with why the company’s stock has been performing so well recently.
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Who is Ultra Electronics (ULE) and what is going on with its shares?
Ultra Electronics covers quite a few specialist areas. Its main focus is using electronics and software within military defence and aerospace. Alongside this, the company also works within sensitive fields such as:
- Cybersecurity
- Infrastructure
- Communications
- Maritime, land and underwater warfare
According to the latest data from Saxo Markets, the company’s share price has risen by a massive 28.34% over the past week. Of course, past performance doesn’t dictate future results, so remember that this isn’t an indication of future returns for the business.
Why has the price of Ultra Electronics shares gone up?
The company has had some positive press over the last few weeks as it’s been attracting a lot of private equity interest.
This just means there are businesses out there with deep pockets looking to buy Ultra Electronics. All of this interest in the company has levelled up its popularity, which has spilled over into boosting its share price.
News of a takeover means the company has to be valued. Because the most recent bid offered a purchase price higher than the market value of the shares, Ultra Electronic stock took a big leap upwards. This brings the price closer to the figures from the private equity offers.
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What’s the future for Ultra Electronics shares?
Due to the sensitive nature of the company’s activities, any potential deal would likely require an official review. So a takeover would be a lot more complicated than something like the proposed purchase that pumped up Morrisons shares.
Defence manufacturing is a profitable business and so the long-term outlook for Ultra Electronics could be positive. They have a healthy P/E ratio and their financials have been trending in the right direction.
However, the recent spike reported by Saxo Markets has raised Ultra the company’s share price, so it’s closer to its true market value. This just means there may not be anymore large upside in the near term. But continued research and takeover interest could lead to a further revaluation of Ultra Electronics stock.
Who else’s shares saw positive price movement?
Here’s a rundown of the top ten gainers on the LSE from last week:
- Ultra Electronics Holdings (ULE): 28.34%
- Reach (RCH): 25.65%
- Ferrexpo (FXPO): 9.92%
- Trainline (TRN): 9.66%
- Anglo American (AAL): 9.964%
- Meggitt (MGGT): 9.53%
- Airtel Africa (AAF): 8.64%
- Frontier Developments (FDEV): 8.37%
- Ceres Power Holdings (CWR): 8.26%
- Jet2 (JET2): 8.19%
Where can I invest in shares like Ultra Electronics?
It’s important to use a share dealing account that gives you access to a wide range of assets and stock markets. Doing this will give you more options and allow you to invest in publicly traded companies like Ultra Electronics.
If possible, making use of an account like the Saxo Markets stocks and shares ISA can help you to minimise the amount of tax you pay on the growth of your investments.
Just remember that you may get out less than you put into the market. So consider any investments carefully and make sure that you have a long-term plan to help guide your decisions.
Please note that tax treatment depends on your individual circumstances and may be subject to change in the future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
