I have bought a range of shares so far in 2022 – and not just from the main index. I have also been scooping up shares in the FTSE 250 that look like bargains to me.
Here are a trio of such shares I have bought and continue to hold in my portfolio.
abrdn
What is coming down the tracks for the fund management industry?
Looking at the share price action of some key players, the future looks very grim. I do see risks. For example, turbulent markets can lead investors to withdraw cash from funds, hurting profits.
For now, though, the ridiculously named abrdn (LSE: ABDN) is fortunately limiting its losses to vowels. The asset manager’s profits came in at £995m last year, on turnover of £1.7bn. While revenues rose compared to the prior 12 months, they remain sharply lower than the years before that.
abrdn has work to do, from attracting new customers to navigating choppy financial markets. That helps explain why its share price has fallen 21% over the past year, even after a sharp rally in the past couple of months. But it has a proven, profitable business and existing customer base.
The yield on these FTSE 250 shares now stands at 7.4%. I continue to hold them in my portfolio both for their growth and income prospects.
Jupiter
Another beaten down asset manager is Jupiter (LSE: JUP). Like abrdn, its shares have rallied lately. Despite that, they are still 47% lower now than a year ago.
That sort of fall does not happen for no reason. Jupiter is suffering from the woes of the asset management sector. It has seen billions of pounds in assets under management leave the business over the past year. That is bad news for revenues and profitability. But it has problems of its own making too, including the 2020 acquisition of a rival that I feel has not helped the business enough to justify the price tag.
Is the high dividend sustainable? Right now, the yield is a whopping 12.8%. This year brought new management. It has announced a change in dividend policy from next year onwards. That should put the dividend on a more sustainable footing, so I think it could be the right move for the FTSE 250 business even if it leads to a smaller dividend.
Although I see ongoing risks here, Jupiter has a strong brand and large customer base and trades on an attractive valuation. Its price-to-earnings ratio is just 6.
ITV
It has been a miserable year for the valuation of ITV (LSE: ITV).
The shares are down a third so far in 2022. That largely reflects a negative investor reaction to the broadcaster’s investment in a new digital platform launched this month.
The costs involved may hurt profits, but I see the move as a way of keeping the company relevant as media consumption habits evolve. Meanwhile, ITV remains highly profitable. In the first half, profits before tax came in at £301m.
The company plans a full-year dividend per share of 5p, which equates to a prospective dividend yield of 6.5%.
