If you’re tempted, you should also consider the Wizz Air share price. It’s held up relatively well, supported by a strong balance sheet. As the world eases out of lockdown, long-term investors might want to take advantage of their cut-price valuations.

Wizz climbs after stock market crash

This morning, Wizz Air Holdings (LSE: WIZZ) climbed about 2% as full-year results showed record profits, up a third to €344m (the easyJet share price is a faster riser, up 6%). Unfortunately, these figures only run to 31 March, so don’t reflect the coronavirus mayhem.

The east-Europe focused budget airline pulled guidance due to the pandemic, but said strong liquidity should sustain it throughout the crisis and allow it to “take advantage of market opportunities as they arise.” At the end of March, Wizz held €1.5bn in cash.

The future now depends on whether we can start flying during the key summer period. Wizz is still in expansion mode and will honour new aircraft deliveries, as it aims to increase passenger numbers once the lockdown’s lifted. This is in contrast to many carriers, who plan to cut their fleets.

The Wizz share price is up 22% in the last month, as investors spot an opportunity. This could be an exciting one, as it plans to expand across the Middle East, Africa and the Indian subcontinent, using Abu Dhabi as a hub. It may have more scope for growth than the easyJet share price.

One threat is that the crisis could hit all-important ancillary sales, as food and drink may be banned on flights as a safety measure. These currently make up 45% of revenues. Despite this headwind, Wizz looks tempting as it trades 23% lower than before the crisis.

The easyJet share price flies

Competition will be tough as the airline industry battles to make up lost revenues. Budget carrier easyJet (LSE: EZJ) plans to resume flying from 15 June. It optimistically expects half of its network could be in operation in July and three quarters by the end of August.

However, capacity will be just 30% of the normal summer season, so we’re a long way from normality. Again, ancillary earnings will be hit as there’ll probably be no food or drink served. Costs will rise with a daily disinfection process and the easyJet share price recovery may be bumpy. 

Social distancing may also make flying effortful and put some off, but I reckon customer demand will be strong as people yearn to travel again. The airline will be a leaner operation, with 4,500 jobs gone.

EasyJet is launching its “biggest ever” summer sale, which may win business but reduce revenues. The skies remain cloudy, but the risk is reflected in the easyJet share price. It currently trades at roughly half January’s pre-pandemic levels.

The easyJet share price isn’t the only one bargain following the stock market crash.

The post The easyJet share price is flying! I’d also buy this FTSE stock market crash bargain appeared first on The Twelfth Magpie.

More reading

• Could now be the time to buy great UK shares at bargain prices?
• easyJet shares are up 40% in a month. Here’s why
• Up close to 50% in a month, what’s next for the easyJet share price?
• The easyJet share price is up 49% in a month. What on earth’s going on?
• At £5, could the easyJet share price still be a long-term bargain?

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Wizz Air Holdings. 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.

Air Berlin, Alitalia, FlyBMI and Iceland’s WOW Air have come unstuck. But don’t be deterred, because this FTSE 250-listed British-based carrier, which only launched in 2009, is hitting new heights, and I’d buy it today.

Wizz Air Holdings

Low-cost central and eastern Europe-focused airline Wizz Air Holdings (LSE: WIZZ) has seen its share price soar by a hugely impressive 152% over the past three years.

But its share price is down around 2.5% this morning, even though the group has just posted 18% passenger growth and record profits of €372m, up 85.2% year-on-year, after strong summer trading in the first half.

Total revenue also increased 21.7% to €1.67bn, with ticket revenues up 11.4% to €956.6m. Ancillary revenue from those all-important flight extras rose at an even faster pace, up 38.8% to €714m.

Total costs did jump 21.1% to €1.3bn, so maybe that explains the surprisingly downbeat response to a largely impressive set of figures.

CEO József Váradi hailed higher load factors, expanding net profit margin, and industry leading growth rates, which more than offset higher fuel prices. Meanwhile, its “game-changing, attractively priced and financed A321 neo aircraft” should also widen its cost advantage over competitors.

The £2.7bn FTSE 250-listed group is slightly expensive, trading at 16.4 times earnings, but that seems justified by its healthy rate of expansion. Impressively, Wizz also reported total cash of €1.8bn at the end of September, of which €1,633.3m was free cash, giving it real solidity.

As there’s no dividend, this can go back into expanding the business, and second-half growth is expected to climb to 22%. Some reckon Wizz could even double your money. If so, today’s minor dip could be a buying opportunity.

easyJet

Budget carrier easyJet (LSE: EZJ) is also listed in the FTSE 250, having fallen out of the FTSE 100 earlier this year. Investors have suffered a far bumpier ride here, with the share price trading 15% lower than five years ago. However, the worst now seems to be over, with the stock surging 28% in just three months.

The £5.15bn group has been boosted by the collapse of Thomas Cook, which allowed it to pick up slots at Gatwick and Bristol airports for £36m, and strikes by Ryanair and British Airways staff. Its recent Q4 statement showed passenger numbers up 8.6% with adjusted pre-tax profit at the upper end of guidance, between £420m and £430m. 

However, a drop in the load factor, a key figure, by 1.4% to 91.5% is a blow. Today, Wizz showed how it should be done, posting a far more impressive load factor of 94.6%, up from 93.6%. I just hope easyJet can fill its planes in those new slots.

easyJet’s earnings are forecast fall 26% this year and, given all the headwinds, the share price looks a little pricey, trading at exactly 15 times forecast earnings. The forward yield is 3.5%, with cover of 1.9.

I think the group’s future will be brighter but, given current uncertainties, I’d hold off and pick this up in a market dip. I’d buy Wizz though.

The post No pension at 50? This FTSE 250 growth stock could turbo-charge your savings appeared first on The Twelfth Magpie.

More reading

• Could now be the time to buy great UK shares at bargain prices?
• easyJet shares are up 40% in a month. Here’s why
• Up close to 50% in a month, what’s next for the easyJet share price?
• The easyJet share price is up 49% in a month. What on earth’s going on?
• At £5, could the easyJet share price still be a long-term bargain?

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Wizz Air Holdings. 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.

Wizz buzz

The Wizz share price has soared 152% over the past three years and is up 1.75% today after announcing net record profit of €72.4m in the three months to 30 June. Passenger numbers also rose an impressive 20% to 10.4m. Management also looked forward to “encouraging summer trading,” raising hopes of yet more fun in the sun.

The Wizz share price has been boosted by a 25.4% rise in revenues to €691.2m, while net profit of €72.4m more than reverses last year’s €29.3m loss. Net margins rose 1.2 basis points, from 9.3% to 10.5%.

As well as carrying more travellers, Wizz has also been boosting ancillary revenues per passenger, up 17.7% to €30.10 each. Total costs increased 25.5% to €598.6m, while total cash at 30 June was €1.64bn, of which €1.46bn was free cash.

Fresh and new

Wizz is flying while other carriers stall, helped by its focus on less mature markets in Central and Eastern Europe. It has an average aircraft age of just 4.9 years, “one of the youngest fleets of any major European airline,” and continues to invest, signing of a memorandum of understanding with Airbus for the purchase of 20 Airbus A321XLR aircraft.

Chief executive József Váradi said recent performance was achieved in the face of higher fuel prices, thanks to rigorous cost management and ancillary revenue generation. Higher prices may actually have helped as “weaker carriers withdraw unprofitable capacity.” Váradi also reconfirmed full-year guidance of €320m-€350m net profit.

Loaded

You can still buy this £2.67bn FTSE 250 stock at a reasonable 15 times forward earnings, with a price-to-revenue ratio of just 1.1. There’s no dividend as Wizz is still at the early growth stage, having only floated in February 2015.

Airlines can be a volatile sector, but Wizz is firing on all cylinders, with the all-important passenger load figure now at 93.7%, up from 92.1% last year. It may struggle to repeat recent share price growth, and there is no dividend, but could still prove a good long-term buy.

Not so easy

So what about rival budget carrier easyJet (LSE: EZJ)? Its stock has risen just 6% over three years, but it flew 24% in the last month, helped by a trading statement showing a “robust” third quarter performance, with revenue up 11.4% to £1.76bn.

Passenger revenue increased 10.7% to £1.39bn while ancillary revenue increased an even better 14.3% to £374m. The figures eased investor nerves and easyJet tempts with a juicy dividend yield of 6.5% covered twice.

No deal, no worry

The group has recovered nicely from recent struggles, but a lot will depend on how Brexit goes, as a no-deal departure could plunge it back into unwelcome turbulence.

The same goes for Wizz Air as well, although the danger may be overdone as earlier this year the EU agreed to allow “basic connectivity” for a year, to prevent planes being grounded the day after a no-deal Brexit.

The future is up in the air but I’m not too worried as both easyJet and Wizz Air appear to have their feet firmly on the ground.

The post I’d buy these 2 FTSE 250 dividend growth stocks for a Stocks and Shares ISA today appeared first on The Twelfth Magpie.

More reading

• Could now be the time to buy great UK shares at bargain prices?
• easyJet shares are up 40% in a month. Here’s why
• Up close to 50% in a month, what’s next for the easyJet share price?
• The easyJet share price is up 49% in a month. What on earth’s going on?
• At £5, could the easyJet share price still be a long-term bargain?

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Wizz Air Holdings. 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.

On the runway

The FTSE 250 group has climbed 10% at time of writing after its final results showed a 39% rise in total group revenues to £146.9m. Adjusted underlying EBITDA from its two main operating divisions, Aviation and Energy, jumped 75% to £24.1m. However, this didn’t stop it from swinging to a loss of £58.2m, down from a profit of £100m in the year to 28 February 2018.

Management pinned these losses on a number of factors, including airline marketing costs, appreciation from continuing operations, impairment charges, and discontinued operations. Clearly none of these were enough to worry investors.

Dividend cut

The Stobart Group share price is still down 50% over what has been a difficult year for the group, which included a messy boardroom battle as former chief executive Andrew Tinkler attempted to oust current chairman Iain Ferguson.

Long-term fan Royston Wild says it has also been hit by declining risk appetite, a slew of troubling market updates and delays in commissioning third-party energy plants at its Energy division. When he wrote that in January, the group yielded around 11%. The dividend has since been cut and the forecast yield is now 5.1%, with cover of just 0.8.

Ready for take-off

Stobart Group stock now trades at a pricey looking 32 times earnings, but the future looks brighter. Its prime focus is Southend Airport, less than an hour away from central London by train, with flights to more than 40 destinations boosted by a recent hook-up with Ryanair. It took 1.5m passengers last year, expects 2.5m this year and is aiming for 5m by 2023.

Earnings and profits could fly if it establishes itself as a rival to the main London hubs. City analysts expect earnings to rise 149% next year, and 45% the year after. It looks a tempting bet to me, even if its rail and civil engineering business needs an overhaul.

Look East

It’s been a tough year for the budget airline sector, with British carrier Flybmi, Icelandic-owned Wow and Berlin-based Germania all going bust in 2019. Ryanair’s stock is down a third after reporting its first loss since 2014 in February, while easyJet halved as drone disruption and high fuel costs triggered a half-year £275m loss.

FTSE 250 low-cost operator Wizz Air (LSE: WIZZ) has had a better time of it, its stock has fallen ‘just’ 10% in the last year. Brexit uncertainty, green taxes and fierce competition have hit profits forcing Wizz to lower its half-year net profit guidance to between €270m and €300m. Peter Stephens anticipates share price volatility but with long-term growth prospects.

Last call

However, in April it reported carrying 19% more passengers than the same month last year, to 3.28m, driven by a 17.6% increase in its capacity to 3.57m seats. Wizz also has exposure to faster-growing central and eastern European economies and is deploying its new Airbus 321ceo aircraft at a new base in Krakow, Poland.

The £2.29bn group is valued at 12.1 times forward earnings and prospects look brighter after a difficult year, as analysts pencil in 25% and 23% earnings growth over the next couple of years. We’ll find out more when Wizz publishes its final results on Friday. 

The post I reckon these 2 FTSE 250 growth stocks are ready to take off appeared first on The Twelfth Magpie.

More reading

• Why did Wizz Air shares just jump 10%?

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Wizz Air Holdings. 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.

It’s not just the small regional operators that are suffering. Flybmi, Germania, Cobalt and Primera are just a few of those that have either put out distress calls or gone to the wall in the past few months alone. And it’s more than likely that many more will ground operations before the year comes to an end.

So what does this mean for the likes of Wizz Air Holdings (LSE: WIZZ)? City analysts are expecting the Hungarian airline to nurse a 43% earnings fall in the year to March. But low fares and increased costs are not the only thing battering the flyer’s short-term outlook, as the impact of Brexit, as well as worsening economic conditions across Europe, looms large on the horizon.

A perfect opportunity

Despite these woes, however, the FTSE 250 firm continues to trade on a healthy forward P/E ratio of 16.2 times. Not even news of a near-90% profits dive between October and December (to €1.7m) — caused by operating expenses surging more than a quarter year-on-year to €513m — has dented investor appetite for Wizz Air and its share price continues to rise.

The most immediate consideration for share pickers in the present climate is the tremendous amount of cash that the business has on its books, making it one of the financially-strongest players in a sector beset with collapses. As of December, it had €1.1bn of free cash, up 12% on an annual basis, and putting it in a solid position to ride out the current turbulence.

Rather, its bulked-up balance sheet gives Wizz Air the opportunity to capitalise on the agony that many of its rivals are experiencing, as illustrated by its takeover of Monarch’s take-off and landing slots at London Luton airport in late 2017.

Emerging markets star

So Wizz Air may be exposed to some more near-term profits troubles, but it remains one of the brightest growth stocks on Britain’s second-tier share index, in my opinion.

The company’s main operating territory of Central and Eastern Europe provides gigantic revenue opportunities in the years ahead as broader economic growth takes off there. And through its ongoing route expansion strategy Wizz Air is looking to really capitalise on this trend (it brought online 53 new routes in the last quarter alone to take the group total to 600, and opened its 26th base at Krakow in Poland too).

City brokers largely agree with my optimistic take and they are predicting that the business will bounce back with ripping profits growth of 24% in fiscal 2020, before reporting a chubby 23% bottom-line rise in the following year.

Wizz Air moved a staggering 8.1m passengers in the last quarter, up almost 15% on an annual basis, and I’m tipping demand for its tickets to keep getting stronger and stronger.

The post Forget short-term pain! I think this FTSE 250 stock could deliver enormous long-term gain appeared first on The Twelfth Magpie.

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• Why did Wizz Air shares just jump 10%?

Royston Wild 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.

However, the share price has fallen almost 30% in 2018 and we could be seeing better value and a second chance to hop aboard the Wizz Air growth story. The company operates a fleet of 104 Airbus A320 and Airbus A321 aircraft over 600 routes from 25 bases with the service connecting 142 destinations across 44 countries in Central and Eastern Europe. The business model relies on offering very low ticket prices, but the budget airline is profitable and growing fast.

The growth proposition remains on course

I find the figures in today’s half-year report encouraging. Compared to the equivalent period last year, the number of passengers carried rose 20%, which suggests that the growth proposition is still on course. The increased business led to revenue rising 20%, but the firm faced some challenges regarding costs in the period, which led to net profit rising just 1.2%. The diluted earnings per share figure came in 0.3% higher and was affected by an increased share-count.

I think there are good reasons for the slowdown in profit growth and the easing off of the share price. Chief executive József Váradi explained in the report that the operating environment in the first half of the year was “particularly challenging” for all European airlines with “unprecedented” disruptions caused by striking air traffic controllers and slot constraints at “heavily congested” airports. On top of that, the company was coping with the ramp-up of its new UK airline, Wizz Air UK, and an “extensive” delivery program of 17 aircraft over 17 weeks. He reckons operations “are now back on track” and the key performance indicators for October and November are ahead of last year.

Short-term challenges?

Rising fuel prices were also a challenge in the period. But Váradi thinks the company’s “ultra-low-cost” business model provides a “significant competitive advantage” in an environment of higher fuel prices. He reckons an ongoing focus on costs will help the firm capture even more market share. So far, the plan has been working well with Wizz Air’s passenger numbers rising in most recent reporting periods. And he thinks an improving operational performance and falling costs will help to offset around half the €80m fuel headwind and disruption costs for the year. But the company has lowered its full-year net profit guidance to between €270m and €300m, suggesting a result similar to the previous year rather than the annual earnings advances we’ve become used to.

I think we could be seeing a classic case of short-term challenges affecting the profit growth and share price in an otherwise robust growth story. It expects to take ownership of what Mr Váradi describes as “game-changing, well-priced” A321 NEO aircraft into its fleet during the fourth quarter, “financed at very attractive levels,” which should “enable Wizz Air to increase its cost advantage even further.” I think there’s a lot more to come for investors with this one and believe the stock is well worth your attention now.

The post Is it time to revisit this 2017 market-leading FTSE 250 share? appeared first on The Twelfth Magpie.

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• Why did Wizz Air shares just jump 10%?

Kevin Godbold 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.

It’s the Wizz!

Wizz posted profits of €50m in the three months to 30 June but this was €8.1m lower than a year ago, which reflected higher than expected disruption costs and the busy Easter period falling outside the quarter this year.

Total unit revenue dropped 1.4% to 3.67 euro cents per available seat kilometre (ASK), while total unit costs fell 2.2% to 3.3 euro cents per ASK. Wizz also suffered an “unprecedented number of disruptions” due to you-know-what, which increased the number of cancellations from 34 to 145 and cost it €9.1m in passenger delay and compensation costs, up 203%.

Climbing again

On the plus side, total revenue increased 17.9% to €553.4m, while ticket revenues increased 24.5% to €330.4m. Ancillary revenues grew 9.3% to €223m. CEO József Váradi hailed the group’s “double-digit growth in passenger numbers and revenues” and “ever higher load factors”. However, he warned that air traffic control disruptions are likely to continue into the autumn, and combined with fuel prices rising, the group is trimming its full-year growth target from 20% to 18%.

Investors should not feel too aggrieved, the stock is up more than 40% over the last year, and 112% over three years. Any dip could be an entry point, if you are fast, as it is already climbing again. Wizz trades at a forecast valuation of 16.4 times earnings although this year could be bumpy, with City analysts predicting a 37% drop in earnings, but this should rebound 21% in the year to 31 March 2020.

The £3.47bn budget carrier boasts free cash of €1,116.6m and my Foolish colleague Paul Summers notes that its capital and operating margins are markedly higher than its rivals. Wizz is still a flyer.

Crown Joules

Better news for investors in premium lifestyle fashion chain Joules Group (LSE: JOUL), which is up a slinky 2.31% after posting an 18.4% rise in group revenue to £185.9m and an even sharper 28.5% increase in underlying profit before tax to £13m.

Today’s annual results to 27 May also showed underlying basic earnings per share (EPS) jumped 28.5% to 11.8p, with statutory basic EPS up by 36% to 9.9p. Gross margins increased 25 basis points to 55.7%.

Joules continues to win converts to its branded lifestyle clothing, accessories and homewares, with active customers up 23.4% to 1.15m. It is successfully promoting its ‘authentic’ British wares in the US, Germany, France and other European markets, with international revenue up 35.7% to 13.1% of group revenue. 

Pint of Porter

CEO Colin Porter hailed another strong year of growth due to to the strength and appeal of the Joules brand, and its loyal customer base. He said momentum will continue into full-year 2019, and proposed a final dividend of 1.3p per share. The forecast dividend is 0.9%, covered 4.4 times.

Joules has risen 102% in two years and could still double your money, even if it is valued 26.8 times earnings, as its robust double-digit earnings growth forecasts make this a stylish portfolio accessory. 

The post Have £2,000 to invest? Here are 2 monster growth stocks to consider appeared first on The Twelfth Magpie.

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• Why did Wizz Air shares just jump 10%?

harveyj has no position in any of the shares mentioned. The Motley Fool UK has recommended Joules 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.