I’m on the hunt for FTSE 250 shares. The index is home to some of the most exciting companies out there.
Two in particular have caught my eye. However, I’m wondering if now is the time to buy.
Ready for take-off?
First up, I’m contemplating buying some shares in low-cost airline group easyJet (LSE: EZJ). It’s been a turbulent spell for the business. The pandemic took its toll. Yet since then, it’s posted a solid recovery. It’s up just shy of 20% in the last year. The stock jumped 25% in the last month alone.
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With that, there’s certainly a case to be made for buying easyJet shares. The business has released some strong results lately, including its full-year update on 28 November. For the year, revenue grew 42% to £8.2bn, fuelled by higher prices and improved capacity. As a result, headline profit before tax was £455m.
That said, an issue facing easyJet is inflation. Rates at levels not seen for years and a cost-of-living crisis have seen consumers batten down the hatches and cut spending. However, as a budget airline, I see easyJet in a strong position to benefit. With its package holidays business growing profits by 221%, this is clear evidence.
It’s not out of the woods just yet. And while it’s hedged a large chunk of its fuel for the next year, with ongoing conflicts in Ukraine and the Middle East there’s always the risk that prices could skyrocket. Inflation saw costs grow significantly for FY23. This could be a further issue in the upcoming year.
That said, these are short-term problems. And as an income investor, news of a dividend is what I like to see. I’m tempted to buy.
Primed for growth?
I’m also keeping close tabs on Games Workshop (LSE: GAW). Its share price has climbed an impressive 43% in the last 12 months. As such, I recently opened a position in the Nottingham-based manufacturer.
To be fair, its impressive performance should come as no surprise. The last eight consecutive years have seen the business deliver sales and profit growth.
I’m also a fan of the passive income it’ll provide. A yield of 4.2% tops the FTSE 250 average. Games Workshop only uses “truly surplus cash” to pay shareholders.
The miniature games industry has blossomed into a lucrative market in recent times, which has attracted the attention of some major names. As a result, players such as Disney have now entered the space. I’d expect competition to continue ramping up.
As with easyJet, inflation has also had an impact on the business. It’s managed to pass on costs, but this may not last.
That said, Games Workshop has a loyal customer base. It’s also efficient at keeping consumers in its ecosystem. On top of that, it has major plans to diversify. The largest of these is its TV deal with Amazon. This will see its Warhammer franchise exposed to hundreds of millions of potential new customers.
Time to buy?
I’ll be adding to my position in Games Workshop with any spare cash I have. As for easyJet, I’m leaving it on my watchlist. There’s too much volatility surrounding the stock at the moment. I’ll be reassessing over the next few months.
