Keir Starmer has resigned and Andy Burnham is the current favourite to take over. But what could that mean for the FTSE 250 stocks in my portfolio?

Vistry: same model, different tenants

Vistry (LSE:VTY) has been a horrendous stock recently. The debt on the firm’s balance sheet means it’s been struggling more than other UK housebuilders.

The big positive is the £39bn Social and Affordable Homes Programme (SAHP), which runs until 2036. The firm’s existing partnerships put it in a strong position.

Source: Company Website

There’s speculation that a Burnham government might tilt the SAHP away from the private sector and towards traditional social housing. Does that matter for Vistry?

I think it’s neutral at worst. The group has Strategic Partner-Plus status with Homes England through its Hestia joint venture.

No other listed UK builder has that central role. And with a forward order book of around £4bn, Vistry is well placed to play a major role in a revised SAHP.

A shift in the tenancies doesn’t change who holds the shovel. Whether it’s the private sector or housing associations, I think the FTSE 250 company is still in a strong position.

JD Wetherspoon: careful what you wish for

A Burnham government pledging to ease employer costs might look like good news for JD Wetherspoon (LSE:JDW) shareholders. And I think the stock market might see it as such. 

The company says October’s National Insurance rise is set to cost around £60m a year. But I’m not convinced relief would be unambiguously good.

It’s definitely tough in the hospitality industry. But JD Wetherspoon has consistently outperformed the field (at least, according to the CGA RSM Hospitality Business Tracker).

That’s mostly because its pints are typically around 33% cheaper than elsewhere. And the scale benefits that support this are a durable competitive strength.

Lower employer NI would reduce pressure on rivals that have been raising prices or closing entirely. And I think that would probably level the playing field.

In the short term, it might mean better margins. But I’m not convinced that more competition where JD Wetherspoon has been winning is what its shareholders should be hoping for.

The shared risk worth naming

Both Vistry and JD Wetherspoon face a scenario investors should keep in mind. It’s the downside of more employment and higher wages.

These are good for housing demand and pub traffic. But they also push up input costs.

Vistry has already flagged inflationary pressures. And JD Wetherspoon runs tighter margins than most of its rivals.

A more stimulative government that reignites wage inflation would be tough for both. So there’s a lot to think about.

My view

Whether it’s Burnham or anyone else, I want to own shares in businesses with enduring strengths. And nothing on that front has changed my mind this week.

Changes in government policy could have an impact on Vistry and JD Wetherspoon. But the smart investor backs long-term quality over short-term noise.

I think both Vistry and JD Wetherspoon have enduring competitive strengths. And that’s why I’m likely to keep buying both, regardless of who’s running the country.

The post What could an Andy Burnham government mean for these FTSE 250 stocks? appeared first on The Twelfth Magpie.

What is it?

For any stock I’m thinking about buying, I look to complete the following sentence:

“Company X can sell things for more than they make them for because…”

Here are some candidate answers:

• Nobody else is allowed to make those things.
• It can make them for less than everyone else.
• Changing to another supplier is difficult for customers.

There are others. But I need a potential investment to have at least one way of finishing that sentence. Call it a moat, call it an unfair advantage, call it whatever you like, but it’s the number one thing I look for in a stock to buy.

Why does this matter?

Making money is about selling stuff for more than it costs you to produce it. But there has to be a reason why a company can do this.

If there isn’t, sooner or later, someone else will start selling it for less. And that creates a problem. As a result, a company needs to be able to stop this happening. Furthermore, whatever it uses needs to be durable.

A stock trading at a price-to-earnings (P/E) ratio of 14 doesn’t make enough to give buyers their money back next year. It’s going to take time. That means it needs to make money year after year. And that’s why it needs a durable advantage over its rivals.

Cost advantage

One company that I think does have this is JD Wetherspoon (LSE:JDW). Its big advantage is that it has lower costs than competitors.

That means it can make money while selling things at lower prices. And this comes from its ability to buy at scale.

Matching this is virtually impossible for other operators. Wetherspoon’s edge comes from buying at scale across 794 pubs. That’s over twice as many as rivals Fuller, Smith, & Turner (380) and almost three times as many as Young & Co’s (280). So the advantage is likely to be a durable one.

Margins

The hospitality industry as a whole has been under pressure. Energy prices are up, staff costs are rising, and taxes are higher.

Wetherspoon has looked to hold down prices and use sales growth to offset lower margins. But this hasn’t been entirely successful. Profits in 2025 were lower, despite higher sales. By contrast, other operators have managed to maintain margins with price increases.

In the short term, ”Spoons’ has faltered. But from a long-term perspective, this might be playing into the firm’s hands. The company’s big attraction is the value it offers consumers. And as competitors push prices higher, that only gets wider.

To buy or not to buy?

There’s no question JD Wetherspoon operates in an extremely tough industry. And that’s enough to put a lot of investors off.

I completely understand that view. But every time a competitor increases prices, the firm’s competitive position gets stronger.

The stock is already a big part of my portfolio. Despite this, it’s still on the list of investments I’m considering adding to at the moment.

Should you invest £5,000 in J D Wetherspoon 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 J D Wetherspoon Plc made the list?

Stephen Wright owns shares in JD Wetherspoon.

The post Here’s the number-1 thing I look for in shares to buy appeared first on The Twelfth Magpie.

Straight away, I can think of Guinness maker Diageo, supermarkets like Tesco and Sainsbury’s (beer, BBQs, and bags of crisps), and ITV. Meanwhile, Ladbrokes owner Entain will surely see a big spike in gambling activity.

However, I think the following cheap trio are worth checking out right now.

How much for a new England shirt?

Sports Direct owner Frasers (LSE:FRAS) will surely be selling a fair few England and Scotland shirts over the next couple of weeks. I’ve been looking at matching England kits for me and my young daughter — and they ain’t cheap!

However, Sports Direct has rolled out lots of vintage shirts from previous tournaments. Beyond leaning into fans’ nostalgia, these are also a lot more affordable, making this a smart strategy, in my opinion.

That said, while I expect Frasers will enjoy a nice little sales boost this summer, subdued consumer confidence and sticky inflation are obvious challenges here. And rising youth unemployment isn’t helping the overall picture.

Yet, the stock looks very cheap to me, despite rising 21% since I last covered it in March. For the current fiscal year, we’re looking at a forward-looking price-to-earnings (P/E) ratio of just seven.

Note, Frasers has spent the last couple of years building chunky stakes in brands and retailers, including ASOS, Boohoo, Puma, and Hugo Boss. So there could be long-term value to be unlocked through some of these investments.

Get the jars in

The second stock is J D Wetherspoon (LSE:JDW). I’m sure ‘Spoons needs no introduction — its pubs are everywhere.

Now, I normally wouldn’t have included the stock here, as the company is famous for keeping costs under control. This means not splashing out on pricey live TV sports packages — it would rather keep the price of pints down.

However, most Wetherspoon’s pubs will be showing the World Cup this summer. And because its drinks are cheaper than rivals, I expect they will be packed, with both young and old punters.

But even if fans migrate elsewhere for the actual 90 minutes, ‘Spoons will likely still get pre-match drinkers. It will also be serving a selection of international drinks, many hailing from the competing nations. Plus, food will be served till 11pm.

As for risks, there’s always a possibility that a change in government leadership leads to yet more business taxes and regulations. Pubs appear to be easy targets.

Again though, the stock’s decently priced, at 12 times forward earnings. There’s also a 1.9% dividend yield.

Pizza, anyone?

Finally, I want to highlight Domino’s Pizza, which holds the exclusive master franchise for the brand in the UK and Ireland.

The firm recently launched its Chick ‘N’ Dip offering, and enjoyed like‑for‑like growth of 4.5% in Q1 (its strongest in 11 quarters). So it has decent momentum.

And given that the England and Scotland games are at night, I expect solid demand for pizzas. Though, of course, there’s a ton of competition, so this isn’t guranteed.

The biggest attraction though is the 6.1% forecast dividend yield — a tasty level of potential passive income.

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

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

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

Ben McPoland owns shares in Diageo.

The post 3 cheap FTSE 250 stocks to consider buying before the 2026 World Cup kicks off appeared first on The Twelfth Magpie.

The key to this is its business model. But there’s a UK firm with a £6.24 share price that I can see doing something similar – and investors haven’t noticed yet.

Amazon

While AWS is often the focus for investors, Amazon’s marketplace is its largest revenue stream. It’s the biggest and the best in the industry by miles.

The trouble is, margins in this part of the business aren’t intrinsically huge. But that misses an important point. 

Amazon uses its marketplace strength to generate other high-margin revenue. Specifically, this comes from its Prime membership.

The company uses this to put its marketplace even further ahead of its rivals, which leads to more subscriptions. And so on.

This is an extremely powerful business model. And I can see a FTSE 250 company that’s looking to make a similar move.

JD Wetherspoon

I’ve been a bit lonely in having a positive view of JD Wetherspoon (LSE:JDW) shares recently. And that’s fair enough.

Investors have been concerned about the impact of cost inflation. That’s been true across the industry, but especially with the FTSE 250 firm.

A focus on customer value seems to limit its ability to offset rising costs with price increases. And management reinforced this view.

In its last update, the company stated that this year’s profits might be lower than expected. And the stock has been faltering as a result.

There’s no way around the fact that higher costs are a risk. But I see the company making a move to replicate Amazon’s business model.

Franchises

Until recently, JD Wetherspoon hasn’t had a source of revenue like Amazon’s high-margin subscriptions. But that’s changing.

The firm has started opening franchised venues run by local operators. And Wetherspoon’s provides the central admin and IT systems.

Importantly, partners also benefit from the company’s buying power. This gives them huge cost savings. 

That’s been the key to JD Wetherspoon’s lower prices. So it’s a huge advantage for these partner venues. 

Early signs are that this has been transformative for the venues, which is great. But it’s the FTSE 250 firm I’m interested in.

A game-changer?

What does JD Wetherspoon get from letting other operators use its supply chain? Three very big, very important advantages.

The first is a franchise fee (as well as a possible percentage of revenues). And this comes at virtually no cost to the company.

The second is that the firm benefits from expansion with none of those rising costs. These are left to local operators. 

The third is that it gets additional scale. And this reinforces the firm’s key strength, which is its ability to buy in bulk.

I think those are some key advantages. Especially with rising costs making things tough for hospitality companies.

A bargain buy?

JD Wetherspoon’s scale has always given it a cost advantage. But it’s starting to turn this into a source of high-margin revenues.

This could be extremely powerful. It both reinforces the firm’s key competitive strength and widens its margins in a time of higher costs.

It’s the model that’s worked for Amazon. And it’s another reason I think investors should take a closer look at £6.24.

The post How this £6.24 UK stock is copying Amazon’s winning tactics appeared first on The Twelfth Magpie.

There’s a lot going on in the stock market right now. And I think there are opportunities, but investors should still be careful.

Stock market volatility

There are two major threats facing the stock market right now. One is the conflict in Iran and the other is the rise of artificial intelligence (AI).

The issues are very different, but they have something very important in common. They both have uncertain outcomes.

The situation in the Middle East is much more high-octane. It’s often changing multiple times a day and that makes it hard to keep up. 

AI is much more slow-moving. But it’s also less familiar and that makes it harder for investors to find something to compare it to.

All of this means share prices are much more volatile than usual. And that can indeed create opportunities for investors. 

Buy on the sound of cannons

There’s a popular saying about investing during war. It tells investors to “buy on the sound of cannons, sell on the sound of trumpets”. It’s attributed to Nathan Mayer Rothschild, during the Napoleonic Wars. And it’s still relevant in an age where drones have replaced cannons.

It’s a bit like being greedy when others are fearful, but better. People are sometimes right to be fearful – because things are changing.

That might be the case with AI. It doesn’t look like a passing fad – the technology is real and it seems to be here to stay. 

Wars, however, generally don’t last forever. And while share prices are never the most important thing in conflicts, they do move a lot.

Where to look

One stock that’s been under pressure recently is JD Wetherspoon (LSE:JDW). The conflict in Iran is a dual threat for the FTSE 250 company. 

Higher oil prices threaten to both push up its own energy costs and weigh on consumer spending. And the share price is down 15% in a month. 

Betting on a quick resolution to the conflict is obviously risky. But my thesis for JD Wetherspoon shares isn’t based on this. 

It’s based on the fact that the firm has lower costs than its competitors. And this puts it in a better position to withstand short-term shocks.

That kind of advantage is exactly what I look for in an investment. So I think it could be in a very strong position when trumpets sound.

The best time in a long time?

When Bill Ackman says the best companies in the world are on sale, he’s not thinking of JD Wetherspoon. But the principle is the same.

Uncertain situations can create buying opportunities. And the stock market is facing a unique combination of issues.  That means it might well be the best time in a long time to buy shares. But that doesn’t mean things can’t get even better. 

The most important thing is to be ready at all times. Buying opportunities can present themselves when investors least expect them.

The post Is this the best time to buy shares in a long time? appeared first on The Twelfth Magpie.

Things can already seem confusing enough, even before adding in potentially baffling acronyms like ISA, SIPP, ETF, or more (here’s a useful glossary of investment terms).

Actually, though, an ISA can be a useful way to start investing.

Making the most of your money

The reason for that is not about the investing itself. You could do that in a normal share-dealing account, after all.

Instead, the potential advantage of an ISA is about tax. If the shares held in it go up in value – even by a lot – they will not attract capital gains tax. If they pay dividends, those also will go untaxed.

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.

Now is the perfect time to think about this, as every year the end of the tax year marks the closure of that tax year’s allowance.

That deadline is only for putting money into the ISA, though. It can inside it for a while (years, even) before being invested.

So, for someone who has an inkling to start investing, now could be a good time to think about whether a Stocks and Shares ISA might match their needs.

Start as you mean to go on

Investing can seem complicated and, indeed, many people make it complicated.

But look at some of the most successful investors from history as well as today and what becomes clear is that their success is often built on simplicity not complexity.

I think that can be a sensible way to start investing – and keep going.

Doing so involves sticking to businesses you can understand, taking time to understand a company’s financial health, paying close attention to valuation, and thinking of investment as a marathon, not a sprint.

Getting going can be quick

It may take a bit of time to get to grips with the basics of how the stock market works. But the mechanics of actually investing are not complicated.

Comparing options for an ISA, choosing one, and setting it up could probably be done in a matter of days — or perhaps within a day.

So, someone who wants to start investing and does that this weekend should still be in good time to put money into their new ISA before the 5 April deadline a fortnight from now.

Finding the right shares

Once inside the ISA, as I mentioned, the money can sit without being invested.

Right now, though, I think there are some shares worth considering for their long-term potential.

J D Wetherspoon (LSE: JDW), for example, tumbled at the end of last week as the market digested its interim results. Pre-tax profits tumbled by almost a third year on year.

The company warned that rising energy costs are a risk to profits.

National Insurance and labour rate increases have hammered Spoons, adding around £60m in annual costs. That equates to almost 90% of last year’s net profit of £68m.

So, why do I remain upbeat from a long-term perspective?

The pub industry faces ongoing challenges as demand falls and taxes increase, but Spoons is a best-in-class operator. It has a compelling value proposition for customers. It has sizeable economies of scale.

At under 10 times earnings, I reckon its share price now looks like a possible bargain.

The post Could an ISA be a good way to start investing? appeared first on The Twelfth Magpie.

At 550p per share, the Wetherspoons share price is now languishing at one-year lows. This means its forward price-to-earnings (P/E) ratio sits at 12.9 times, well below the 10-year average of 19-20.

Does this represent a top dip buying opportunity? Or should investors avoid the FTSE 250 company like a watered-down pint of Stella?

What’s happened?

Like the broader leisure industry, JD Wetherspoon is suffering from ballooning labour and energy costs. It spooked the market in January when it said “higher than anticipated” costs meant first-half profits would fall year on year, sending its share price lower. Investors have been even less than forgiving following its latest warning today.

Sales have continued ticking nicely higher, up 5.7% in the six months to February, to £1.1bn. On a like-for-like basis revenues were up 4.8%. However, the good work in attracting punters through the door continues to be undone by a range of increasing expenses.

Operating costs rose £28m year on year in the first half, while repairs rose by £10m and business rates by £9m. As a consequence, operating profit tumbled to £52.9m, an 18.4% decline from a year earlier.

For the full year, Wetherspoons Chair Tim Martin said rising pressure on consumer wallets, combined with higher energy, labour and tax-related expenses, could “result in profits that are slightly below current market expectations“.

Pressure rising

The worry for investors isn’t just that costs are rising, either. Wetherspoons is nursing enormous amounts of debt, which rose to £772.9m in February from £724.3m last July.

This is especially concerning given recent developments in the Middle East. As analyst Dan Lane of Robinhood notes, these debts “will bite more now that interest rates have jumped since pre-pandemic levels and a potentially higher inflation environment points to a prolonged pause in interest rate cuts“.

There’s also questions to be asked as to whether Wetherspoons takings will continue rising despite the pub’s famously low prices. With inflationary pressures crimping consumer spending, and the UK economy stuck in low-growth mode, will people drink and eat less when they’re at the pub or take fewer trips out?

Are Wetherspoons shares a buy?

The good news is that Wetherspoons could well benefit from drinkers switching down from more expensive pubs. It’s still outperforming the broader market, and may continue it cash-strapped Brits change their habits.

But that isn’t enough to encourage me to invest. eToro analyst Mark Crouch comments that “wage increases, higher business rates and energy expenses are clearly eroding margins, and these pressures are unlikely to ease in the near term“. Unfortunately,

Wetherspoons shares might be cheap. But I think I’ve found far better value stocks to buy in the current climate.

The post After toppling 11%, are Wetherspoons shares too cheap to miss? appeared first on The Twelfth Magpie.

The reason? Well, this part of the press release didn’t help:

“There is clearly considerable pressure on consumer finances, combined with higher taxes, wages and energy costs for the hospitality industry. This may result in profits that are slightly below current market expectations.”

But I think the City may have over-reacted. Let me explain.

Easier ways to make money

You don’t have to watch EastEnders to know that running a pub is difficult. However, just imagine the problems that Wetherspoons’ boss, Tim Martin, has to contend with. After all, he has 747 boozers to worry about.

But I love the fact that he’s never shy in explaining the issues that the industry, and his chain in particular, are facing. This morning’s announcement is no different.

With careful reasoning – supported by some insightful numbers — he explained how business rates for Scottish pubs have become a “de facto sales tax”, highlighted the “plethora of stealth taxes (non-domestic electricity charges, climate change levies, packaging charges, etc)” placed on his business, and argued for “VAT equality” with supermarkets.

And this is before we know how the conflict in the Gulf is going to affect disposable incomes and whether the pub chain’s margin might come under pressure from rising costs.

Overall, earnings per share (EPS) for the period fell 32.7% to 18.7p.

Not all bad

But the results did contain some good news.

During the period, like-for-like (LFL) sales increased 4.8% compared to a year earlier. Revenue was also up 5.7%.

In February, industry LFL sales were down 0.2%. For the 42nd consecutive month, Wetherspoons outperformed the wider market with a rise of 3.2%. Sales per pub increased 35.4%.

And the drop in the group’s share price means its stock is, on paper at least, attractively priced.

EPS for the year to 25 January was 50.9p, giving a current price-to-earnings ratio of just 10.8. Before today, the five-year average (median) was 15.3.

It’s a similar story when it comes to the group’s balance sheet. Since March 2021, its price-to-book ratio has averaged 2.3. It’s now 1.86.

To be honest, I think today’s 10% drop in the group’s market cap is a little unfair. After all, the group hasn’t said that its full-year profit will be below expectations. It said it “may” be.

So does this mean it’s time to bag a bargain?

Well, it depends. If I knew with a reasonable degree of certainty that the fall in the group’s earnings is a temporary phenomenon then I would say ‘yes’. But given all the problems that Tim Martin lists in his chair’s statement, I can’t be sure.

Based on its revenue, JD Wetherspoon is clearly doing better than the industry as a whole. Pubs are closing all over the place and yet ‘Spoons continues to grow. With its cheap food and drink, prominent high street locations, and strong brand it has lots going for it.

But taking a stake now would be too risky for me. I would like to see an improving bottom line before parting with my money. When I see evidence of this, I shall revisit the investment case.

The post JD Wetherspoon’s share price takes a sobering 10% dip! appeared first on The Twelfth Magpie.

The firm’s half-year results revealed a 30% fall in earnings per share. That’s not a good thing, so should I cut my losses and sell?

Results

If the firm’s news had been a revenue update, things might have looked pretty good. Like-for-like sales increased 4.8%, which is pretty good. 

In fact, it’s better than good. Despite growth slowing in the last few weeks, the business is well ahead of the wider industry.

The trouble is, it isn’t a sales report and margins have been under pressure. The firm also stated that full-year profits might be below expectations.

This is the risk that the market has been worried about for some time with JD Wetherspoon. And it’s pretty clearly manifesting itself.

A total of £71m in extra costs this year looks like a huge problem. Especially for a business that reported £67m in net income last year.

My view, though, has been that JD Wetherspoon is a better business than its numbers show. And I still think that after these results.

Competitive strength

Higher costs across the pub industry are an issue. But I think they’re less of a problem for JD Wethrspoon than its competitors.

The reason for this is that the company’s scale gives it a purchasing advantage. And this is still the case even as other costs go up.

The counter to this is that JD Wetherspoon can’t increase its prices in the way competitors can. A focus on customer value restricts this ability.

Yet I think that seeing this as negative is a mistake. One reason is that it’s not clear other pubs can increase prices – their sales are going backwards.

Another is that the gap between the firm’s prices and its rivals is huge and widening. So it has scope to raise prices while still offering the best value.

I think that means the company is still in a terrific competitive position. But it’s impossible to ignore the fact that profits are getting hit.

Long-term investing

At the end of the day, profits are what matter for investors. But I think that day is a long one and I’m prepared to wait for them.

The firm’s issues are clearly industry-wide, rather than company-specific. And I think that makes all the difference for this business.

The hospitality industry has seen big challenges before. The most recent was the Covid-19 pandemic, which was a disaster. 

JD Wetherspoon took advantage of the crisis in a spectacular way. As a result, average weekly sales per pub are 31% higher than they were before the pandemic.

The firm has also widened the gap with its competitors. And I expect it to do so again in another challenging environment.

I’m not thrilled about the fact that costs are going up. But I think it could be that short-term difficulties create long-term opportunities.

What I’m doing

A 12% decline seems like a fair reaction to the latest results from a short-term perspective. But that’s not what I’m looking at. 

I think the company’s long-term prospects are still very strong. So I see the falling share price as an opportunity. 

There’s a lot that I want to buy in today’s stock market. But JD Wetherspoon is definitely on the list.

The post My JD Wetherspoon shares just fell 12% in a day! Here’s what I’m doing appeared first on The Twelfth Magpie.

In both cases, the situation is more complex than it seems. But I think anyone looking for buying opportunities should give both of these stocks a closer look.

Valuations

One of the key pillars of value investing is to look for a margin of safety in case things go wrong. And at today’s prices, that looks very easy to find with both Jet2 and JD Wetherspoon.

Jet2 has a market value of £2.28bn. But its latest update reported £2bn in net cash on its balance sheet, which covers virtually all of this straight away. 

With JD Wetherspoon, the company has a market value of £750m and another £725m in net debt. This, however, is almost entirely offset by £1.4bn in property, plant, and equipment.

That means the stock market isn’t giving these businesses much credit for any future cash they generate. So, are these huge opportunities or too good to be true?

Jet2: cash is king?

The catch with Jet2 is that a lot of the cash on its balance sheet is already accounted for. Around £1.3bn is offset by what’s known as deferred revenues. 

This represents cash the firm has received up front but hasn’t yet provided the service for. In other words, holidays that people have booked but haven’t yet gone on. 

Deferred revenues don’t show up as debt, so they don’t affect the firm’s net cash position. But they do change the value equation for investors and means it’s not the bargain it first seems. 

Oil prices surging higher represent an ongoing and obvious risk. But I think Jet2’s impressive growth and new Gatwick operations, though, mean the stock is worth considering at today’s prices.

JD Wetherspoon: unlocking value?

With JD Wetherspoon, the reverse might actually be true. The value of the firm’s properties on its balance sheet could actually be understated based on how often it updates them. 

Investors, though, need to consider how realistic it is that the company is going to sell its properties to unlock their value. While I think it’s more likely than most, I don’t give it a high probability. 

That means it’s down to the firm’s cash flows. And I’m much more optimistic here with that big property portfolio keeping leases down to contribute to the lowest costs in the industry.

Hospitality has been under pressure from rising costs and this remains a risk. But pubs have been doing surprisingly well – and I think JD Wetherspoon is the best in the business.

Opportunities?

An initial look at Jet2 and JD Wetherspoon makes them look like investments with huge margins of safety. Alas, investing isn’t quite so straightforward.

My own view is that both companies have something in common. They’re some of the best operators in industries that have been historically difficult to do well in.

Cost pressures in both airlines and hospitality have been and remain challenges. But at times like this, I think investors could do well by taking a look at some of the top names.

The post 2 quality UK stocks trading below intrinsic value? appeared first on The Twelfth Magpie.