3 growth stocks helping the FTSE 100 have its best month in over 2 years

The FTSE 100 has started 2025 with a bang, rising 5% in January. Paul Summers checks out a few stocks that have contributed to this momentum.

| More on:

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.

In contrast to the scary moves seen in certain stocks across the pond, the FTSE 100 has been strong in 2025. A rise of 5% means it’s on course for its best month in more than two years!

At least part of this is down to some heavy-hitters setting fresh 52-week highs.

London Stock Exchange Group

Shares in financial markets infrastructure and data provider London Stock Exchange Group (LSE: LSEG) are also up nearly 5% in January. But its value has been steadily rising for a while — 35% in the last year alone.

Created with Highcharts 11.4.3London Stock Exchange Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Look closer and this begins to make sense. This year, LSEG plans to roll out new AI features within products that it’s been working on with US tech titan Microsoft. If all goes to plan, this development could grow its market share.

The question is how much of this is now priced in. The shares now trade at a forecast price-to-earnings (P/E) ratio of 30. That seems high considering margins have been falling in recent years. The number of UK initial public offerings (IPOs) — another source of income for the company — has also been woeful.

With this in mind, it will be interesting to see the market’s reaction to full-year numbers, due at the end of February. This is before we’ve even considered what might happen if global markets have a sustained wobble. Worryingly, the stock proved pretty volatile during the post-pandemic tech crash.

Experian

Global data company Experian (LSE: EXPN) is another top-tier member that’s been doing the business for shareholders. In fact, it’s been flying in January – rising 14% as I type.

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

At least some of this is surely down to an encouraging update on trading for the three months to the end of 2024. “Another strong quarter” led to the company reporting an 8% increase in total revenue. Trading in North America was particularly robust, supported by its business-to-business segment.

Again, this isn’t a stock for value hunters. Experian shares change hands for 32 times FY25 earnings. So, this is arguably another candidate for a big fall if (and the key word is ‘if’) investor sentiment shifts downward for any reason. It’s also worth noting that competition in this line of work is growing.

Like LSEG, it goes on my watchlist for now.

Halma

Completing our trio of stocks experiencing great momentum is life-saving tech supplier Halma (LSE: HLMA). Its value has climbed by a similar percentage to Experian in January. Based on how it finished 2024, this isn’t much of a surprise.

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

Back in November, the company’s shares soared by almost 10% in a single day after it posted a 13% rise in half-year revenue (to £1.07bn) and 18% jump in profit (to just over £209m). In addition to maintaining its guidance for the full-year, management also elected to raise the interim dividend by 7%.

But Halma is far from cheap to buy. A P/E of 34 for the current financial year makes it the most expensive of the three. And it’s growth-by-acquisition strategy is naturally dependent on it finding enough good businesses to buy.

Broker Berenberg has a target price of 3250p but this is another one I prefer to buy when investors are fearful.

I’m watching all of them closely for now but not yet buying.

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 has no position in any of the shares mentioned. The Motley Fool UK has recommended Experian Plc, Halma Plc, and Microsoft. 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

Investing Articles

Here’s how Warren Buffett’s 2024 letter to shareholders can teach us to be better investors

The latest 2024 letter from Warren Buffett is a bit shorter than previous ones, but it's still packed with words…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

Only 28% of Gen X are on track for a comfortable retirement! Could buying UK stocks help?

Looking for ways to supercharge your retirement fund? Investing in UK stocks is one path I think deserves serious consideration.

Read more »

Investing Articles

Here’s the 1 thing everyday FTSE investors have over billionaire fund managers

Our writer discusses a key advantage that retail FTSE investors with Stocks and Shares ISA accounts have in the stock…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Are Tesco shares the ultimate FTSE ‘Steady Eddie’?

Harvey Jones says watching Tesco shares climb steadily upwards is balm for the soul. But will the FTSE 100 grocer…

Read more »

Investing Articles

These 5 problems could hit the Barclays, NatWest, and Lloyds share prices in 2025!

The Barclays, NatWest, and Lloyds share prices have surged between 55% and 102% over the last 12 months. But could…

Read more »

Investing Articles

Up 18% in February! Should investors consider this for their Stocks and Shares ISA in March?

Harvey Jones wonders if soaraway FTSE 100 bank Standard Chartered would made a nice addition to a balanced Stocks and…

Read more »

Mature people enjoying time together during road trip
Investing For Beginners

Have money in a Cash ISA? Here are 3 reasons to consider investing in the stock market instead

History shows that over the long term, the stock market tends to deliver much better returns than the interest from…

Read more »

Investing Articles

What on earth is going on with the Nvidia share price lately?

The Nvidia share price has been all over the place in February. Does this tempt our writer to add the…

Read more »