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.
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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.
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.
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.
