Despite continued volatility, the FTSE 250 index has outperformed the FTSE 100 over the past six months.
This has led me to look for stocks to buy to boost my portfolio.
One stock I’m looking to buy when I next can is Games Workshop (LSE: GAW). Another is Primary Health Properties (LSE: PHP).
Should you invest £1,000 in Games Workshop 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 Games Workshop made the list?
Here’s why!
Growth stock
The rise of Games Workshop as a business and a stock is one of the most remarkable stories of recent times, in my opinion.
From humble miniature games and model maker, to worldwide miniatures and table top gaming phenomena with surging popularity, performance, and shareholder value.
Games Workshop shares are up 8% over a 12-month period from 9,175p at this time last year, to current levels of 9,825p.
However, the shares took a sharp dive at the end of last year, due to some adverse trading. This was related to weaker demand and macroeconomic volatility. It’s worth noting that sometimes growth stocks like Games Workshops can experience such a drop off in trading.
The good news for potential investors like me is that there may be a better entry point to snap up shares. Granted, the shares are still trading on a price-to-earnings ratio of 22, which could be considered high. However, it’s cheaper than some months ago.
The obvious risk is continued volatility hurting demand, sales, performance, and returns. This is linked to the fact that consumers are busy battling higher living costs across the board.
However, Games Workshop’s dominant market position, healthy balance sheet, and future prospects through a long pipeline of products to come, make it an attractive prospect for me. Plus, a dividend yield of 4.3% would boost my passive income. Although, I do understand that dividends are never guaranteed.
Defensive property
Primary is set up as a real estate investment trust (REIT). This basically means it makes income from property, and must return 90% of profits to shareholders, which is an attractive prospect for me.
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The shares are down 7% over a 12-month period from 100p at this time last year, to current levels of 93p.
It’s worth noting that recent turbulence has hurt many property stocks, Primary included. This is an ongoing risk too. For example, higher interest rates make existing debt costlier to pay down, which could hurt returns. Furthermore, borrowing for growth purposes could be trickier and more expensive. In turn, this could halt Primary’s aspirations, performance, and returns.
On the flip side, Primary is in an excellent position to benefit in the longer-term, in my view. It rents out over 500 healthcare provisions, but the majority of these are taken up by the NHS. Plus, operating in the healthcare sector offers the business defensive traits.
Renting to the NHS is positive, as contracts with governments are usually stable, with virtually zero chance of defaults. Furthermore, due to the current state of the NHS, demand for Primary’s buildings could grow, boosting performance and returns.
Finally, a dividend yield of 7% is enticing, and I can see this growing over time too.
