I often trawl through the FTSE 250 in the hope of finding the best growth stocks to add to my portfolio. Although they’re not the biggest companies on the market, the shares can occasionally provide exciting growth opportunities. Let’s take a look at the best performers from the index in 2022.
For the year to date, Euromoney Institutional Investors (LSE:ERM), Mediclinic International (LSE:MDC), and QinetiQ (LSE:QQ) lead the way in share price performance. While the way the shares move is obviously important, I want to delve deeper to understand what the driving forces are behind these moves.
| Stock | Performance (year to date) | Performance (1 year) |
| Euromoney Institutional Investors | 42.05% | 29.77% |
| Mediclinic International | 41.45% | 58.86% |
| QinetiQ | 40.83% | 7.35% |
Euromoney
Euromoney was subject to a takeover offer from a couple of private equity firms and the current offer on the table is equivalent to 1,461p per share. At the time of writing, the shares are trading at 1,314p.
The private equity companies seem keen to complete the takeover of Euromoney, a financial publishing firm, given that they’ve made four previous offers.
For the six months to 31 March, the company reported that revenue had increased by 14% year on year. Furthermore, adjusted pre-tax profit grew by 16% to £38.6m over the same time period.
However, it’s still unclear how the economic environment and the war in Ukraine may impact the business, and whether these factors will lead to a fall in demand for services, which means this is a risk.
Mediclinic
Like Euromoney, Mediclinic has also been subject to an offer from a consortium. The approach, worth somewhere in the region of £3.4bn, was rejected last month. Despite this, the takeover deadline has been extended, meaning that talks are still under way.
The shares are currently trading at 474p.
For the year ended March — which included some months when the effects of the pandemic were still visible — operating profit at the business surged 34% to £280m and revenue was above pre-pandemic levels. Of course, these figures make sense, given that there were likely increased levels of client demand during the pandemic.
However, with the worst of the Covid crisis behind us, it’s possible that results will not be as impressive in the future.
QinetiQ
Finally, the QinetiQ share price has performed well this year. The company – a defence specialist – has a strong forward order book to supply governments around the world with weapons and equipment.
Indeed, there has been heightened interest from investors due to the ongoing war in Ukraine and the shares are currently trading at 380p.
The business had a net cash balance of £225m at the end of March, while it estimates that it will derive £900m in revenue from contracts due in 2023.
However, while the company is in a healthy financial position, much of the share price performance of late has come from the fallout from the war in Ukraine. That conflict won’t last forever, and I wonder if an end to hostilities might result in the shares falling.
Overall, these three firms top the index for share price performance in 2022. But while they’re all attractive propositions, there are too many unknowns for my liking. Yet I won’t rule out purchases in the future, when things are a bit clearer.
