3 FTSE 250 growth stocks I’ll be watching in March

Paul Summers highlights three stocks from the FTSE 250 (INDEXFTSE:MCX) he’ll be paying special attention to next month.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Concentrated young african american black guy sitting on heated floor at modern coffee table in living room, looking at laptop screen

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Earlier today, I looked at three companies from the FTSE 100 that are involved in the flood of results expected in March. I’m now turning my attention to three growth stocks from the FTSE 250.

Darktrace

Recently demoted from the FTSE 100, cybersecurity specialist Darktrace (LSE: DARK) is first on my list of second-tier stocks to watch next month. It releases interim numbers on 3 March. 

The former market darling has now given up most of the gains it made since becoming a listed company. That’s a quite shocking reversal considering just how important cybersecurity already is and the potential growth that lies ahead. Darktrace’s undoubtedly impressive self-learning AI can be applied to multiple industries too.

Should you invest £1,000 in J D Wetherspoon Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if J D Wetherspoon Plc made the list?

See the 6 stocks

Then again, I do understand why sentiment has changed. As good as Darktrace’s tech appears to be, there can be no doubt that it’s operating in a highly competitive space. Brokers also remain concerned by the company’s low level of R&D spending.

Unfortunately, the valuation of almost 11 times sales still looks rich to me as well. In fact, I wonder if the stock will fall further in March if traders continue to shun unprofitable growth stocks in favour of more traditional value plays. 

I still can’t bring myself to get involved just yet.

Greggs

The advent of higher prices at food-on-the-go retailer Greggs (LSE: GRG) makes its next update an essential read in my opinion. The sausage roll seller reports final results on 8 March.

Shares in Greggs have tumbled almost 25% in 2022 so far. Is the actual business 25% less valuable though? As a holder, I won’t be surprising anyone when I say that I don’t think it is. Yes, the departure of long-standing CEO Roger Whiteside isn’t ideal. And, no, the spread of the Omicron variant late last year can’t have helped trading.

Created with Highcharts 11.4.3Greggs Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

But these are temporary setbacks. Helped by its strong brand and marketing savvy, I have no doubt Greggs can deal with pretty much anything that comes its way. I also doubt its loyal fanbase will resent a 5p price hike for long.

At less than 21 times forecast earnings, Greggs still isn’t cheap as chips to acquire. However, the price is far more palatable than it once was. Since I plan to keep the stock in my portfolio for years rather than weeks, I’d have no issue increasing my holding next month.

Computacenter

A final FTSE 250 member I’ll be watching is IT solutions provider Computacenter (LSE: CCC). While a 7% drop in the share price year-to-date is unfortunate, investors here have fared a lot better than other UK growth shares.

Created with Highcharts 11.4.3Computacenter Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

I can’t see full-year results on 16 March being anything less than solid. Back in January, Computacenter reported that recent trading had been ahead of expectations despite supply chain headwinds.

The question I’m asking now, however, is how much of this is already factored into the valuation. The fact that Computacenter’s share price didn’t move higher after its last update suggests quite a bit. Perhaps investors are getting concerned about just how thin margins are at the Hatfield-based business?

On the flip side, its shares currently change hands for 17 times earnings. That’s cheap compared to peers in the industry. There’s also a 2.2% dividend yield, easily covered by forecast profits.

For now, the company stays on my watchlist.

But there are other promising opportunities in the stock market right now. In fact, here are:

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Paul Summers owns shares in Greggs. 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.

More on Investing Articles

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Here’s the Tesco share price forecast for the next 12 months!

Tesco's valuation has dropped to multi-year lows after recent share price weakness. Is now the time to consider buying the…

Read more »

Illustration of flames over a black background
Investing Articles

Just released: March’s higher-risk, high-reward stock recommendation [PREMIUM PICKS]

Fire ideas will tend to be more adventurous and are designed for investors who can stomach a bit more volatility.

Read more »

Investing Articles

I asked ChatGPT for the best FTSE 100 investment trust to buy… here’s what it said

There aren't many FTSE 100-listed investment trusts and according to ChatGPT there’s only one winner. Dr James Fox explores.

Read more »

Investing Articles

How much should investors put in an ISA to achieve the average UK wage in passive income?

Millions of Britons use the Stocks and Shares ISA as a vehicle to build wealth, but a successful investor can…

Read more »

Investing Articles

2 cheap FTSE dividend stocks to consider buying for an ISA

The deadline for using up the Stocks and Shares ISA allowance is almost upon us. Paul Summers has spotted two…

Read more »

Investing Articles

£20k in a Stocks and Shares ISA? Here’s how an investor could target £1,342 in passive income each month

Christopher Ruane explains how a long-term approach to investing a Stocks and Shares ISA could generate a four-figure monthly income.

Read more »

Shot of an young Indian businesswoman sitting alone in the office at night and using a digital tablet
Investing Articles

Millions are missing out on ISA account benefits! Here’s what I’m doing now

Swathes of people are missing the chance to supercharge their returns with a Stocks and Shares or Lifetime ISA account.…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

Here’s my plan to survive and thrive in a stock market correction

A falling stock market can be an opportunity, but investors need a plan. Stephen Wright shares his strategy for taking…

Read more »