The passive income idea is all about generating regular cash returns without investors needing to do much at all.

With strong earnings forecasts and long‑term contracted production giving it high, visible cash flow, Energean (LSE: ENOG) looks a great prospect, in my view.

The huge gap between the stock’s current price and ‘fair value’ could also mean big share price gains ahead.

So, what sort of returns are we looking at?

What will drive these increases?

Ultimately, rises in any company’s dividends and share price are powered by sustained increases in its profits. A risk here for natural gas giant Energean is its reliance on Eastern Mediterranean gas markets. This exposes it to geopolitical disruption in the Middle East. Another is any delay in major planned developments.

Nevertheless, analysts forecast its profits will increase by a whopping annual average of 27.3% over the medium term at minimum.

These projections follow CEO Mathios Rigas’s recently announced plans to double the firm’s size over the next decade. Much of this will include projects in West Africa that will diversify its geographical presence.

So, what about share price gains?

Price and value are very different concepts for shares. The former reflects whatever buyers and sellers are willing to agree on at a given moment. The latter is determined by the underlying strength and prospects of the business.

That distinction is crucial for long-term investor profits because, over time, prices tend to converge to fair value.

Discounted cash flow (DCF) modelling remains the best way of identifying any share’s fair value, in my view. It takes cash flow forecasts for the underlying business over the long term and discounts them back to today.

Where the projections become less clear, the discount applied increases, which is why analysts’ DCF outcomes can vary sometimes. Based on my modelling — including an 7.9% discount rate — Energean looks 72% undervalued at its current £7.16 price.

That suggests a fair value of £25.57 — more than twice the present price.

So, if markets keep correcting price-to-value gaps over the long run, this could be a terrific buying opportunity if those DCF assumptions prove accurate.

What about dividend income?

Changes in a stock’s price and/or annual payout can move dividend yields up and down. Nevertheless, Energean shifted firmly towards a shareholder‑focused strategy once its cash-rich Karish field came on-line in early 2022.

Analysts forecast its dividend will be a stunning 11.2% by 2028. Using this as an average would mean £20,000 invested in the shares would make £40,980 in dividends after 10 years. The figure assumes the dividends are reinvested in the stock to maximise the supercharging effect of dividend compounding.

On the same basis, the dividends would increase to £546,881 after 30 years — the end of the standard investment cycle for long-term investors.

And by then, the holding would be worth £566,881, including the initial £20,000 stake. And that would pay a yearly income of £63,491!

My investment view

I would have to sell one of my other energy stocks (BP, Shell, Harbour Energy) to allow me to buy Energean. Otherwise, my portfolio’s risk/reward balance would be upset.

So tempting is the stock that I am seriously considering doing this right now. 

For others without this dilemma, I think the shares are definitely worth their attention.

Should you invest £5,000 in Energean Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Energean Plc made the list?

Simon Watkins owns shares in BP, Shell, and Harbour Energy.

The post This FTSE passive income star has an 11.2% forecast yield and is potentially 72% undervalued! appeared first on The Twelfth Magpie.

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For investors seeking a resilient income share, Persimmon (LSE: PSN) is hard to ignore.

Its disciplined approach to cash, land, and build rates has created a foundation for a sustainable, high-yield dividend profile.

And with buyer demand slowly returning, it offers the rare mix of dependable income today and recovery-driven growth tomorrow. That could mean share price gains to be had too.

So, what sort of returns could investors be eyeing here?

How much potential dividend income?

Dividend yields can go up and down, as annual dividends and share prices change. But analysts forecast that Persimmon’s dividend yield will rise to 5.8% this year, 6.3% next year, and 6.7% in 2028.

Using the projected 6.7% as an average, a £20,000 holding in the firm would make £19,012 in dividends after 10 years. That also assumes dividend compounding is used to turbocharge those payouts over time.

On the same basis, the payouts would increase to £128,434 after 30 years — the end of the standard long-term investment cycle.

The total value of the shares would be £148,434 by then (including the £20,000 initial investment). And that would deliver a yearly income of £9,945!

What about price gains?

A stock’s price is rarely the same as its true worth (‘fair value’). Price is just a short-term trading level, while value reflects long-term business fundamentals. It is critical to know the difference, as historically, share prices tend to converge to their fair value over time.

Discounted cash flow (DCF) analysis remains the gold standard for identifying fair value. It uses cash flow forecasts for the business and then discounts them back to today to produce a per-share price.

The less certain those forecasts, the greater the discount applied, and different assumptions here can produce varied analysts’ DCF outcomes. Using my own approach — including an 8.7% discount rate here — Persimmon looks 53% undervalued at its present £10.49 level.

That implies a fair value of £22.32.

So, if markets continue to correct this price-to-value gap over time, this could be a terrific buying opportunity, if that DCF modelling holds good.

How does it look under the bonnet?

The engine driving long-term dividend and share price gains is sustained profit growth.

A risk for Persimmon is mortgage rates staying higher for longer, which could stall the nascent housing recovery. Another is that build‑cost inflation may prove stickier than expected, which could squeeze the firm’s margins.

However, analysts forecast its profits will grow by a robust 11.7% a year on average to end-2028 at minimum.

Its 2025 results, released on 10 March this year, saw underlying operating profit jumping 17% year on year to £472m. At the same time, revenue climbed the same amount to £3.75bn. The figures reflect the firm’s ability to increase volumes and pricing even in a still‑fragile housing market.

My investment view

I already hold shares in another housing sector firm — Taylor Wimpey — so adding another would disrupt the risk/reward balance of my portfolio.

For investors without this problem, I think Persimmon’s strong projected profit growth will support forecast dividend rises. I also think it will power the firm’s stock price to its fair value over the long run.

That said, I have my eye on other high-yield undervalued stocks in other sectors.

Should you invest £5,000 in Persimmon Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon Plc made the list?

Simon Watkins owns shares in Taylor Wimpey.

The post A 6.7% forecast yield and 53% below ‘fair value’! 1 stunning FTSE income stock for investors to consider today? appeared first on The Twelfth Magpie.

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Glencore’s (LSE: GLEN) share price continues to trade way below its ‘fair value’. That is despite its strengthening operational performance and improving backdrop for commodity price rises.

With copper demand accelerating and the firm’s production rising, it is generating the kind of cash flows typically rewarded with higher valuations.

Add in a cleaner balance sheet and clearer capital‑return strategy, and Glencore stands out as a compelling undervaluation prospect for long‑term investors.

So, how high could the stock go?

What are the key business drivers?

Glencore mines and trades commodities, making money at every stage of the process from shovel to shipping. Its primary focus is on becoming the world’s leading supplier of materials used in the energy transition, particularly copper.

To fund this aggressive expansion, Glencore is using the enormous cash flows generated by its coal division. The costs associated with this are minimal, as the sector is in wind-down phase, but global demand remains high.

By doing this, rather than seeking financing from loans in the capital markets, Glencore maintains a much cleaner balance sheet. Essentially, coal is bankrolling the firm’s transition to a green mining powerhouse.

What are the risks and rewards here?

Glencore’s strategy is not without its challenges. Regulatory pressure on coal could disrupt cash flows, for example. Another is geopolitical instability in key mining regions, which could delay expansion plans.

Yet global copper demand is forecast to increase by over 20% by 2030 and to double by 2050. And long-term price predictions project copper surging toward $15,000 (£11,300) per metric ton from around $13,000 now.

Given this and provided Glencore successfully channels coal‑generated cash into its transition metals portfolio, it could be one of the most profitable beneficiaries of the global energy shift.

Analysts forecast that the company’s earnings will increase by an annual average of 22% over the medium term at least. And it is ultimately this that powers any firm’s share price towards its fair value over time.

So where’s fair value for the shares?

When valuing a business, discounted cash flow (DCF) analysis remains one of the clearest ways to estimate where a stock should trade, in my experience.

It does this by projecting future cash flows and translating them into today’s money. The less straightforward those forecasts are, the heavier the discount becomes. And differing assumptions here sometimes can mean analysts’ DCF outcomes can vary occasionally.

But using my own assumptions — including an 8.5% discount rate — Glencore screens as 54% undervalued at its current £5.58 price.

That points to a fair value of £12.13 — more than twice today’s price.

This difference between price and value is critical in maximising profits, as historically shares trade to their fair value over time. So, if that trend continues, this could be a tremendous potential buying opportunity, if those DCF assumptions hold good.

My investment view

I already hold a stock (Rio Tinto) in the commodity sector, so adding another would unbalance my portfolio.

However, if I did not have this I would buy Glencore now for its strong earnings growth prospects and energy transition strategy.

For the same reasons, I think it well worth the consideration of other investors.

Should you invest £5,000 in Glencore Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Glencore Plc made the list?

Simon Watkins owns shares in Rio Tinto.

The post Down 10% to below £6 now! Here’s why Glencore’s share price looks a bargain to me anywhere under £12.13 appeared first on The Twelfth Magpie.

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Stocks to buy for high second income often share a few traits, with the key one being robust earnings forecasts. That is why global terrestrial and digital media giant ITV (LSE: ITV) stands out to me right now.

It has strong earnings growth projected, which should drive its already solid cash generation and sound balance‑sheet.

And around 81p the shares are trading considerably lower than their ‘fair value’ implies they should. Indeed, just £500 would buy investors 617 of them now.

So, how much second income could we be looking at?

Are dividends set to go higher?

ITV has paid the same annual dividend of 5p for the last four years, beginning in 2022. But because dividend yields change as a firm’s stock price and annual payout alter, the dividend yield has differed.

In 2022 it was 6.7%, in 2023 it came in at 7.9%, in 2024 it edged down to 6.8%, and in 2025 it was 6.1%. However, all of these remain way above the current FTSE 100 average of 3.1% and the FTSE 250’s 3.4%.

As of now, the stock delivers a dividend return of 6.2%, but analysts forecast this will go higher. The projections are that the dividend will increase to 5.2p by 2028, giving a yield of 6.4%.

What sort of a second income?

So, a £20,000 holding in the shares would make £17,119 in dividends after 10 years and £107,861 after 30 years.

The numbers are based on the forecast 6.4% as an average and on dividend compounding being utilised. The process involves reinvesting the dividends to harness the full power of compounding over time.

At the end of the 30 years, the value of the holding (including the original £20,000 investment) would be £127,861.

And that would produce a yearly income of £8,183!

Are the shares going cheap?

Discounted cash flow (DCF) analysis identifies where any stock ‘should’ trade. It takes future cash flows for the underlying business and then discounts them to the present.

When those projections become less certain, the discount applied increases and differing assumptions here sometimes is why analysts’ DCF outcome sometimes vary. However, my own modelling — incorporating an 8.2% discount rate — shows ITV is 31% undervalued at its current 81p level.

That implies a fair value of the stock of £1.17.

Importantly here, history has shown that share prices move to their fair value over time. So in this case, that gap highlights a potentially superb buying opportunity if those DCF forecasts hold good.

My investment view

Supportive of long-term rises in ITV’s share price and dividends are analysts’ forecasts of 6.1% annual average earnings growth over the medium term at least.

A risk to this is the continued fragility of the UK advertising market, which remains sensitive to economic slowdowns. Another is the rising cost and competitive intensity of premium content production.

Nevertheless, its full-year 2025 results showed statutory operating profit soaring 14% year on year to £363m.

I have several high-yielding, undervalued stocks already, and am not looking for another. But for investors looking to construct a high-powered portfolio delivering strong second income, I think ITV is well worth considering.

Should you invest £5,000 in ITV right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if ITV made the list?

Simon Watkins does not hold any positions in the companies mentioned.

The post £500 gets 617 shares in one of the top FTSE income stocks to buy! appeared first on The Twelfth Magpie.

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AstraZeneca’s (LSE: AZN) share price continues to look materially out of step with the strength of the underlying business.

The company is delivering broad‑based revenue growth across oncology, vaccines, and rare diseases. And this is supported by one of the deepest late‑stage pipelines in global pharma.

With strong earnings growth forecast, and multiple blockbuster candidates approaching key regulatory milestones, the long‑term outlook remains exceptionally strong.

So, where ‘should’ the stock be trading right now?

Where’s ‘fair value’ here?

The true worth (‘fair value’) of a share is often different to its price, and sometimes by a long way. This is because price is simply a short-term marker of where the market is prepared to trade at any point. But value reflects the long-term fundamentals of the underlying business.

The difference between the two things is crucial for investors maximising their profits over time. The reason is that history shows that share prices tend to trend toward their fair value over the long run.

The best way I have found to ascertain fair value is discounted cash flow (DCF) analysis. It uses cash flow forecasts for the underlying business and then discounts them back to today.

When those projections are less clear, the discount increases, and different assumptions can lead to varied DCF outcomes among analysts. My DCF modelling — including a 7.4% discount rate — shows AstraZeneca stock is 41% undervalued at its present £133.41 level.

That implies a fair value of £226.12 — much higher than where it is now. So, if historical price-to-value convergence trends continue, and the DCF assumptions hold good, this could be a potentially great buying opportunity.

Is it undervalued to competitors too?

DCF is the acid valuation test for professional investors, but comparisons with peers can provide a useful broader context.

On the key price-to-earnings ratio, AstraZeneca trades at 26.7 — second bottom of its competitor group, which averages 46.7. The firms comprise Novo Nordisk at 10.4, Pfizer at 28.5, Eli Lilly at 39.2, and AbbVie at 108.7.

So, it is very undervalued on this basis.

The same is true of its 4.6 price-to-sales ratio compared to its peer average of 8.

How good are the earnings forecasts?

The key question is whether AstraZeneca’s earnings trajectory is strong enough to pull the share price toward that fair value.

A risk here is any regulatory delays or adverse trial outcomes, which could slow the commercial rollouts of key late‑stage drugs. Another is intensifying competition in key areas such as oncology and immunology which may pressure pricing and squeeze margins.

Nonetheless, analysts project the company’s earnings will increase by a very strong 13.5% a year on average to end-2028 at minimum.

This looks well supported by its robust and diversified product pipeline, boasting over 180 projects in clinical development. This is squarely focused on hitting the company’s $80bn (£45bn) total revenue target by 2030 (from 2025’s $58.7bn).

My investment view

Taken together, these factors underline AstraZeneca’s deep pipeline strength, clear undervaluation, and robust earnings momentum.

Given these factors, I will certainly be adding to my holding in the stock very soon. And my eye has also been drawn to other deeply undervalued shares that offer high dividend yields too.

Should you invest £5,000 in AstraZeneca Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if AstraZeneca Plc made the list?

Simon Watkins owns shares in AstraZeneca.

The post Down 14% to below £135, here’s where AstraZeneca’s deeply undervalued share price ‘should’ be trading today appeared first on The Twelfth Magpie.

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National Grid’s (LSE: NG) share price has fallen 15% since its 2 March one-year traded high of £12.09. But that drop alone does not make it a bargain, because price and value are two different things in shares.

Price is simply the number buyers and sellers settle on at a given moment. But value reflects the underlying strength and prospects of the business itself.

For long‑term investors, that distinction is crucial. Over time, market prices tend to drift towards a company’s true worth — its ‘fair value’. This is why understanding that gap is one of the most powerful tools for maximising long-term investor profits.

So, what is really going on here?

How does it compare to peers?

As a long-term investor, I am cautious about leaning too heavily on simple valuation comparisons between stocks.

They are backward‑looking, telling you more about where a share price has travelled than where the business itself is heading. Even the forward versions only stretch a year into the future — the same narrow horizon analysts use for price targets.

Still, these relative measures can be useful as a quick temperature check, showing how a company is priced against competitors.

National Grid’s forward price-to-sales ratio of 3 looks expensive compared with its peers’ average of 1.4. That group includes E.ON at 0.6, Engie at 0.9, Enel at 1.2, and Iberdrola also at 3.

However, the picture flips when looking at earnings. National Grid trades on 13.5 times forward earnings, below the peer average of 16, making it look relatively inexpensive here.

The same is true of its price‑to‑book ratio: at 1.5, it sits comfortably below the 2.4 average of its competitors.

What does the acid test reveal?

To judge whether National Grid’s current share price is fundamentally under- or overvalued, I need to ascertain its ‘fair value’. During my years in investment bank trading, I found the optimal way to do this was through discounted cash flow (DCF) analysis.

It focuses on the cash any business is likely to generate. It then discounts those flows back to today to produce a per‑share valuation. The less certainty there is around the forecasts, the higher the discount rate needs to be. And differing assumptions occasionally here are why analysts’ DCF can sometimes vary.

But using my own DCF modelling, including an 8% discount rate, National Grid screens as 40% overvalued at its current £12.12 price.

That implies a fair value of £8.66 — significantly below where the shares trade today.

My investment view

I would never consider a stock that looks this overvalued. Even if I already held it, I would reassess my position, unless its earnings prospects were exceptional, which might allow the price to grow into its valuation in the short term.

However, analysts forecast National Grid’s earnings will grow by an average 11.2% a year to end-2028. This would not fill the gap between valuation and price.

And there are risks here too. One is any tightening of the regulatory framework that could squeeze its margins. Another is rising interest rates that could worsen its already huge debt repayments on government-mandated infrastructure improvements.

That said, I do have my eye on other FTSE firms that are deeply undervalued and offer high dividend yields while investors wait for that gap to close.

Should you invest £5,000 in National Grid Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if National Grid Plc made the list?

Simon Watkins does not hold any positions in the companies mentioned.

The post Down 15%! Is National Grid’s share price really a bargain right now? appeared first on The Twelfth Magpie.

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Passive income is all about building a reliable second income stream, and the FTSE 100’s British American Tobacco (LSE: BATS) is built for exactly that.

Its dividend yield is consistently market-beating, and the cash flows behind it remain some of the most dependable in the leading index. There is also a major gap between its price and ‘fair value’, which could provide share price gains.

So what sort of returns am I looking at?

Dividends set to rise?

The firm’s current dividend yield is 5.5%, based on the 240.24p 2025 payout and the present £46.02 share price. That is way more than the FTSE 100 average of 3.1% and the FTSE 250’s 3.4%.

These returns can change, of course, as share prices and annual dividends alter. But analysts project that British American Tobacco will increase its dividends to 251.2p this year, 259.2p next year, and 269.8p in 2028.

These would generate respective dividend yields of 5.8%, 6%, and 6.2%.

How much in returns over time?

So, another £20,000 holding in the stock would make me £17,119 in dividends after 10 years, on the forecast 6.2% as an average.

The figure also includes the payouts being reinvested into the shares to harness the full turbocharging power of dividend compounding.

On the same basis, the returns would rise to £107,861after 30 years — the end of the standard long-term investment cycle. That would mean the holding’s total value (including the £20,000 stake) would be £127,861.

And that would deliver a yearly income of £7,927!

What about share price gains as well?

Historically, the price of a share tends to converge to its fair value. This reflects the underlying long-term business fundamentals rather than the short-term factors driving the price.

Discounted cash flow (DCF) analysis can identify the fair value of any stock by projecting future cash flows and discounting them back to today. Greater uncertainty in those forecasts will increase the discount applied. And differing assumptions sometimes here can produce varying DCF outcomes from analysts.

Using my own assumptions — including an 8.7% discount rate — British American Tobacco appears 32% undervalued at its current £43.37 price.

That suggests a fair value of £63.78. So, if markets continue to converge toward fair value, this will mean the £20,000 holding being worth £29,403!

Is the underlying business solid?

Ultimately, the long‑term investment case rests on steady earnings growth, and here the outlook remains solid. Analysts forecast these will grow by an annual average of 4.5% over the medium term at least.

A risk here is a further tightening in regulatory pressure on tobacco products, which could squeeze margins. Another is any delay in the firm’s transition towards next‑generation products, which could affect cash flow growth.

That said, the company forecast 4%-6% adjusted operating profit growth and 5%-8% adjusted diluted earnings per share growth for 2026 in its 2025 annual results.

My investment view

I already hold shares in the firm, based on its solid earnings growth outlook. This should keep pushing its dividends up — and its share price to fair value — over time, in my view.

Consequently, I will be adding to my holding very soon. And my attention has also recently been captured by a couple of other deeply undervalued stocks offering very high dividend yields too.

Should you invest £5,000 in British American Tobacco P.l.c. right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if British American Tobacco P.l.c. made the list?

Simon Watkins owns shares in British American Tobacco.

The post How much second income am I aiming for with £20,000 in this superb FTSE 100 dividend star? appeared first on The Twelfth Magpie.

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The FTSE 250’s Greencore (LSE: GNC) is starting to look like one of the market’s most overlooked value opportunities.

After a transformational acquisition, the world’s largest maker of pre‑packed sandwiches has seen a huge rebound in adjusted profitability. It has also opened a clear path to major cost synergies.

However, the shares still trade as if the company is stuck in its old low‑margin cycle.

For savvy investors looking beyond the short‑term noise, this disconnect is becoming increasingly difficult to ignore.

So where ‘should’ the stock be priced?

Looking for ‘fair value’

In stock markets, price and value serve very different roles. Price represents the level at which market participants are willing to transact. But value reflects the economic reality of the business and its future cash flows.

For long-term investors, the gap between these measures is highly significant. Prices tend to trade towards fair value over extended periods. This is why recognising that difference can be a key source of enhanced investment returns over time.

The gold standard of professional investors for working out any stock’s fair value remains discounted cash flow (DCF) analysis. It cuts through short-term market noise and estimates what a stock is genuinely worth on a long-term view. It does this by projecting future cash flows for the underlying business and discounting them back to today.

The greater the uncertainty of those cash flow forecasts, the higher the discount applied. Differences in these assumptions can produce varying outcomes from analysts sometimes. But using my own inputs, including a 7.8% discount rate, Greencore shares appear 59% undervalued at their current £1.95 price.

That places fair value around £4.76 — more than twice the current level. So, if stock prices continue in their historical trend of trading to their fair value, this could be an exceptional buying opportunity if that DCF modelling proves good.

Does the core business support this?

To judge whether that valuation gap is genuinely justified, we need to look closely at the underlying business itself. This crucially includes its earnings trajectory.

A risk here for Greencore is inflation volatility infood costs linked to global supply pressures. Sudden spikes could squeeze margins and disrupt planning.

Another is any slippage in integrating Bakkavor after the £1.2bn mega-merger acquisition on 16 January this year. Delivering the targeted synergies on schedule is crucial for the margin expansion story.

Nevertheless, analysts forecast its earnings will rise by a stunning 49.9% on average each year over the medium term at minimum. This looks well supported by its H1 2026 results published on 27 May this year.

Adjusted operating profit soared 62.2% year on year to £73.3m, and adjusted EBITDA jumped 52.1% to £111.2m. The figures underline the disciplined cost control and operational leverage now coming through the enlarged business.

My investment view

I already have shares in the food retail sector through my holding in Marks and Spencer. Another stock in the same area would unsettle the risk/reward balance of my portfolio.

But if I did not have this, I would buy the stock now, given its huge earnings potential and massive price-to-value gap.

As it is, I now have my attention on other highly discounted shares in other sectors, some offering high second income potential too.

Should you invest £5,000 in Greencore Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Greencore Group Plc made the list?

Simon Watkins owns shares in Marks and Spencer.

The post Here’s why this stunning sub-£2 FTSE 250 stock ‘should’ be trading nearer to £5 appeared first on The Twelfth Magpie.

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A Stocks and Shares ISA remains one of the most powerful tools UK investors have for building long‑term wealth. It not only provides an exemption from income and capital gains tax but also allows for withdrawals at any age.

Keeping every penny of returns sheltered from the taxman can make a dramatic difference to compounding over the years. And this FTSE 100 insurance and investment giant remains one of my standout investments for dependable income and steady growth.

So, how much can I make from it over time?

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

What are the dividend forecasts?

Aviva (LSE: AV) has a current dividend yield of 6.3%, based on its £6.28 share price and 39.3p 2025 payout.

Changes in either the price or the payout can push the yield down or up over time. However, analysts expect the firm’s dividend yields to rise to 6.6% this year, 7.1% next year, and 7.6% in 2028.

All of these are more than double the present FTSE 100 average of 3.1%.

What does this mean for yearly income?

Another £20,000 investment by me in the stock could make me £22,663 in dividends after 10 years.

The figure is based on the forecast 7.6% as an average and on the dividends being reinvested in the shares. This is known as dividend compounding, and it has a turbocharging effect on dividend income the longer it goes on.

After 30 years on the same basis — a standard investment cycle for long-term investors — the dividends would rise to £174,133. Including the initial £20,000 investment, the holding would be worth £194,133 by then.

And at that point, the shares would be generating £14,754 a year in income for me!

How does the growth engine look?

Underpinning sustained gains in dividends for any firm is consistent growth in profits over time.

A risk here for Aviva is a rise in the costs associated with settling claims, such as higher medical or property-repair expenses. Another is tighter regulatory capital pressure, where higher solvency requirements or shifts in capital rules. Both could impact margins, squeeze cash flow and slow dividend gains.

Nevertheless, analysts project Aviva’s earnings will grow at an average of 15.4% a year over the medium term at least. This looks extremely well supported to me by its 2025 results released on 5 March this year.

Operating profit soared 25% year on year to £2.2bn, while cash remittances edged up to £2.1bn. The figures reflected the robustness of Aviva’s diversified insurance, wealth and retirement business model.

Moreover, management expects over £7bn of cash remittances between 2026 and 2028, giving exceptionally strong visibility for future cash flows.

My investment view

The strong dividend outlook, rising earnings and exceptional cash‑flow visibility give me real confidence in the long‑term income potential here.

Moreover, the underlying business offers a rare blend of resilience, scale and capital discipline. All this matters enormously when compounding returns inside a Stocks and Shares ISA.

So, for investors seeking a dependable, steadily growing income stream sheltered from tax, this is exactly the kind of business I believe is worthy of serious consideration.

And I will certainly be buying more of the stock very shortly myself.

Should you invest £5,000 in Aviva Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aviva Plc made the list?

Simon Watkins owns shares in Aviva.

The post How much would I need in a Stocks and Shares ISA to earn £1,230 a month in second income? appeared first on The Twelfth Magpie.

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World-leading FTSE biomanufacturing specialist Oxford Biomedica (LSE: OXB) is down 37% from its 16 January £9.57 one-year traded high.

This could signal a huge bargain to be had. Or it may simply reflect the downwards re-rating of a business that is simply worth less than it was before.

So, which is it?

Is the business fundamentally worth less?

There is one key reason why the stock is down, in my view. But crucially for savvy investors, it is a short-term factor only. 

In its 2025 results, released on 26 March this year, the firm warned that H1 this year is likely to be loss-making on an EBITDA level. However, it explained this was due to the phasing of revenues, planned shutdowns and non-recurring costs. The company then went on to project double-digit operating EBITDA margin in H2.

It is expected to benefit from the completion of the Adeno-Associated Virus (AAV) and lentiviral vector technology transfers in France and the ramp-up of US revenues. These are the primary delivery vehicles used in gene therapy to transport therapeutic genetic material into a patient’s cells.

Management added that contracted orders of £224m in 2025 and revenue backlog of around £204m reinforce confidence in continued growth through 2026 and beyond.

Are these supported in analysts’ forecasts?

Profit powers any firm’s share price higher over time, but risks do remain for Oxford Biomedica, as with any firm.

One is if utilisation in its expanded US facilities ramps up more slowly than expected. Another is the variability in the timing of client programmes within the contract development and manufacturing model.

Nevertheless, analysts forecast that Oxford Biomedica will see its profits grow by a whopping yearly average of 75.3% to end-2029 at minimum.

So what’s the stock really worth?

The true value (‘fair value’) of a share is rarely the same as its current price. Its price simply reflects what buyers and sellers agree on at a particular moment. But its value is rooted in the strength and prospects of the underlying business.

For long‑term investors, that gap matters enormously. Historically, share prices tend to converge to their fair value over time. And that is why understanding the price-to-value difference can be so powerful for maximising investor profits over the long run.

Discounted cash flow (DCF) analysis is the best method I found while an investment bank trader for identifying fair value. It does this by forecasting future cash flows and discounting them to today’s value.

When those forecasts become less certain, the discount applied increases, which is why analysts’ DCF outcomes can differ. My modelling — including a 7.7% discount rate — shows Oxford Biomedica shares are 72% undervalued at their present £6.02 level.

That implies a fair value of £21.50 — more than triple the current price. So, if markets continue to correct this price-to-value gap over time, this could be an excellent buying opportunity if those DCF assumptions hold.

My investment view

I already hold shares in Oxford Biomedica, based on its strong underlying business offering and high profit growth forecasts.

Given the extraordinary dip in price that has exacerbated the already high price-to-value gap I will buy more soon.

I also have my eye on other deeply discounted stocks in other sectors, some with very high dividend yields too!

Should you invest £5,000 in OXB right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if OXB made the list?

Simon Watkins owns shares in Oxford Biomedica.

The post Just above £6 today, here’s where this deeply undervalued FTSE biotech star ‘should’ be trading right now appeared first on The Twelfth Magpie.

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• Up 50% in a year! That’s not the only reason I’d consider buying Barclays over Nvidia stock today
• Here’s why I bought this 7.6%-yielding FTSE 100 dividend stock instead of saving in a Cash ISA