Forget meme stocks: here’s a FTSE share that’s making investors huge amounts of money
While investors continue to chase low-quality âmeme stocksâ in the pursuit of big gains, there are a lot of under-the-radar FTSE shares that are quietly making investors a fortune. You wonât find these shares on Reddit threads or TikTok but that doesnât seem to be stopping them from rapidly multiplying investorsâ wealth.
Interested to learn more? Hereâs a look at one such share thatâs generating prolific gains for investors at the moment.
Working with SpaceX
Filtronic‘s (LSE: FTC) a British company that specialises in wireless communication solutions. Recently, itâs been having a huge amount of success selling E-band Solid State Power Amplifiers (SSPAs) to Elon Muskâs space company SpaceX.
This success is reflected in its share price. Over one year, itâs up about 80%. Over five, itâs up an incredible 1,600% (turning £5,000 into around £85,000).
Thatâs roughly in line with the returns from Nvidia shares over the last five years. So itâs fair to say we’ve a genuine winner here.
Worth a look today?
Is it too late to consider buying this growth stock? I donât think so. If the orders continue to flow in from SpaceX, Filtronicâs revenues and profits are likely to keep rising rapidly. This should boost the share price.
Itâs worth noting that the global space industry is still in its infancy and has a lot of long-term growth potential. According to experts at McKinsey, it could be worth $1.8trn by 2035 (versus $630m in 2023).
Risks versus reward
That said, customer concentration’s a risk here. If SpaceX decides to develop similar solutions in-house then Filtronicâs growth could slow rapidly, bringing the share price down. Because the recent contracts from SpaceX have been large. For example, one awarded in August was worth $62.5m.
Note that Filtronicâs price-to-earnings (P/E) ratio’s currently 46. So itâs priced for strong growth.
The good news here is that Filtronic’s expanding into other industries such as defence and aerospace and having success here too. For example, in July, it won a £13m contract from defence powerhouse BAE Systems to supply high-performance modules for an electronic sensor system.
One other risk that’s worth mentioning is timing of orders. With this kind of company, orders can be a little sporadic. This can lead to shifts in investor sentiment. For example, investors can get very bullish when orders come in (pushing the share price up sharply), only to lose interest when orders go missing for a while (leading to short-term share price weakness).
A lot of potential
Weighing everything up however, I think this stock’s worth considering as a growth play. Today, its market-cap’s only £310m so itâs still a tiny company.
Note that analysts at Berenberg have a 196p price target. Thatâs roughly 47% above the current share price.
The post Forget meme stocks: hereâs a FTSE share thatâs making investors huge amounts of money appeared first on The Motley Fool UK.
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Edward Sheldon has positions in Nvidia. The Motley Fool UK has recommended BAE Systems, Filtronic Plc, and Nvidia. 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.
