This sharp rise in share prices for the company is understandable as we’re now in line for seven straight weeks of non-stop general election coverage with struggling newspapers and broadcasters alike desperate to attract attention. For YouGov, which made its name years ago as a reliably accurate political pollster, this means plenty of free publicity as its latest weekly poll results are pored over by political commentators and included in myriad news reports.

Greater publicity and an uptick in custom polling contracts from media outfits and political parties should bolster what is already impressive growth for the AIM-listed small-cap. In the six months to January 31, the company’s sales rose 24% year-on-year in real terms and 8% when adjusting for the positive effects of the weak pound.

Smarter growth

And more importantly, operating profits rose a whopping 41% as the company benefitted from higher margins in each of its largest markets and refocused growth away from the relatively low-margin custom polling for which it is known.

Instead, the founder-led management team is concentrating on growing the data products & services divisions that provides companies with access to its poll results covering the effectiveness of ad campaigns, the buying habits of every major demographic and consumers’ brand perceptions, among other data points.

As these divisions merely sell companies data that has already been collected, rather than having to commission custom research, margins are considerably higher. In the latest half-year results, operating margins for the data divisions were 24% compared to only 12% from the custom polling division.

This is why investors should be ecstatic that these more profitable data divisions accounted for all of the company’s growth in the past half year, with a 23% rise in constant currency like-for-like sales during the period. It’s also possible that this rapid growth is entirely sustainable as the company’s 32 worldwide offices are well positioned to provide locally relevant data to the roster of multinationals such Google, Facebook, Walmart and Bank of America it already counts as clients.

So what’s the verdict?

Investing in AIM-listed firms such as YouGov is always risky, but the company does have a few key characteristics that should lessen investors’ worries. For one, it is solidly profitable and has been for some time. This has helped maintain a very healthy balance sheet that recorded £15m in net cash at the end of January. And the company is still led by co-founder Stephan Shakespeare, who owns 7.1% of the business so has significant skin in the game.

At 25.7 times forward earnings, the firm’s shares aren’t cheap. But with earnings growing at double-digits and Theresa May’s snap election set to increase sales in the short term and brand awareness in the long term, this may be a great time to take a closer look at YouGov.

The post Theresa May just did this growth stock a huge favour appeared first on The Twelfth Magpie.

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Ian Pierce has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Alphabet (C shares) and Facebook. 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.

This proposal goes against her previous assertions that a general election would not be called until 2020, so what’s changed and how does it affect the investing landscape?

Retesting the resolve of the British people

In a brief speech at the lectern outside 10 Downing Street, Mrs May explained that as the UK moves along the Brexit process “the country is coming together but Westminster is not.”

The prime minister suggests that opposition parties and unelected members of the House of Lords are doing all they can to block and slow down the government’s efforts to move Britain towards leaving the European Union. With a slim majority of around 15, that situation weakens the hand of the government as it embarks on the difficult negotiations ahead with the European Union.

In her speech, Mrs May threw out a challenge to those opposing the Brexit process in Westminster to prove they are serious by voting for this general election. If the election goes ahead, the resolve of the British people to leave the European Union will again be tested, albeit indirectly.

Are shares riskier now?

One way of thinking about this potential early election is that it’s all part of the Brexit process and therefore already known by the market. There could be some short-term volatility in financial markets because of this new development and indeed, the FTSE 100 is down almost 2% today as I write. But my guess is that the stock market will take this event in its stride as the news is digested.

I think that any blip created by an early election will be small and barely noticeable for investors focusing on the longer term. As long as we concentrate on buying shares in firms with good-quality underlying businesses and hold them for the long haul, the ups and downs of the political process should be of minor concern.

I’m not going to panic-sell my carefully chosen shareholdings over this news. And in holding on and ignoring the headlines, I’ll be following in the footsteps of well-known investors such as Warren Buffett and Neil Woodford.

The news that really matters

Rather than reacting to general political news flow, it is often best to keep tabs on the news coming from the businesses that we hold or want to buy. One-time US Fidelity fund manager Peter Lynch once said: “The key to making money in stocks is not to get scared out of them.”

As long as individual company news flow suggests that a firm’s underlying fundamentals remain sound, there’s often no reason to expect a material change in the outlook, even in the face of the ongoing Brexit process.

The post What does Theresa May’s snap general election mean for investing? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Kevin Godbold has no position in any 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.

This strength does have some logic. After all, the FTSE 100 is packed with companies whose massive international exposure minimises the possibly-negative implications of the leave vote. And of course many stocks with huge overseas operations also stand to gain from heavy sterling weakness in the months — and possibly years — ahead.

Pound perils

Indeed, demand for the UK’s big-caps could carry on rising should the pound continue to haemorrhage value as many experts are predicting.

Both HSBC and Goldman Sachs are convinced that sterling will plumb to 1.20 against the US dollar by the end of the year, worsening from the 31-year trough below 1.30 hit in recent days. And Deutsche Bank expects a slip to 1.15 in the months ahead.

Bank action

As well as reflecting fears concerning the domestic economy, the pound has also lost value as the market expects an imminent interest rate cut by the Bank of England.

However, this may not be the only round of action bank governor Mark Carney and the Monetary Policy Committee may have to take, with Nomura expecting another rate reduction in November.

On top of having further negative implications for the pound, the prospect of extra liquidity flooding into the system could bolster the FTSE 100 still further.

Withdrawal symptoms

The appointment of Theresa May as prime minister — thereby truncating a possible three-month wait for the next PM — has also propelled the FTSE 100 recently, soothing the nerves of those fearing a prolonged British withdrawal from the EU.

Although a remain supporter prior to June’s vote, May has vowed since then to deliver Brexit. But this is unlikely to be the end of the matter. Indeed, other EU leaders are likely to try to play hardball concerning access to the single market, a development that could still lead to huge delays in Article 50 being triggered.

Meanwhile, the likelihood of last month’s referendum being upheld remains a bone of contention as calls for a Parliamentary vote on the matter circulate; lawmakers pore over the whether Brexit is constitutionally viable; and the government negotiates while trying to hurdle a severe economic shock and possible break-up of the UK.

In other news…

The tetchy political landscape isn’t the only factor that could send the FTSE 100 sinking again. As I’ve long argued, the index’s huge weighting towards energy and mining leaves it in danger of a correction should supply and demand indicators continue to worsen.

For one, the stream of disappointing economic data from China is unlikely to end soon, piling further pressure on commodities suppliers.

On top of this, Britain’s blue chips aren’t completely immune to the prospect of a domestic recession. Banks like Barclays and Lloyds still deal at a significant discount to their pre-referendum levels, while housebuilders such as Persimmon have also fallen thanks to their dependence on a healthy British economy.

Given this broad range of factors, I believe it’s nigh-on impossible to confidently guess where the FTSE 100 will be moving to in the weeks and months ahead.

The post Is the FTSE 100 heading to 7,000? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Barclays and HSBC Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.