2 top stocks to consider from the FTSE 250 in March
FTSE 250 stocks are enjoying a renaissance after a 23% rise in the mid-cap index in two years. As such, many shares aren’t as cheap as they were in early 2024.
However, there are still some potentially lucrative long-term opportunities, especially in growth stocks. Here are a pair of FTSE 250 shares that I think are worth researching further today.
A market leader
First up is Moonpig (LSE:MOON), the leading online greeting card company in the UK and the Netherlands. It offers an extensive range of cards, curated gifts, and personalisation features.
Moonpig’s due to release a trading statement on 18 March. But in the six months to 31 October, the firm reported a 6.7% uptick in revenue to £168.6m, with adjusted earnings per share rising 13.1%.
Second-half trading up to early December had been “encouraging“. And in a show of confidence in its prospects, Moonpig hiked the interim dividend 25%.
Mind you, the forecast yield is still modest at 1.85%. And if the UK economy were to hit the rocks, the company’s growth could slow as consumers cut back on curated cards and gifts.
However, the FTSE 250 stock trades at 12 times forward earnings, which isn’t expensive for a digital-first firm that boasts a strong return on capital. It’s also buying back up to £60m worth of shares in FY26.
Moonpig now has over 12m customers, with a database of 107m customer occasions. This data allows the company to predict what cards or gifts customers might like based on previous purchases and upcoming calendar events.
I use the firm’s app to create personalised birthday cards for my daughter, and I like the AI-generated stickers you can create. Iâm not alone. Over 50% of customers are now using its innovative creative features to make their cards more personal.
Looking ahead, I’m bullish on the company’s growth prospects. There’s a long-term structural shift from offline to online card buying, and Moonpig is a market leader with a strong brand.
Another leader
Next, I want to highlight Hollywood Bowl (LSE:BOWL), which is the UK and Canada’s largest 10-pin bowling operator.
What I like here is that the business is showing resilience during a tough period of weak consumer spending. In the 12 months to the end of September, like-for-like revenue in the UK and Canada grew 1.1% and 3.2% respectively.
However, spend per game was up 9.2% in the UK and 14.8% in Canada. So the firm’s managing to sell more food and drink to customers when they’re inside. It has also invested £11m in new amusement machines and is increasing its mini-golf offer.
Total revenue rose 8.8% last year to £250.7m, with a record five new sites opened in the UK and two in Canada. The growth opportunity in Canada looks attractive because the 10-pin bowling market there is very fragmented.
Similar to Moonpig, any deterioration in the economy would present a risk. However, it’s worth noting that a family of four can bowl in the UK for £26. So Hollywood Bowl offers value for money at a time when families are sadly struggling financially.
The company’s on track to reach 130 centres by 2035, up from 92 at the end of September. And the stock’s reasonably priced at 11 times forward earnings while sporting a 5% yield.
The post 2 top stocks to consider from the FTSE 250 in March appeared first on The Motley Fool UK.
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Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has recommended Hollywood Bowl Group Plc and Moonpig Group Plc. 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.
