In recent years, demand for electric vehicles (EVs) has risen. It is estimated that this demand will only continue rising. I believe this is linked to the race to cut carbon emissions, which has gained major traction from governments around the world. One FTSE 250 stock that could benefit in the long-term is TI Fluid Systems (LSE:TIFS). Should I buy the shares?

Essential parts for EVs

TI Fluid Systems designs, manufactures, and sells fluid storage, delivery, and thermal management systems for automobiles. These parts and components are essential for all automobiles to help them operate successfully.

So what’s happening with TI Fluid Systems shares? Well, as I write, they’re trading for 128p. At this time last year, the stock was trading for 242. This is a 47% decline over a 12-month period. It is worth noting many FTSE stocks have pulled back in recent months due to economic volatility and the tragic events in Ukraine.

The bull and bear case

To start with some positives, I believe TI has some defensive capabilities. This is because its products are essential in all vehicles, not just EVs. Unless there is some cutting edge technology around the corner that means cars will no longer require fluid storage, transfer, or thermal management, its products should be needed for many years to come.

In addition to this, the EV boom could come at the perfect time for TI to help boost growth. Recent statistics showed that the EV market is a burgeoning one in the UK, and worldwide. According to the International Energy Agency, EV adoption has surged since the pandemic. Furthermore, there is a chance with EV adoption playing a major part, net zero emissions could be achieved by 2050.

Finally, at present, TI shares would boost my passive income stream through dividends. The current dividend yield stands at 1.7%. This is slightly less than the FTSE 250 average of 1.9%. I am aware that dividends are never guaranteed, however.

To the bear case of TI Fluid shares. Firstly, growth from the EV sector may be a long way off. This is because the EV market has been hampered by the semiconductor shortage. To provide some context, semiconductors are essential parts in EVs. Furthermore, EV adoption in developing countries is taking longer compared to developed countries. This is linked to higher costs of infrastructure and the price point of EVs.

Next, at present TI Fluid shares have come under pressure from macroeconomic headwinds. These include soaring inflation and the rising cost of materials. Higher materials costs for its operations could eat into profit margins which affect growth initiatives as well as shareholder returns.

A FTSE 250 stock I’m going to monitor

To summarise, I believe TI Fluid Systems is in a great position to benefit from the EV boom, as well as the current automobile market. Current headwinds, as well as issues in the EV market are putting me off, however.

Right now I am going to keep TI Fluid Systems on my watch list, and monitor the developments in each of the areas mentioned above. I may change my stance later, once I know more and see if any of the issues pushing the shares down begin to subside.

The post Should I buy this FTSE stock to benefit from the EV boom? appeared first on The Twelfth Magpie.

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Jabran Khan has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

There is a big focus on renewable energy sources currently as the world races to cut carbon emissions. One growth stock that could play a part is Ceres Power (LSE:CWR). I must admit I hadn’t heard of it until I began researching the sector for investment purposes some time ago. Should I buy Ceres shares?

Renewable energy technology

As an introduction, Ceres is a leading developer of fuel cell technology. These fuel cells help the production of clean, low-cost energy. It currently has one flagship product, known as Ceres SteelCell.

So what’s happening with Ceres shares currently? Well, as I write, they’re trading for 389p. At this time last year, the stock was trading for 998p. This is a 61% decline over a 12-month period.

The investment case

Let’s take a look at some bull and bear aspects of Ceres shares to help me make a decision on my position.

First of all, Ceres as a growth stock has lots of future potential ahead, in my opinion. There is lots of policy support from governments to find alternative, clean energy solutions. As well as policy support, there is a lot of money being thrown at this from the public and private sector. An example of this is Ceres’ partnerships to date. As a smaller firm, it may not have the financing and infrastructure in place yet to progress its product line. These partnerships will enable that, and could eventually translate into performance growth, and returns for shareholders.

It is worth noting that Ceres will make money from licensing fees from said partnerships. To date, it has some lucrative partnerships, including one with energy powerhouse Shell, another with Chinese firm Weichai, and South Korean firm Doosan Group.

Investor sentiment towards Ceres could certainly boost shares too as the rise of ethical investing (ESG) continues. Millennials for example are looking for businesses to invest in that are ethical and Ceres ticks this box.

Away from the positives, it is worth noting that despite Ceres’ share price fall, the shares do look expensive. I find this is common in a growth stock as the potential has not been realised yet, but there is some excitement around future potential. In addition to this, Ceres is yet to turn a profit. I do believe this could change imminently as some of its partnerships are set to yield licence fees in the coming fiscal year. I will keep a keen eye on future trading updates.

A growth stock I will continue to monitor

Taking everything into account, I’m going to keep Ceres Power shares on my watch list for now. Based on my research and due diligence, there is lots of potential ahead, and the market excitement and partnerships signed to date demonstrate this. For me personally, I want to see more meat on the bones from a financial and trading updates point of view, and for the business to become profitable for me to be able to truly understand how it could boost my holdings.

The post Here’s 1 growth stock you probably haven’t heard of! appeared first on The Twelfth Magpie.

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Jabran Khan has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

EMIS Group (LSE:EMIS) saw its shares jump in June after a takeover bid was accepted. Let’s take a closer look at the details, as well as determine whether now would be a good time for me to buy the FTSE AIM shares for my holdings.

Software for healthcare

EMIS is a UK-based software-as-a-service (SaaS) provider. It creates, sells, and maintains many systems that the NHS and GP surgeries use. Its best known product is Patient Access, which allows the public to manage their healthcare needs.

As I write, EMIS shares are trading for 1,890p. At this time last year, the stock was trading for 1,392p, meaning it has seen a 35% return over a 12-month period. When news of the takeover bid broke in June, the shares instantly spiked by approximately 50% to current levels, and have remained there since.

Takeover bid

Back in June, health services business Optum UK bid £1.24bn, or 1,925p per share, for EMIS. The offer was a 49% premium to EMIS’ closing share price the day before the offer was announced. Since then, the EMIS board has approved the takeover but the legal process has not yet been completed. This means there is still a chance it may not happen.

Based on information released to date, Optum is looking to take EMIS to new heights and drive growth. Details around what the company will look like have not been released just yet. Based on my research I’m guessing EMIS will still operate as an independent business, away from the parent company, but I could be wrong. Time will tell.

The EMIS investment case

First off, I’m buoyed by EMIS’ business model. Due to the complex and essential nature of its solutions, many of them are what is referred to as ‘sticky’ software products in the industry. This basically means they remain in place for a long time as they can be tough and time-consuming to replace. The positive here is that EMIS generates lots of recurring revenue, which helps boost growth and shareholder returns.

At present, EMIS shares would boost my passive income stream through dividends. The current dividend yield on offer is 1.9%, which is in line with the FTSE 250 average of 1.9%. I am aware that dividends can be cancelled, however.

Finally, I can see EMIS has a good track record of performance. I am conscious that past performance is no guarantee of the future. However, looking back, I can see it has grown revenue and profit in the past three out of four years. In 2020, levels dipped slightly, due to the pandemic.

So looking at some risks, EMIS shares are trading at all-time highs, on a price-to-earnings ratio of close to 40. If the takeover does not happen, or any other negative news were to emerge, the shares could fall significantly.

Taking everything into account, I’ve decided to keep EMIS on my watch list for now. The lack of clarity around the takeover, as well as what the company may look like if the takeover is successful helps me come to my conclusion. The FTSE AIM incumbent’s current valuation is also a tad high for my liking.

The post Here’s why this FTSE AIM stock recently saw its share price soar by nearly 50%! appeared first on The Twelfth Magpie.

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Jabran Khan has no position in any of the shares mentioned. The Motley Fool UK has recommended Emis Group. 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.

I think the FTSE 100 could hit its next big milestone of 8,000 points in 2023. Despite the energy crisis ravaging the UK right now, the Footsie seems to be hitting higher levels after every mini crash. Just in September, the UK’s premium index has rallied nearly 5% and I think this is a strong sign that the march to 8,000 is already under way. I’m looking at two FTSE 100 shares for my growth portfolio and I think I’ve found potential winners. 

A rare tech gem in the FTSE 100

One company that has caught my eye recently is Sage Group (LSE:SGE). The software firm is an established global player with a robust business model and strong cash flow. It’s the third-largest business software provider in the world, used by over 6m people/businesses worldwide.

The company offers its products on a subscription basis and has an impressive 99% renewal rate since 2019. Sage saw its annual recurring revenue grow by 7.7% in the financial year (FY) 2021. 

Using this cash, the company has been developing its cloud storage business, which is projected to be a $40bn industry by 2030. This venture brought in £997m last year, which contributed to the 5% annual revenue growth. 

However, Sage Group primarily works with small and medium-sized businesses in the US, Europe and Asia. While its business management software sees strong renewal rates, a recession could change this. Rising bills will force businesses to cut extra costs, including software services.

But I’m still bullish on the firm given its cash-rich business model and strong global presence. Despite economic concerns, Sage’s financials make it a market leader. The tech firm is also reinvesting and expanding which is why it’s on my watchlist of top FTSE 100 shares. 

Tested product, new market

Historically, businesses with an established business model and brand strategy have found it easier to expand into global markets. McDonald’s Corp’s highly successful model is the best example.

Burgers were largely unknown in Asian countries like India and Korea. But McDonald’s is now a major force in these countries. Thanks to targeted products and marketing, the fast-food chain has established thriving businesses in very diverse culinary markets. Airtel Africa (LSE:AAF) is doing the same thing with mobile connections. 

Using the business model perfected by its parent company Bharti Airtel in India, the telecoms firm has become a premium service in Africa. The company quickly identified one key product that could put it above the competition. 

By deploying Airtel Money, a mobile-to-mobile fund transfer service, Airtel Africa tapped into one of the world’s largest digital payment networks. This attractive, low-cost model has caused Airtel Africa shares to jump over 300% since the pandemic.

The biggest threat it faces is 5G expansion and growing competition. Africa is fast becoming a target for global business superpowers. Given the earnings potential for telecom firms in the region, Airtel Africa could be undercut by giants like Verizon when bidding for 5G bands in the future. 

However, the company has been careful in securing some key territories that put it in a strong position going forward. I’m watching this FTSE 100 share very closely and could be tempted to make an investment in the coming months. 

The post Race to 8,000: 2 FTSE 100 shares I’d buy before the next bull run appeared first on The Twelfth Magpie.

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Suraj Radhakrishnan has no position in any of the shares mentioned. The Motley Fool UK has recommended Airtel Africa Plc and Sage Group. 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.

Due to current macroeconomic headwinds and the tragic events in Ukraine, some FTSE stocks have been on a downward trajectory in recent months. I believe there are some bargains out there. One that caught my eye recently is Tyman (LSE:TYMN). Let’s take a look to see whether I should buy or avoid the shares.

Windows and doors

As a quick introduction, Tyman manufactures and sells windows, doors, other access solutions, as well as other components linked to these products for the construction industry. With a presence in over 16 countries globally, the firm employs over 4,000 people.

So what’s happening with Tyman shares currently? Well, as I write, they’re trading for 216p. At this time last year, the stock was trading for 422p, which is a 48% decline over a 12-month period.

A FTSE 250 stock with challenges ahead

I believe the biggest challenge that Tyman faces is the current headwinds. These include soaring inflation, the rising cost of materials, as well as the global supply chain crisis. Rising costs will put pressure on profit margins. If Tyman increases its prices, it could risk losing custom. In addition to this, supply chain constraints could hamper its ability to manufacture and sell its products.

Next, the current cost-of-living crisis brought on by the issues noted above could see demand for Tyman’s products fall. This applies to both domestic and commercial customers. A drop in construction projects due to budget constraints could see performance and returns fall for Tyman.

Why I like Tyman shares and my verdict

So to the bull case then. Firstly, I am buoyed by Tyman’s recent performance track record. I am conscious that past performance is no guarantee of the future. However, looking back, I can see it has doubled profit since 2019 due to increased demand when the pandemic struck and many splurged on DIY projects while at home. It has also decided to reinvest this into growth and enter new markets, which is pleasing to see and could support future returns.

Next, Tyman shares would boost my passive income stream through dividend payments. Its current dividend yield stands at 6%. This is higher than the FTSE 250 average of 1.9%. I am aware that dividends can be cancelled at any time, however. Furthermore, the shares look value for money right now on a price-to-earnings ratio of close to nine.

Finally, despite shorter-term demand potentially falling, I believe Tyman could benefit from long-term demand for its products. This is because infrastructure spending throughout the world is only increasing. A core part of this is in the construction of homes, office buildings, hospitals, and more. All of which require products Tyman sells. It could leverage its global profile to boost its performance and returns.

In conclusion, I am not worried that Tyman shares will continue to fall. In fact, they have fallen into the bargain category for me. With an extensive profile, a passive income opportunity, and active growth prospects, I would buy Tyman shares for my holdings for long-term growth and returns. I do expect to encounter some volatility in the shorter term, however.

The post Could this FTSE building stock be primed for long-term growth and returns? appeared first on The Twelfth Magpie.

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Jabran Khan has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Director dealings are essentially insider transactions for shares between directors and the companies they work for. These dealings are always made public, and are often considered a good indicator of a company’s future prospects. However, they don’t get nearly as much attention as other company news due to their complex nature. Nonetheless, here I’m breaking down this week’s biggest director dealings from three FTSE firms.

Vodafone

Vodafone (LSE:VOD) is a British multinational telecommunications company. It predominantly operates services in Asia, Africa, Europe, and Oceania. The company runs at least some form of operations in over 150 countries.

Following lacklustre numbers from its Q1 trading update, the share price dropped by 5%. It has stayed there since. Despite that though, it’s a sign of confidence when a high-ranking director purchases shares. And this week, Vodafone’s Chairman decided to reinvest his dividends into buying more Vodafone shares.

• Name: Jean-François van Boxmeer
• Position of director: Chairman
• Nature of transaction: Dividend shares
• Date of transaction: 10 August 2022
• Amount bought: 9,975 @ £1.21
• Total value: £12,069.75

Deliveroo

Deliveroo (LSE: ROO) is a British online food delivery company. It operates in over 200 locations across the UK, and is the second-biggest food delivery platform in the country. It also operates internationally with operations in France, Singapore, Australia, and many more.

In this week’s transaction, a director exercised his option to redeem stock compensation. Following this, he opted to sell approximately half of the shares received to cover tax liabilities. That being said, it’s worth noting that this is a monthly occurrence from the company’s CFO. As such, these actions shouldn’t impact investor sentiment surrounding the stock. It’s worth pointing out, however, that the sale of these shares dilute shareholders’ value. This is because there are now more Deliveroo shares floating on the market.

• Name: Adam Miller
• Position of director: Chief Financial Officer
• Nature of transaction: Award shares
• Date of transaction: 15 August 2022
• Amount vested: 83,400 @ £0.96
• Total value: £80,247.48

• Name: Adam Miller
• Position of director: Chief Financial Officer
• Nature of transaction: Sales of shares to cover tax liabilities
• Date of transaction: 15 August 2022
• Amount sold: 40,402 @ £0.95
• Total value: £38,381.90

FirstGroup

FirstGroup (LSE: FGP) is a British multi-national transport group. The FTSE 250 firm is the leading transport operator in the UK and North America. It is widely known for being a provider of public transport, especially buses in the UK.

Rather surprisingly, its shares have managed to outperform the wider UK market index this year. But after the share price took an 11% hit last week, a couple of large director dealings were carried out. The first involves a non-executive director purchasing a substantial number of shares. But what really caught my eye were the conditional share awards that could be awarded to FirstGroup’s CEO and CFO. This should shore up investors’ confidence in the stock, as the group’s management will have to perform and meet investors’ expectations in order for these award shares to vest.

• Name: Sally Cabrini
• Position of director: Non-Executive Director
• Nature of transaction: Purchase of shares
• Date of transaction: 17 August 2022
• Amount vested: 10,000 @ £1.15
• Total value: £11,482

• Name: Graham Sutherland
• Position of director: Chief Executive Officer
• Nature of transaction: Award shares
• Date of transaction: 18 August 2022
• Amount vested: 972,590 @ Nil
• Total value: N/A

• Name: Ryan Mangold
• Position of director: Chief Financial Officer
• Nature of transaction: Award shares
• Date of transaction: 18 August 2022
• Amount vested: 1,003,226 @ Nil
• Total value: N/A

Types of Shares

To provide context, there are a few types of shares that can be purchased by directors. Some directors opt to purchase shares via the open market. Having said that, directors also have the option to purchase and receive shares via a share incentive plan (SIP).

A SIP is an employee plan for companies within the UK to flexibly award shares to employees. Publicly listed companies normally exercise this option because it’s tax-efficient for both the employer and its employees.

In this week’s set of director dealings, a few types of SIPs were exercised. For starters, Vodafone’s Chairman opted to purchase more Vodafone shares from the dividends he received from his current shares.

On the other hand, Deliveroo’s CFO decided to exercise the option of redeeming his restricted stock units. These are a form of award shares which allow for directors to redeem shares at a later date, as either as part of their salary or based on meeting performance obligations.

FirstGroup’s CEO and CFO were awarded shares as well, but these will only be vested once performance targets are met. In this case, more than 1.5m shares are up for grabs between the two directors under the operator’s long-term incentive plan (LTIP). The LTIP award will normally vest on the third anniversary of the date of award, subject to satisfaction of performance conditions and continued employment. The award is also subject to an additional holding period of two years from the date on which the award vests.

The post Director dealings: Vodafone, Deliveroo, FirstGroup appeared first on The Twelfth Magpie.

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John Choong has no position in any of the shares mentioned. The Motley Fool UK has recommended Deliveroo Holdings Plc and Vodafone. 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.

July’s UK consumer price index (CPI) came in hotter than expected at 10.1%. This is a 40-year high and has the potential to drive share prices further down as consumers struggle with a cost of living crisis. So, here are five shares I’m considering buying.

Lloyds

As the UK’s biggest lender, I believe Lloyds (LSE: LLOY) shares are a sound choice for my portfolio. It earns its money from the difference in providing and earning interest from loans. This is otherwise known as net interest income.

Interest rates are expected to go as high as 3% by 2024 as the Bank of England tries to combat inflation. As a result, the high street bank should get a top-line boost from higher lending costs, while benefiting from lower interest paid to customers. With enough cash to set aside for bad loan provisions, Lloyds doesn’t need to increase its savings rate to bring in more cash, thus allowing it to increase its profits. This was evident in the company’s latest half-year results, which saw it recording excellent numbers.

It’s worth noting, however, that the majority of its income stems from mortgages. With house prices and mortgage approvals starting to decline, it remains a possibility that Lloyds’ revenue could be impacted. Nonetheless, analysts think that the increase in rates should offset any declines for the time being. In fact, Lloyds stock is rated a buy as its dividend is also expected to increase. It has an average price target of 64.33p, or a 40% upside.

SSE

Energy prices have been the main culprit behind sky-high inflation. That’s because energy prices are at their highest levels since 2009. As such, I think SSE (LSE: SSE) is a share to buy for my portfolio given the circumstances.

When wholesale energy prices go up, energy suppliers increases their rates to cover the extra costs. This has allowed companies like SSE to benefit, with its top and bottom lines seeing modest increases. As a matter of fact, its profit and loss account saw its best numbers in FY22, which is why its shares are up 9% this year.

The latest inflation report shows that energy prices rose 3% on a month-on-month basis. And with a higher price cap expected in October, SSE should benefit from this. After all, its latest trading update indicates that it expects adjusted earnings per share (EPS) of at least £1.20 for FY23. This would bring its EPS to its highest level in five years.

Additionally, its dividend yield of 4.7% is rather modest and is expected to rise given its most recent increase in payout, from 25.5p to 60.2p. SSE shares are rated a moderate buy with an average price target of £20.78.

Unilever

Next on my list is Unilever (LSE: ULVR). Its share price has been rather volatile this year. Nevertheless, it has recovered by 5% since its reported its H1 numbers. Its shares are now only down by 1% on a year-to-date basis.

The fast-moving consumer goods conglomerate produces beauty products and personal care, foods and cleaning agents. Its brands include Lynx, Ben & Jerry’s, Dove, and many more. These are household names and have tremendous pricing power, given the inelastic demand surrounding most of its products. This is strongly reflected in the revised outlook given by CEO Alan Jope, when he improved the firm’s guidance.

Our guidance for underlying sales growth in 2022 was previously at the top end of a range of 4.5% to 6.5%. We now expect underlying sales growth to be above that range, driven by price with some further pressure on volume.

Unilever CEO Alan Jope

Nevertheless, it should be noted that Unilever shares are more of a defensive play to protect from potential downside at the moment. Analysts are forecasting an average price target of £40.81, which only means a potential 3% gain if I were to buy shares now.

Burberry

Burberry (LSE: BRBY) shares are a good inflation hedge, in my opinion. The brand’s status as a luxury retailer allows it to pass on many of its costs to consumers given the nature of its target market. This was confirmed by CFO Julie Brown in its Q1 trading update, with a positive outlook for the company.

The FTSE 100 retailer has benefited from the return of global travel, with a substantial amount of its sales coming from tourists. It saw its like-for-like sales numbers grow by 1% on an annual basis, despite lockdowns in key revenue driver, China. Excluding China, sales figures were actually rather impressive. They were 16% higher in Q1 overall, with EMEIA boasting impressive 47% growth. Moreover, the company’s most profitable products (leather goods and outerwear) also saw double-digit growth.

That being said, I should point out that China remains the firm’s achilles heel for the moment. With its government sticking to its zero-Covid policy, I don’t expect sales figures from that region to see an uptick any time soon. This is why its average price target currently sits at £19.34. Therefore, this is more of a long-term investment with a higher upside once China’s retail sales fully recovers.

Tesco

Last on my shopping list are Tesco shares (LSE: TSCO). Given that its core products are consumer staples, I’m expecting Tesco shares to be robust in a recessionary environment. It’s also been steadily increasing its dividend payouts, which should serve as an added benefit.

As the market leader in the UK supermarket sector with more than a quarter of the market share, I think Tesco will be able to outperform its peers. Its Aldi price match across hundreds of items has been a success so far. According to the last several Kantar grocery reports, the supermarket leader has seen its market share remain relatively robust. It has also managed to outperform most if its competitors with higher sales figures. And its Q1 trading update showed its strength in the industry.

Having said that, sales figures are expected to come in slightly lower for the year. The grocer no longer enjoys the tailwinds of the pandemic and faces slower sales as a result of high inflation. Even so, I still think Tesco can utilise its strong supply chain and relationship with customers to match last year’s stellar performance. Analysts seem to share the same sentiment, rating Tesco shares a strong buy with an average price rating of £3.19.

The post Inflation hits 10.1%! 5 shares to buy now! appeared first on The Twelfth Magpie.

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• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
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John Choong has positions in Burberry. The Motley Fool UK has recommended Burberry, Lloyds Banking Group, Tesco, and Unilever. 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.

When the pandemic struck, many FTSE stocks operating in the hospitality sector suffered. I decided to stay away from them.

With restrictions seemingly a thing of the past as the world learns to live with Covid-19, I want to revisit some of these stocks. One I’m currently considering is Fuller Smith & Turner (LSE:FSTA). Should I buy the shares?

Pubs and hotels operator

As a quick introduction, Fuller is an operator of pubs and hotels in the UK. It operates via two segments which are Managed Pubs and Hotels, and Tenanted Inns. It manages and runs the former, while the latter is run by third parties under tenancy and lease agreements.

So what’s happening with Fuller shares currently? Well, as I write, they’re trading for 620p. At this time last year, the stock was trading for 823p, which is a 24% decline over a 12-month period. I believe Fuller shares have come under pressure due to macroeconomic factors, like many other FTSE stocks.

To buy or not to buy

So what are the pros and cons of buying Fuller shares for my holdings?

FOR: Fuller released full-year results in June for the year ending 31 March 2022. These results were positive and showed signs of life post-pandemic. Firstly, revenue increased from £73.2m in 2021, to £253.8m. Reopening helped this massively. Fuller also turned a profit in 2022, compared to a loss in 2021. Furthermore, it reinstated its dividend in 2022, which it had cut in 2021 to conserve cash. Finally, it wiped a chunk of debt off its balance sheet. Although trading has not reached pre-pandemic levels, I am buoyed by this resurgence, which could be the start of recovery and growth.

AGAINST: As noted above, macroeconomic headwinds could impact Fuller’s progress. Soaring inflation, the rising cost of materials, and the supply chain crisis could affect performance and investor returns. Rising costs could impact profit levels, which would in turn affect returns. Supply chain issues could also affect operations, which could affect performance levels as well.

FOR: The passive income from dividends is a major positive. At current levels, the dividend yield stands at 1.8%. This is a decent return for an AIM stock and close to the FTSE 250 average of under 2%. I am aware that dividends can be cancelled at any time, however.

AGAINST: At current levels, Fuller shares look expensive to me on a price-to-earnings ratio of 54. This makes me wonder if longer-term growth is already priced in. I will keep an eye on future updates, developments, and share price activity.

A FTSE stock I would buy

I must admit I am buoyed by Fuller’s recent update as well as the passive income opportunity. It could leverage positive performance into long-term growth too. With this in mind, I would be willing to add some shares to my holdings. I will keep an eye on the impact of macroeconomic issues, however.

The post Could this FTSE hospitality stock be primed for growth and returns? appeared first on The Twelfth Magpie.

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Jabran Khan has no position in any of the shares mentioned. The Motley Fool UK has recommended Fuller Smith & Turner. 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.

Director dealings are essentially insider transactions for shares between directors and the companies they work for. These dealings are always made public, and are often considered a good indicator of a company’s future prospects. However, they don’t get nearly as much attention as other company news due to their complex nature. Nonetheless, here I’m breaking down this week’s biggest director dealings from three FTSE firms.

Rolls-Royce

Rolls-Royce (LSE: RR) is a British multinational aerospace and defence holdings company. It is one of the world’s largest makers of aircraft engines, and operates in four different segments. These include civil aerospace, power systems, defence, and new markets.

After a disappointing set of H1 results, Rolls-Royce shares saw yet another decline. But this week, a number of director dealings were carried out. Most notably, there was a huge purchase of shares from Chairwoman Anita Frew. The purchase from such a senior director should improve sentiment surrounding the stock.

• Name: Anita Frew
• Position of director: Chairwoman
• Nature of transaction: Purchase of shares
• Date of transaction: 5 August 2022
• Amount bought: 50,000 @ £0.83
• Total value: £41,300

• Name: Lee Hsien Yang
• Position of director: Non-Executive Director
• Nature of transaction: Share purchase plan
• Date of transaction: 8 August 2022
• Amount bought: 1,161 @ £0.84
• Total value: £980.23

• Name: Wendy Mars
• Position of director: Non-Executive Director
• Nature of transaction: Share purchase plan
• Date of transaction: 8 August 2022
• Amount bought: 2,156 @ £0.84
• Total value: £1,820.31

• Name: Sarah Armstrong
• Position of director: Chief People Officer
• Nature of transaction: Share purchase plan
• Date of transaction: 9 August 2022
• Amount bought: 175 @ £0.86
• Total value: £149.84

• Name: Rob Watson
• Position of director: President (Rolls-Royce Electrical)
• Nature of transaction: Share purchase plan
• Date of transaction: 9 August 2022
• Amount bought: 175 @ £0.86
• Total value: £149.84

Admiral

Admiral (LSE: ADM) is a British-based insurance company. It specialises in car insurance products, but also has a line of other offerings. These include home insurance, travel insurance, pet insurance, and van insurance.

The FTSE 100 firm released its H1 results earlier this week. Although profits slumped by almost half, the stock still shot up by 15% this week. This was most likely due to the announced special dividend of 15.8p. This would bring its total dividend to 60.0p per share. Investor sentiment was also further boosted when the Chairwoman purchased shares worth over £25,000.

• Name: Annette Court
• Position of director: Chairwoman
• Nature of transaction: Share purchase plan
• Date of transaction: 11 August 2022
• Amount bought: 1,181 @ £22.44
• Total value: £26,501.64

Dunelm

Dunelm (LSE: DNLM) is one of Britain’s biggest home furnishings retailers with an ever-growing market share. It operates over a 170 stores throughout the UK and offers over 50,000 products across a broad range of categories.

The FTSE 250 firm released its Q4 trading update not too long ago, and the interim numbers resonated well with investors. Nevertheless, its bottom line figure is yet to be released, and investors are wondering whether their expectations will be met. Therefore, the recent purchases by its CFO and another director could be an indicator of an earnings beat. The company is expected to report its official FY22 results in less than a month’s time.

• Name: Vijay Talwar
• Position of director: Non-Executive Director
• Nature of transaction: Purchase of shares
• Date of transaction: 4 August 2022
• Amount bought: 9,670 @ £8.50
• Total value: £82,156.32

• Name: Karen Witts
• Position of director: Chief Financial Officer
• Nature of transaction: Purchase of shares
• Date of transaction: 5 August 2022
• Amount bought: 1,174 @ £8.45
• Total value: £9,922.18

Types of shares

To provide context, there are a few types of shares that can be purchased by directors. Some directors opt to purchase shares via the open market. Having said that, directors also have the option to purchase shares via a share incentive plan (SIP).

A SIP is an employee plan for companies within the UK to flexibly award shares to employees. Publicly listed companies normally exercise this option because it’s tax-efficient for both the employer and its employees.

In this week’s set of director dealings, a certain number of directors opted to purchase shares via their companies’ share purchase plans. This allows employees to purchase shares through automatic deductions from their pay. And this was the case with a number of Rolls-Royce directors, as well as Admiral’s Chairwoman.

The post Director dealings: Rolls-Royce, Admiral, Dunelm appeared first on The Twelfth Magpie.

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John Choong has positions in Dunelm Group. The Motley Fool UK has recommended Admiral Group. 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.

FTSE 250 incumbent Dr Martens (LSE:DOCS) last month posted surprising, yet impressive, full-year results. Furthermore, it outlined ambitious growth plans too. Should I buy the shares for my holdings?

FTSE fashion stock

As a quick reminder, Dr Martens is a fashion brand that specialises in footwear and accessories. It is perhaps best known for its iconic boots. As with any fashion business, trends have changed, and Dr Martens has moved with the times over the past century since its inception in 1901.

So what’s happening with Dr Martens shares currently? Well, as I write, they’re trading for 261p. At this time last year, the stock was trading for 399p, which is a 34% drop over a 12-month period.

I’m not concerned by the Dr Martens share price drop. The business listed only last year on the FTSE via an initial public offering (IPO). Management later confirmed £80.5m worth of costs attributed to the listing and this caused shares to drop. Furthermore, in recent months, many stocks have pulled back due to macroeconomic headwinds and the tragic events in Ukraine.

Risks to note

The recent macroeconomic headwinds include soaring inflation, the rising cost of raw materials, as well as the global supply chain crisis. These could all have a negative impact on Dr Martens and other FTSE stocks. Rising costs mean that profit margins could be squeezed. This in turn affects performance, returns, and investor sentiment. Supply chain issues could affect operations and sales too.

With inflation soaring, a cost-of-living crisis has emerged here in the UK, as well as issues in many other leading world economies that Dr Martens operates in. In times of austerity, premium brands may suffer if consumers turn to cheaper alternatives to conserve cash.

The bull case and my verdict

Dr Martens’ full-year results for the period ending 31 March 2022 were impressive. Sales totalled £908m, leading to a profit of £181m. This was higher than the forecast of £155m. Tellingly for me, gross margin grew by 63.7% compared to 2.8% previously. I noticed from that update that a shift in focusing on retail sales, rather than distribution, boosted the company’s balance sheet and led to this impressive performance.

As part of the trading update, Dr Martens outlined ambitious growth plans for areas where it feels there is a lot of untapped potential. This includes gaining further entry into lucrative markets such as China, the US, Germany, and Japan.

Based on Dr Martens share price, the shares currently look decent value for money on a price-to-earnings ratio of 13. Furthermore, its impressive results saw its dividend increase, which would boost my passive income stream. Its current dividend yield stands at just over 2%. This is in line with the FTSE 250 average. I am aware that dividends can be cancelled at any time, however.

Overall, I’m tempted to add Dr Martens shares to my holdings. I believe recent results were impressive and could be the start of a sustained period of growth. My only issue is if it doesn’t manage to fulfil its own lofty expectations, the shares could take a major hit. I will keep an eye on developments, however.

The post Should I buy this FTSE fashion stock after its recent impressive results? appeared first on The Twelfth Magpie.

More reading

• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

Jabran Khan has no position in any of the shares mentioned. 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.