I’ll name and shame the offenders – Burberry Group, JD Sports Fashion and Ocado Group. Over five years, their shares are down 43%, 53% and 91%, respectively.

I haven’t done quite that badly, having taken advantage of their share price volatility to bag them at a reduced valuation. All three have had their moments, but they’ve failed to sustain them. As of today, I’m down 5% on Burberry, 18% on JD Sports, and 56% on Ocado Group.

Should I sell these three and buy Goodwin shares?

Burberry has rallied as investors decided new management had hit on the right strategy, while JD Sports is cheap and surely has to rebound at some point. Grocery tech specialist Ocado seems to be in perma-crisis, and in need of a total strategic overhaul.

While I wait for the turnaround, other UK stocks aren’t hanging around. I’m tempted to dump all three and pump the proceeds into my favourite FTSE 250 flyer instead.

Engineering firm Goodwin (LSE: GDWN) was on my watchlist for years, but looked too expensive. The family-owned company, based in Stoke-on-Trent since 1883, has really shown its mettle lately. 

Goodwin is a global business with 18 manufacturing sites across Europe, Asia, Africa and the Americas. Around 70% of its sales now come from overseas. It’s benefited from the defence boom, boast in crucial partnerships like a critical submarine manufacturing agreement with Northrup Grumman, which provide stable, visible revenues.

Its order is £288m and it’s an efficiently-run business, with an impressive 35% return on equity. The Goodwin share price rocketed last summer as profits accelerated. This little list shows the recent full-year trend:

• 2025 – £54.45m
• 2024 – £34.26m
• 2023 – £24.21m
• 2022 – £22.13m
• 2021 – £19.94m

Is this FTSE 250 stock good value?

Success comes at a price, and last summer the price-to-earnings (P/E) ratio hit a dizzying 65. I decided Goodwin shares were just too pricey. It really had to keep delivering at those levels. Then it hit a bump. The shares plunged on 23 March, when the board tightened its dividend policy after losing two significant mechanical engineering tenders. Combined, they were worth almost £60m. The Iran war was to blame for one.

I waited for the dust to settle, and bought Goodwin twice in May. Just over one month later I’m up 20%. Of course, it’s early days, and there could be more volatility ahead. But Goodwin is already working my money harder than Burberry, JD and Ocado combined. Time to jump ship?

Goodwin is expensive again, with the P/E climbing back up to 50. That prices in substantial future growth and leaves little margin for operational error. It can’t afford to lose any more contracts. I think the shares are still worth considering, but at this price, it’s risky.

I won’t be selling JD Sports and possibly not Burberry either. They’re at the wrong end of the consumer cycle, which will hopefully turn. But I’m taking a very hard look at Ocado. Even at today’s dizzying valuation, Goodwin looks a safer bet than that turkey.

Should you invest £5,000 in Goodwin 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 Goodwin Plc made the list?

Harvey Jones owns shares in Burberry Group, Goodwin, JD Sports and Ocado Group,.

The post Should I sell my 3 worst UK stocks and buy more of this high-powered growth share? appeared first on The Twelfth Magpie.

Here’s one I’ve just bought.

A niche giant hiding in plain sight

Goodwin‘s (LSE:GDWN) one of the most remarkable businesses most investors have never heard of. The UK-based engineering group makes high-integrity castings, pumps, valves, and radar systems for some of the most demanding environments on the planet. Think nuclear power stations, defence installations, LNG facilities, and offshore oil and gas projects.

It isn’t a glamorous enterprise. But the financials certainly are. In the six months to October 2025, Goodwin delivered a 27.4% revenue increase to £135.6m and more than doubled its trading profit from £17.1m to £37.2m.

Meanwhile, gross margins expanded from 43% to 49.3%, reflecting the enormous pricing power embedded into its highly specialised, hard-to-replicate products. For reference, the average profit margin for most of its peers typically lies between 25% and 35%. In other words, Goodwin’s one of the most profitable businesses in its sector.

And yet, there’s more growth waiting in the wings. The firm’s official order book stood at £288m as of February. But in reality, the group’s true pipeline is considerably larger.

Due to the defence and nuclear decommissions procurement process, contracts are awarded in stages. But since suppliers have to undergo lengthy and rigorous qualification, once Goodwin gets involved in such a programme, it almost gains a near-de facto win on future stages.

Is this too good to be true?

The key word there is ‘almost’. The firm actually recently lost a tender for the Sellafield nuclear decommissioning project worth over £45m. Considering it’s one of the few companies in the UK capable of delivering the engineering expertise, the announcement came as quite a shock. And the impact was only compounded by the further loss of another €18m coastal radar project in Estonia.

It goes to show that while Goodwin has a strong incumbent position, it isn’t 100% immune to competitive disruption.

The geopolitical backdrop adds another layer of uncertainty. While war drives up defence spending, it also has a habit of interrupting trade. And with the ongoing conflict in the Middle East, some of its LNG valve customers have delayed their orders, creating a temporary but meaningful disruption in the region.

So now the question is, are these risks worth taking?

Why I decided to buy

The headwinds that Goodwin encountered in 2026 have undoubtedly been frustrating for shareholders. But with the share price being sold off hard, it became clear in my mind that the market drastically overreacted.

Even with the Sellafield tender losses, management confirmed that trading performance remains in line with expectations. And when looking out to the longer term, the group still has a strong pipeline of nuclear, LNG, and defence work building behind the scenes.

So with the growth story still intact and the share price tanking in March, I confidently added this business to my own portfolio. And for other investors looking for top-notch stocks to buy, Goodwin may be worth considering.

Should you invest £5,000 in Goodwin 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 Goodwin Plc made the list?

Zaven Boyrazian owns shares in Goodwin.

The post 1 FTSE 250 stock from my ‘best stocks to buy now’ list appeared first on The Twelfth Magpie.

The UK-based family firm was founded way back in 1883. Today, it engineers precision components for the defence, energy and industrial sectors, with a focus on higher-margin defence and nuclear contracts.

This is a global business, with 18 manufacturing sites across Europe, Asia, Africa and the Americas. Almost three quarters of sales are made overseas. I was all ready to buy it last summer, but the shares suddenly became even pricier after 2025 pre-tax profits jumped 47% to £35.5m, on record-breaking revenues of £220m.

Why’s Goodwin in demand?

The stock continued to climb as Goodwin went onto secure new lucrative orders in the defence boom, driving the price-to-earnings (P/E) to a dizzying 65. As a rule, I prefer to buy shares when they’ve fallen out of favour, and have a low P/E and higher yield as a result. I’m scared of jumping on whizzy growth stocks just as they run out of steam.

Like any strategy, it’s not perfect. I’ve missed out on a few red-hot momentum stocks as a result. But it worked here. On 23 March, Goodwin revealed it had lost two contract tenders, and was reducing its dividend in response to Iran war uncertainty. The stock crashed by half, from 24,200p to 11,950p.

I waited for the dust to settle and bought the stock on 22 May and 28 May, at an average price of 14,420p. Today, the Goodwin share price stands at 14,980p. I hope to hold it for decades, which will hopefully give it plenty of time to recover. So should investors consider it today?

So what are the pros and cons?

I can see three big attractions here:

• Goodwin has a history of robust financial performance performance and profitability. It has regularly posted double-digit annual revenue growth.
• It’s a diversified operation: the business operates across the defence, civil aviation, oil, gas and nuclear project sectors.
• Its management structure: executives are heavily invested in the company, giving them a real incentive to drive investor rewards.

But there are also three risks:

• Potential volatility: Goodwin shares spiked last year, and have now plunged. There could be more ups and downs to come.
• Contract timing threats: revenue flow will always be variable due to contract wins, completions and, as we’ve just seen, postponements.
• Precious metals exposure: its refractory engineering segment is exposed to shifts in the jewellery market, including gold and silver prices.

I prefer to buy cyclical stocks when they’re down, as Goodwin is. But it isn’t exactly a bargain today. That P/E is still a hefty 44. So I wouldn’t say it’s a screaming buy, except for investors like me who’ve been patiently waiting for a buying opportunity.

I think it’s worth considering for investors who are comfortable with the risks and willing to take a long-term view.

Should you invest £5,000 in Goodwin 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 Goodwin Plc made the list?

Harvey Jones owns shares in Goodwin.

The post Is this FTSE 250 stock now a screaming buy after crashing 45%? appeared first on The Twelfth Magpie.

Goodwin’s (LSE:GDWN) potentially a solid example. The shares collapsed 47% in a single day in March – a dramatic sell-off triggered by a surprise trading update. But when digging a little deeper, this may have secretly created an exciting buying opportunity. Let’s take a closer look…

What does Goodwin actually do?

Goodwin’s a specialist industrial engineering group operating across two core divisions.

Its Mechanical Engineering arm manufactures highly complex valves, pumps, and castings for some of the most demanding environments on the planet. Think naval defence vessels, nuclear decommissioning facilities, and liquefied natural gas infrastructure.

On the other hand, its Refractory Engineering segment produces precision materials used in jewellery casting and high-performance industrial applications.

In short, Goodwin’s a niche, technically-demanding business very few competitors can replicate. And that’s precisely what makes the recent sell-off so interesting.

So why did the shares crash?

The March trading update revealed that Goodwin had unexpectedly lost two significant tenders worth around £60.6m combined. This included a £45m contract with the Sellafield nuclear site and an €18m coastal radar contract for Estonia.

For a business of Goodwin’s size, that’s a meaningful setback. Add in some delayed valve dispatches on Middle East LNG contracts due to geopolitical uncertainty, and the market’s reaction becomes understandable.

But here’s what the panic sellers may have missed.

Despite these challenges, management nonetheless reiterated its full-year guidance with the group’s fixed order book standing at £288m. That’s because the company continues to sit on a significant pipeline of active defence and nuclear decommissioning projects that haven’t been formally contracted yet.

This ‘shadow’ order book is a powerful hidden tailwind. Defence spending and nuclear decommissioning are surging across Europe, representing a multi-decade structural opportunity that isn’t going away.

Does that make Goodwin a guaranteed winner? Of course not. We’ve already seen how surprise tender losses and geopolitical disruption can have an impact on Goodwin’s share price.

And with its Refractory Engineering segment tied strongly to the global jewellery market, higher precious metal costs as well as a general softness in luxury goods are proving to be a drag on performance.

So what’s the verdict?

The bottom line

For long-term investors, a massive share price collapse in a fundamentally sound business with a robust order book and a hidden project pipeline is exactly the kind of dislocation that can create rare buying opportunities.

Looking at Goodwin, I can’t help but feel the market’s overreacted here. That’s why I’m already considering adding this business to my portfolio. And it’s not the only interesting growth stock on my radar right now.

The post Down 47%, is this growth stock finally worth buying in May? appeared first on The Twelfth Magpie.

The Stoke-on-Trent-based family firm boasts a tremendous track record stretching back to 1883. It engineers precision components for the defence, energy and industrial sectors, and has built a global business with 18 manufacturing sites across Europe, Asia, Africa and the Americas. Around 70% of sales come from overseas. I also like the way it’s repositioned towards higher-margin defence and nuclear contracts.

Last year, company data showed Goodwin generated a total return of 4,600% over 20 years, with dividends reinvested. That would have turned a £10,000 investment in 2005 into a stunning £470,000. Although with a market cap of around £1.5bn, I accepted it was unlikely to maintain that pace of growth.

What just went wrong?

Nonetheless, I planned to buy Goodwin ahead of results on 30 July last year, but a week on a Spanish beach wiped the thought from my mind. I came back to find the shares had rocketed after Goodwin posted a 47% jump in profit to £35.5m.

That left the stock trading on a dizzying price-to-earnings (P/E) ratio of around 63, with a yield of just 1.2%. I spent months kicking myself, then drove the disaster out of my mind. Yesterday I checked the share price again. To my astonishment, it had crashed 50% in three months.

The trigger came on 23 March, when the board tightened its dividend policy after losing two major contracts.

One involved a delayed liquid natural gas valve order worth £45m from Middle East customers, who asked for a shipment pause due to disruption linked to the Iran conflict. The other was an £18m hit tied to weaker demand in jewellery casting markets, where soaring metal prices have squeezed activity.

The shares had already weakened despite Goodwin reporting first-half profits jumped 118% to £37.2m (16 December 2025). Markets expected even more at that lofty valuation. We don’t often get a second chances in life. Should I grab this one?

Is this a whole new buying opportunity?

I still wouldn’t call Goodwin cheap. The valuation has cooled, but a P/E of 40.5 hardly screams bargain. The yield has crept up to 2.2%.

Those two contract blows are hopefully short-term issues, triggered by macro issues Goodwin can’t control. The company still has exciting long-term growth opportunities across the European nuclear, aerospace and defence sectors. As ever, there are risks too. Goodwin operates in technically demanding markets and will always be at the mercy of contract wins, delays and cancellations.

Also, defence stocks have retreated across the board lately. Any resolution in Ukraine or Iran would be massively welcome in every way. But it could weaken sentiment and future orders. I’m also wary of buying straight after a huge plunge, because aftershocks often follow.

Still, Goodwin is right at the top of my buy list today. Under strict Twelfth Magpie trading rules, we’re not allowed to buy stocks for at least two full trading days after writing about them. Thereafter, I’ll be watching this one like a hawk, ready to pounce. Even when I’m back on the beach.

Harvey Jones owns no shares mentioned. The Twelfth Magpie has recommended Goodwin. 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 and Hidden Winners. Here at The Twelfth Magpie we believe that considering a diverse range of insights makes us better investors.

The post My favourite FTSE 250 stock just crashed 50% in 3 months – time to fill my boots? appeared first on The Twelfth Magpie.

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.

Crunching the numbers

There are lots of different ways to earn a passive income in the stock market. The most popular is arguably investing in dividend shares. But for investors like me who prefer owning more growth-oriented businesses, it’s still possible to generate an income by trimming a few shares each month.

If the goal is to earn £1,000 a month, or £12,000 a year, then following the 4% withdrawal rule means I’ll need a Stocks and Shares ISA worth around £300,000.

Obviously, that’s not pocket change. And for many, it might seem out of reach. But it’s actually a far more achievable goal than what most might think.

How can I make £300,000?

Let’s say I’m starting from scratch today, and my ISA portfolio matches the UK stock market’s average performance of generating an 8% annualised return. Then, by simply investment my £20,000 annual allowance for 10 years would result in an ISA worth £304,971.04.

Of course, not everyone has the luxury of being able to invest roughly £1,667 each month. But the good news is, even with £500 to spare on a monthly basis, the destination is still achievable in just over 20 years.

But being patient for two decades is obviously less than ideal. So beyond investing more money, is there another way to accelerate the wealth-building process?

How to target bigger gains

Instead of matching the stock market’s average return, investors can seek to beat it with a custom-crafted portfolio of hand-picked stocks. And by owning the right businesses, the returns can be game-changing.

Take Goodwin (LSE:GDWN) as a perfect example. Over the last 10 years, anyone who’s been reinvesting dividends has earned a staggering 24.06% annualised return – three times the stock market average!

At this rate, drip feeding £500 each month would now be worth £245,104.05 – 82% of the way towards the target of £300k in half the time. And those investing £20,000 a year over the last decade are now sitting on a staggering £817,176.92!

Is Goodwin still a buy?

The company’s a family-controlled precision engineering group that’s embedded in a series of multi-decade contracts, with some running into as late as the 2060s, providing management with exceptional revenue visibility.

With Goodwin recently repositioning its business to focus on higher-margin defence and nuclear contracts, trading profits across the first six months of its 2026 fiscal year (ending in April) have more than doubled from £17.1m to £37.2m. And the long duration of Goodwin’s contracts organically creates structural tailwinds, granting impressive operating leverage.

Of course, this strategic pivot also has its downsides. Both the nuclear and defence industries are complex, technically demanding, and heavily regulated. Contract delays, changes in design requirements, or political priority shifts could all adversely impact the future order book and profit timelines.

So is the risk worth it? That ultimately depends on an investor’s individual risk tolerance. But in my opinion, Goodwin has the hallmark traits of an exceptional quality compounder that deserves a closer look.

The post How much do I need in a Stocks and Shares ISA to earn £1,000 a month? appeared first on The Twelfth Magpie.

Pan African Resources (LSE:PAF) leads the pack, with a market-crushing return of 797%. Next comes a huge 348% gain from TBC Bank Group (LSE:TBCG), while Goodwin (LSE:GDWN) narrowly gets bronze with 313%. Note, none of these returns include dividends!

So, here we have an African-focused gold miner, an emerging markets bank (Georgia’s TBC), and family-run engineer Goodwin. An honourable mention should go to construction group Galliford Try, which has also returned around 312% over five years.

What has driven these extraordinary gains?

Benefiting from big investing trends

Pan African’s eye-popping gain can be summed up with one word: gold.

As a gold miner, its profits are highly leveraged to the price of the yellow metal. And even after the recent pullback, gold is still up by roughly 175% in five years.

When gold prices soar, a miner’s profits will often grow much faster than the price of the metal itself because extraction costs stay relatively fixed. As such, Pan African’s net profit has exploded from $44m in 2020 to an expected $470m this fiscal year (ending June). Wow!

Meanwhile, Goodwin’s benefitting from the defence and nuclear renaissance. It makes high-integrity castings, particularly those that don’t melt under extremely high temperatures. Not many companies in the world specialise in these.  

Bottom-line profits have grown at an annualised rate of 25% since 2020. And Goodwin investors have enjoyed lots of dividends along the way. 

Is either still worth considering?

The last time I wrote about Goodwin (in October), I concluded that the stock looked too pricey. Back then, the price-to-earnings (P/E) ratio was 60 while the dividend yield was just 1.4%.

Since then though, the Goodwin share price has crashed almost 40%. And now we have a P/E ratio of 24 and a 2.2% yield that may be worth considering.

Much of this loss came in a single day in March when Goodwin revealed it had lost two major tenders in its Mechanical Engineering division (worth about £60m). And it has delayed the dispatch of valves to some customers due to the Iran war.

Taking a longer-term view, however, it should have plenty of growth options across the European nuclear, aerospace and defence sectors. After all, it has finally dawned on Europe that these things are actually rather important in a fragmenting international order.

Pan African’s fate will, of course, be dictated by the gold price. Personally, I prefer Fresnillo from the FTSE 100 as it mines silver too. But both stocks could tank if gold does.

Ultra-cheap stock

Turning to TBC, I’m more bullish on this bank stock. It’s trading at just 5.7 times forward earnings, while offering a 6.2% forecast dividend yield.

Granted, any economic downturn in Georgia is a risk, while the political scene there is still on edge. But this economy is tipped to grow strongly for years, as is Uzbekistan’s (TBC’s second market).

The lender is extremely profitable, benefitting from its duopolistic position in Georgia and an increasingly digital-first approach. Given the extremely low valuation, strong growth potential, and generous starting dividend yield, I think TBC stock is still worth looking at today.

The post Meet the skyrocketing FTSE 250 stocks up by more than 300% in five years! appeared first on The Twelfth Magpie.

But how much money have investors actually made?

Five-year returns of UK shares

Let’s say someone put £5,000 to work five years ago in April 2021. The amount of money they have today ultimately depends on where they decide to invest this capital.

Looking at the results, it seems that quality large-cap stocks have stolen the show, with mid- and small-cap shares lagging.

There are several explanations behind these patterns. Smaller businesses are typically more dependent on domestic economic conditions, with larger players often generating the bulk of their revenue from overseas. And it’s no secret that the UK economy isn’t exactly in terrific shape at the moment.

However, that doesn’t mean that UK small-cap shares have been bad investments. For smart stock pickers, this area of the stock market has generated some very lucrative gains that have even outpaced the FTSE 100. And one such example is Goodwin (LSE:GDWN).

Even after a recently dramatic sell-off, the once-small-cap stock has still surged by almost 300%. And for anyone who’s been reinvesting dividends paid along the way, that total return has been closer to 360%, transforming £5,000 into a staggering £23,000!

So the question now, following the sell-off, is whether a rare buying opportunity has emerged for this high-quality compounder?

What’s going on with Goodwin?

Following a recent trading update, Goodwin shares collapsed by close to 48% in a single day.

The cause? The update revealed that two significant contract tenders worth roughly £60m were unexpectedly lost. And when compounding this with the impact of order delays coming from the Middle East, management signalled its intention to revert to a more cautious dividend policy. Obviously, that isn’t good news.

But it’s worth pointing out that even with the update, the group’s underlying order book is still pretty substantial. At the same time, the defence and nuclear power tailwinds Goodwin’s been riding are still very much intact.

The sudden contract losses undoubtedly raise some questions about Goodwin’s competitive positioning. But two contract losses aren’t enough to determine a structural rather than a one-off problem.

As such, seeing the market-cap effectively chopped in half definitely seems like an extreme overreaction. However, it’s worth highlighting that Goodwin shares were trading at a massive premium of over 40 times earnings.

Today, with the price-to-earnings ratio now sitting closer to around 22, investors may be looking at an attractive entry point for what is still one of the best-performing UK shares of all time. That’s why I think now’s the perfect time to investigate and mull this potential buying opportunity.

The post £5,000 invested in UK shares 5 years ago is now worth… appeared first on The Twelfth Magpie.

Despite these stellar returns, most investors have never heard of this under-the-radar business. What’s more, there’s currently no coverage from institutional analysts either.

So what exactly does this business do? Why has the stock suddenly exploded, and is it too late for investors to consider buying?

A hidden gem

Let’s start with a quick introduction. Goodwin’s a specialist engineering business that manufactures high-integrity steel castings as well as metallurgical powders used in high-temperature industrial processes. Its niche focus makes it easy to overlook.

But in October 2025, management widened its horizons. After years of positioning itself as a preferred incumbent supplier for naval defence programmes, management gradually secured a series of lucrative defence contracts. This includes deals to supply components for the US and Royal Navy for nuclear submarines, destroyers, frigates, and aircraft carries.

The combined impact of these deals is game-changing. And the company announced pre-tax profits for fiscal 2026 (ending in April) are now expected to reach at least £71m, representing a minimum 100% jump in year on year earnings.

This isn’t just a one-time gain either. The company’s now embedded in multi-decade contracts with some spanning into the 2040s and even 2060s, giving Goodwin an unprecedented level of long-term revenue visibility that other industrial companies can only dream of.

The subsequent pricing power that comes with its preferred supplier status has boosted the firm’s return on equity to an industry-leading 35%. And when combining rapid growth with exceptional shareholder value creation, it’s no wonder this FTSE 250 stock has skyrocketed.

What could go wrong?

As a business, Goodwin looks borderline flawless. Even the balance sheet is in tip-top shape. But like all investments, buying shares today still comes with risk.

After such a stellar surge in its share price, the engineering specialist trades at a pretty lofty premium of 45 times earnings. That’s not entirely unjustified, given the secure nature of its future cash flows. Nevertheless, it opens the door to significant volatility. And this is at risk of being massively amplified due to its ownership structure.

A big reason why institutional investors have ignored this business is that there are very few shares available to buy. The Goodwin family owns close to 54% of the business either directly or indirectly through a private holding company. And with only 2.7 million shares out of 7.5 million available for trading, liquidity is extremely thin.

Put simply, even a modest amount of selling pressure could trigger violent price movements. And if the controlling Goodwin family start making questionable strategic decisions, a lot of the recent share price gains could quickly disappear.

The bottom line

Goodwin’s ownership structure makes it exceptionally difficult for institutional investors to build meaningful positions. Luckily for retail investors, that’s a problem they don’t have. And while the lack of coverage certainly makes due diligence harder, it also means fewer investors are paying attention to a genuinely exceptional FTSE 250 business.

That’s why, despite the risks, I’m taking a much closer look at this enterprise.

The post Up 241%! Why is no one talking about this gem of a FTSE 250 stock? appeared first on The Twelfth Magpie.

Many investors, me included, now have outsized exposure to BAE Systems, with its shares soaring 50% in the last year, and 325% over five. It’s a mighty £50bn business but looks expensive with a price-to-earnings (P/E) ratio pushing 30. Is there better value elsewhere?

Goodwin is a good ‘un

Family run engineering group Goodwin (LSE: GDWN) has a history stretching back to 1883 and has built a global business around precision engineering for the energy and industrial sectors. Today, the FTSE 250-listed group’s defence arm is leading the charge.

I was all ready to buy Goodwin a year ago, then got distracted. Now I feel it’s too late with the shares up a painful 290% over 12 months (painful for me, that is). Over five years they’re up almost 900%, lifting its market cap to £2bn. Investors who think BAE Systems is too expensive will tremble at Goodwin’s P/E though, which is nudging 82.

Expectations are just too high. In December, first-half trading profit almost doubled to £37.2m, but the shares still retreated. Some might consider Goodwin with a long-term view, but it’s too expensive for me.

Chemring is on fire too

Defence-tech specialist Chemring Group (LSE: CHG) is a sluggard by comparison, it shares are up 45% over one year and ‘only’ 85% over five.

They’ve stalled over the last six months though, despite it reporting a 31% increase in pre-tax earnings to £67.7m in December. Chemring’s order book climbed by a fifth to a record £1.34bn. That provides 76% coverage for 2026 earnings.

Lately, the shares have trailed, as mentioned. Its Sensors & Information business has been hit by delays in UK government spending and contract timings, while costs have been higher than expected on certain projects, notably its Norwegian plant. 

Chemring is winning high-margin business in intelligence work, via its Roke division, and that could drive growth in future. With a P/E of 26.5 and market cap of just £1.4bn, I think it’s worth considering for investors looking to diversify away from big gun BAE Systems.

Qinetiq almost looks a bargain

Finally, there’s Qinetiq Group (LSE: QQ), which may tempt bargain seekers like me. It shares are up a modest 28% over the year, and 75% over five. The P/E is easily the lowest here at 19.1. The market cap is £2.7bn.

Last month, Qinetiq forecast organic annual revenue growth of 3%, which is modest for this sector, citing near-term uncertainty over client spending. It nonetheless boasts an order backlog of around £5bn, and a qualified pipeline of £11bn, which says gives it “long-term visibility”. Cash flow is strong too.

Qinetiq has posted some big wins, including mission critical engineering services for Typhoon jets, while its DragonFire laser programme will deliver next‑generation counter‑drone capabilities for the Royal Navy. With laser shots costing as little as £10, this could be a huge growth area given the changing nature of warfare.

Qinetiq strikes me most as worth a further look. But I’d say BAE Systems and Chemring are also worth considering today with a long-term view as the world sadly gets more warlike.

The post 3 red-hot FTSE 250 defence stocks to consider over BAE Systems appeared first on The Twelfth Magpie.