Checking on the most popular Stocks and Shares ISA picks for June, I see two FTSE 250 companies appearing strongly on the lists. Curiously, they’ve both been down at penny share prices — one as recently as April this year, the other in May 2025.
But apart from both having made it above 100p, the two share price trajectories over the past five years could hardly be different.
One is ITM Power (LSE: ITM), which is still down 66% in five years despite its recent gains. Filtronic (LSE: FTC) is the other, up a staggering 2,783% over the same timescale.
ITM Power
ITM Power is all about hydrogen energy systems. And from a recent high on 28 May, it’s crashed a painful 42%. But there’s no sign of the business doing badly. In fact, it’s been racking up some impressive new contracts, and lifted its own guidance for the full year.
Enthusiasm seems to have pushed the share price a bit ahead of itself. And some investors have been selling and taking some of their recent profits. It also doesn’t help that Goldman Sachs recently issued a Sell recommendation with a 63p target — about half the current price.
The main difficulty here is putting a valuation on the shares, with the company not profitable yet — though losses are falling. Still, ITM Power has figured on ISA providers’ most-bought lists for Stocks and Shares ISAs in May and June.
Filtronic
Filtronic stormed into second place on interactive investor’s ISA favourites list for the first week of June. The company develops wireless communications technology, and it counts SpaceX as one of its customers. SpaceX also has the rights to buy up to 10% of Filtronics’ shares. So it’s perhaps not so surprising to see the price hitting the stratosphere of late.
To me, this suggests two things. One is that supplying SpaceX means that its products are likely to be among the best in the business. The other is that the SpaceX connection might also mean Filtronic shares are madly overvalued.
Filtronic looks like showing impressive profit growth in the coming years. But right now, it’s on a forward price-to-earnings (P/E) ratio of 126. That could halve by 2028 if forecasts come good. But it still makes my eyes water a bit.
Follow the favourites?
So what should Stocks and Shares ISA investors do? These are both companies that I reckon could have stellar futures in terms of earnings growth. And sometimes, a short-term high valuation for a stock can still mean a cracking long-term buy.
Investors who like that kind of white-knuckle investment can do very well, and might benefit from considering these two. But it’s a strategy that can bring the occasional wipeout along the way.
And it’s not my strategy, having left my youthful growth-stock days long behind. So I’m out, but I do intend to watch these two.
Should you invest £5,000 in Filtronic Plc right now?
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Alan Oscroft does not hold any positions in the companies mentioned.
