However, this return pales in comparison to what holders of a certain under-the-radar company have earned.

Incredible performance

Stop a stranger and ask whether they’ve heard of Rank Group (LSE: RNK) and they’ll probably give a blank expression. But they may be more familiar with some of its brands, such as Mecca Bingo and Grosvenor Casinos, even if they’ve never used them.

Now, I’ll be the first to admit that this space doesn’t get my pulse racing. Even so, I’m sure existing holders will be very happen at the recent price movement.

Shares in Rank Group currently stand 91% higher than where they started 2025. The gain’s even greater when tracked over the last 12 months (127%). To make things even more interesting, most of this uplift has only come in the last couple of months.

Strong tailwinds

At least some of this magnificent momentum’s down to improved trading.

In its most recent update, the firm said that like-for-like net gaming revenue had grown by 11% (to around £795m) in the 12 months to the end of June. This was in spite of “significant cost and regulatory headwinds” seen since the start of the final quarter.

As a result, management expects underlying operating profit to come in ahead of expectations.

The outlook’s encouraging too, thanks to land-based casino reforms coming into effect last week (22 July). In a nutshell, these are being introduced to help modernise physical sites, allowing them to complete with online-only platforms. Changes include allowing smaller casinos to operate more gaming machines per gaming table. Sports betting will also be permitted.

Long-term investors have suffered

Of course, there are still risks that come from being a mostly physical (rather than digital) business. Energy costs remain high and the company must also cope with rising wage bills.

Separately, it’s worth noting that Rank shares have performed poorly over a longer timeline. Those who invested five years ago would have seen their capital grow just 12% in value. Meanwhile, Rolls-Royce shares are up nearly…1000%!

To make matters worse, the £750m-cap company stopped distributing cash to holders in wake of the pandemic. These were only reinstated in FY24. Even today, the forecast dividend yield stands at just 1.4%. Granted, this is more than over at the FTSE 100 juggernaut.

And then there’s the question of fair value. The shares now change hands at a price-to-earnings (P/E) ratio of 18. This is significantly lower than Rolls-Royce whose P/E of 41 has arguably got a little silly.

However, they’re rather dear relative to other stocks in the Consumer Cyclicals space, suggesting a fair bit of good news is already priced in.

One for the watchlist

Taking all of the above into account, I’m tempted to add Rank Group to my portfolio today. But I would like to read its next set of results — due mid-August — before making a decision.

Regardless, this example shows that smaller-cap stocks have the potential to outperform our biggest and most popular businesses, especially if they’re snapped up when out of favour.

The post Meet the FTSE stock quietly thrashing Rolls-Royce shares in 2025! appeared first on The Twelfth Magpie.

Up over 80% in 2025

I’m referring to Rank Group (LSE:RNK). It’s a UK-based gambling and entertainment operator with over 100 physical venues. It has a rapidly expanding digital operation comprising more than 80 online brands. I don’t invest in gambling companies out of principle, but that doesn’t mean other investors feel the same way.

The stock’s up a whopping 114% over the last year, with an 83% increase in just the past six months, easily surpassing Rolls-Royce. The surge has come for a variety of reasons. One notable achievement was its inclusion in the FTSE 250 in May. When a stock’s promoted to the index, it typically experiences a spike due to purchases from index trackers. Any fund that replicates the FTSE 250 must immediately take on the relevant stocks, so there’s a period of buying.

Another factor has been its solid financial performance. An update from April showed that like-for-like net gaming revenue (NGR) for the quarter grew 10.9% to £195.6m compared to the same period last year. The digital channel experienced a 14.7% growth.

Interestingly, some of the recent rally in the stock is on the anticipation of a reform that CEO John O’Reilly recently spoke about. He expects “the Government to publish the statutory instruments for land-based casino reforms in the coming weeks and anticipate the roll out of additional machines and sports betting to commence during the summer.”

Looking ahead

It isn’t easy to know precisely how the reform will impact the business in the future. But it’s being seen as a positive. The company has a market capitalisation of £733m. Therefore, it has plenty of room to scale and grow before it starts to stagnate. The price-to-earnings ratio’s 24.95. This is indeed above the FTSE 250 average, but for a growth stock that has doubled in value over the past year, it’s not excessively expensive. From that angle, I feel it can keep moving higher if the earnings per share increase by a similar amount.

One concern is the nature of the sector. ESG’s getting more and more popular, with gambling companies often getting excluded from portfolios. As mentioned, I don’t invest in gambling companies, so please keep this in mind.

At a company-specific level, it’s exposed to a high level of competition. There’s little to differentiate the large players in this area, so they may struggle to continue growing and take market share away from other firms.

When I put everything together, I think there’s a strong case to be made for Rank Group continuing to do well in the coming year. Even though I’ll be looking for more ESG-friendly stocks, investors who are comfortable in this area may wish to consider it.

The post This FTSE 250 stock is outperforming Rolls-Royce so far this year! appeared first on The Twelfth Magpie.

Here are three lesser-known British companies that have delivered impressive returns yet remain largely overlooked by most investors. They may not have made headlines lately but their price performance and solid fundamentals make them worth considering.

Chemring Group

With a £1.5bn market-cap, Chemring Group‘s (LSE: CHG) no penny stock but still pales in comparison to other major UK defence contractors. Yet shares in the group are up almost 70% so far this year, making it one of the best performers on the FTSE 250. As geopolitical tensions escalate, demand for the company’s electronic warfare counter measures and threat detection systems has soared.

The firm’s strong order book and healthy balance sheet are helping fuel consistent growth.

But following the share price surge, Chemring now trades on a price-to-earnings (P/E) ratio of 35, suggesting slight overvaluation, limiting growth potential. Fortunately, it has a modest but well-covered dividend yield and eight years of continuous growth. 

The main risk is its reliance on government contracts and global defence spending. Any budget policy changes in this respect could hurt profits. Yes, the best gains may already be priced in, but the company’s strategy and execution remain impressive.

Rank Group

Shares in Rank Group (LSE: RNK), the operator of Mecca Bingo and Grosvenor Casinos, have rebounded sharply, rising 52% so far in 2025. After years of pandemic-related setbacks and rising costs, the business is finally showing signs of recovery.

The company recently reported better-than-expected results, helped by improving footfall and a higher per-customer spend.

Despite the recent rally, it still trades with a P/E growth (PEG) ratio of just 0.15, indicating that the share price has yet to catch up with projected earnings growth. A leaner cost base and strong brand recognition are key factors supporting a multi-year recovery thesis. 

However, with the UK economy still on a questionable trajectory, the business remains at risk from another economic slowdown. If consumer spending tightens again, it could stall the recovery.

For now however, the momentum appears firmly on its side.

Picton Property Income

Property-related stocks haven’t had the best luck over the past couple of years, but one small-cap that’s soared this month is Picton Property Income (LSE: PCTN).

The shares are up 31% this year, soaring 13% just last month as investor confidence returns to the UK commercial property market. This is particularly visible in business-related areas like warehousing and industrial lets.

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With a P/E ratio of 12 and a 4.7% dividend yield, the stock looks attractive for value and income. Preliminary results last month revealed new lettings are coming in around 6% ahead of estimated rental values (ERV), and annual rental growth up by between 4% to 6%

Of course, interest rate sensitivity remains a risk for all REITs. Any sharp reversal in inflation trends or central bank policy could hit valuations. But with inflation appearing to cool and rates expected to fall later this year, the backdrop could continue to favour well-run property trusts like Picton Property.

The post These 3 under-the-radar UK shares are rallying appeared first on The Twelfth Magpie.

Gambling business

As a quick reminder, Rank is a gambling business based in the UK. Some of its most prominent and best known brands include Mecca Bingo and Grosvenor Casinos.

So what’s happening with Rank Group shares currently? Well, as I write, they’re trading for 91p. At this time last year, the shares were trading for 162p, which is a 43% decline over a 12-month period. The shares took a bit of a hit in June when the business issued a profit warning, but more on that later.

To buy or not to buy Rank Group shares

So what are the pros and cons of me buying Rank Group shares currently?

FOR: Despite a profit warning for the year ended 30 June, analysts are optimistic for Rank Group’s future prospects. I do understand that forecasts may not always come to fruition, however. They predict earnings could surge as high as a triple-digit percentage, and potentially offer a dividend yield close to 5%.

AGAINST: On 20 June, Rank Group announced that it is expecting close to £40m of profit for the year ending 30 June, despite initially reporting it could be between £47m-£55m. Rank Group shares slumped to 79p, but have recovered 15% to current levels. It pointed towards cost pressures but primarily a lack of footfall from international customers and tourists who regularly frequented its London locations, especially prior to the pandemic, that have failed to return. Profit warnings are rarely a good omen for me when reviewing investment viability.

FOR: At current levels, Rank Group shares look decent value for money on a price-to-earnings ratio of just 11. Furthermore, despite a profit warning, at least the company is not in the red and is turning over a profit. Buying now at dirt-cheap levels with a view to longer-term recovery could be a shrewd move for my portfolio.

AGAINST: Macroeconomic headwinds such as soaring inflation and cost pressures have plagued many businesses in the UK. Rank Group is no different. Rising costs put pressure on profit margins. In fact, this is one of the points raised in its profit warning in the update in June. With no end in sight, these cost pressures may continue for the foreseeable future, affecting investor sentiment and returns.

My verdict

Reviewing the positives and negatives, I’ve decided I would not buy Rank Group shares for my holdings. Another factor putting me off is the rise of online gambling in line with the adoption of technology in recent years. Many traditional bingo halls and casino locations have suffered and I believe this trend may continue.

Rank Group shares are tempting, especially at current levels. I do believe they can recover and Rank will continue to be profitable in the future, however. I would rather spend my hard-earned cash on better quality stocks with prospects of profit growth that can offer consistent returns in the longer term.

The post Could falling Rank Group shares be primed for recovery? appeared first on The Twelfth Magpie.

June’s profit warning

On 20 June, the company issued a trading update with a profit warning for the trading year ended on 30 June 2022. The firm expected “softer” performance in its third and fourth quarters from its UK venues. The directors said there had been some improvement after April. But takings were “considerably weaker than expected”.

Rank’s business suffered a lot during the pandemic. And it seems things are taking a long time to get back to normal. Higher-spending overseas customers have been slow to return to the firm’s London casinos. And there’s been “continued softness” in visitor numbers right across the company’s venues.

On top of that, Rank saw a lower-than-average casino win margin in the fourth quarter and cost pressures from inflation. And the bottom line is that the directors estimated operating profit would come in around £40m for the year. Previously they’d predicted a range of between £47m and £55m. So, expectations and the share price took a bit of a wallop. 

Creeping back up

A year ago, the share price stood near 168p and today it’s about 89p. However, it’s been edging a bit higher again since the profit warning. So, could today’s level be a bargain price? Maybe. After all, recovery from the pandemic is ongoing and trading could improve from where it is now. I think the creep higher since June shows that other investors are looking beyond recent trading woes.

City analysts are certainly optimistic. They’ve pencilled in a triple-digit percentage surge in earnings for the current trading year to June 2023. And based on that forecast, the forward-looking earnings multiple is just below seven. Meanwhile, the price-to-book value is around one and the anticipated dividend yield is running at 4.7%. 

That’s a tasty set of value credentials. But it’s always possible for Rank to miss its estimates. Perhaps further operational problems will affect the company. Nevertheless, it often takes recent negative news to create value conditions such as Rank’s now.

Cheap isn’t risk-free

However, even a low valuation is no guarantee of a successful investment outcome for me. All shares carry risks as well as positive potential — even cheap-looking ones.

The company has struggled to grow its earnings since 2018. But I’m optimistic the business could see better times ahead. And the stock tempts me now. I’d be inclined to buy a few of the shares and hold them for at least five years as underlying progress in the business unfolds. 

But it’s not the only consumer-facing stock that’s caught my gaze. I also like the look of retailers Next and JD Sports Fashion.

The post Is it time to buy cheap-looking Rank Group shares?  appeared first on The Twelfth Magpie.

Could this threat be baked into Trifast’s current valuation, however? I think it could. At current prices of 140p, the bolt-builder trades on a forward price-to-earnings growth (PEG) ratio of 0.2. This leaves a wide margin of error for earnings projections to miss, in my opinion (City analysts currently expect profits here to rocket 81% in the fiscal year to March 2022).

As a long-term investor I like Trifast a lot. Revenues might suffer in the near term if car manufacturing issues continue. But I think its sales outlook for this decade is pretty bright as demand for zero emissions vehicles booms. I also like the company’s exposure to other fast-growing end markets like energy, medical, and infrastructure.

A high-risk penny stock I’m looking at

Bingo hall operator Rank Group (LSE: RNK), which also trades at 140p, is a share that’s not the faint of heart. The gambling giant suffered a shocker in 2020 and early 2021 as the Covid-19 crisis forced the closure of its estate. The invasion of the omicron variant on these shores raises the spectre of fresh lockdowns in the weeks and months ahead, too.

It’s high risk, therefore, but I also think this almost penny stock could ultimately prove high reward. So it’s my opinion that the recent share price weakness could provide an attractive dip buying opportunity for my portfolio. The popularity of bingo in Britain has boomed in recent times and is expected to continue growing. This bodes well for Rank, which operates Mecca bingo halls along with the brand’s online portal.

I also like Rank’s exposure to the fast-growing online casino market under its Grosvenor masthead. Net gaming revenues here ballooned 12% during the three months to September.

Market day

Property listings specialist OnTheMarket (LSE: OTMP) trades barely above the penny stock limit, at 102p per share. It has ducked back towards its former territory as concerns over omicron have risen. Signs that home sales are falling sharply hasn’t exactly helped confidence in the company, either. Home sales dropped by more than half between September and October, according to HMRC.

The possibility that housing demand will continue to sink in 2022 due to economic uncertainty and the reinstatement of full-fat stamp duty is possible. It’s my opinion, however, that homebuyer interest — and consequently traffic at OnTheMarket — will remain strong as low interest rates and intense competition among lenders will remain in play. Significant government help for first-time buyers should also keep business ticking along nicely.

OnTheMarket is looking to capitalise on this opportunity by improving its website and its brand over the next 12 months, too. Like Trifast and Rank, I think this cheap UK share could help me make a lot of money.

The post 3 nearly penny stocks to buy appeared first on The Twelfth Magpie.

I think all of the three companies outlined below have significant growth potential, which is why I would buy them for my portfolio today. 

Growth potential

The first company on my list is the engineering business Weir (LSE: WEIR). The group produces engineering equipment for the mining and oil and gas sectors, and it is currently benefiting from an increase in commodity prices. As prices rise, miners have more cash to spend on new and existing projects. This means more orders for Weir. 

According to its interim results for the six months to the end of June, orders during the period increased 17% and adjusted operating profit jumped 12%. 

I think commodity prices will continue to boom as demand for critical resources expands. Governments are spending significant sums on infrastructure projects worldwide, and the resources for these projects will need to come from somewhere. Weir may continue to benefit as miners grow to meet this demand. 

That is the main reason why I would buy this stock for my portfolio of UK shares. However, I should note that the commodities industry is incredibly volatile. If prices slump, producers could slash orders. That would be terrible news for Weir. 

Recovery play 

In my opinion, casino operator Rank Group (LSE: RNK) is an attractive pandemic recovery play. During the pandemic, the firm’s casinos were forced to close. The company survived by boosting the size of its online business, which provided much-needed cash flow for the organisation. 

Thanks to its online business, the group was in a solid position to stage a recovery as the economy reopened. And since that reopening, in the 13 weeks to 15 August, sales have rebounded. During the period, they were just 19% below the same period in 2019. With average weekly revenues of £5.7m, the firm is comfortably above its cash break-even level of £4.4m. 

I think these figures imply the company is set for a strong recovery in the weeks and months ahead. That is why I would buy the stock for my portfolio of UK growth shares. 

Issues that may destabilise the group’s growth include the risk of another lockdown, and additional regulations, which may increase costs and reduce customer spending. 

Basket of UK shares 

The final company I would buy as a growth investment is Virgin Money UK (LSE: VMUK). 

I think this challenger bank has tremendous potential. Its growth slowed last year, mainly due to the pandemic, but management is targeting expansion this year. The company is trying to grow in personal lending and mortgages, and it is targeting higher interest loans to improve profit margins. 

It is also investing heavily in its digital capability, and this is already yielding results. Over 100k customers have signed up for online products, and it is working with other fintech companies to improve the offering for consumers. 

As the bank pushes ahead with its growth plans, I would buy the stock for my portfolio of UK shares. 

However, this equity might not be suitable for all investors. Banks can be challenging to understand, and if there is a sudden economic downturn, this sector is usually the first to feel the pain. 

The post 3 UK shares to buy with growth potential appeared first on The Twelfth Magpie.

Airline easyJet (LSE: EZJ) and bingo halls and casinos owner Rank Group (LSE: RNK) were both floored by pandemic lockdowns and restrictions. Their share prices are still languishing far below their pre-pandemic levels.

But I think they’re fundamentally sound businesses. And I reckon their discount prices make them great stocks for me to buy in August.

Low flyer

In easyJet’s last pre-pandemic trading year (to 30 September 2019), it made an underlying profit of £349m. In the weeks between a trading update on 21 January 2020 and the pandemic crash, the stock traded within a market-capitalisation range of between £5.51bn and £6.16bn. Put another way, between 15.8 and 17.7 times the profit.

Today, easyJet’s market capitalisation is just £3.88bn, or 11.1 times the profit of the last normal year’s trading. If the company were to get back to its pre-pandemic profit and the stock were to regain its pre-pandemic valuation, the upside would be between 42% and 59%. In terms of the share price, that’s between about £12 and £13.50, compared with the current £8.50.

Risks to a positive outcome

Earlier this month — the day after ‘Freedom Day’ — easyJet published a trading update for the three months to 30 June. The first thing I’m looking at with businesses like this is whether I think they can get through to a return to normality without going bust.

Virus variants and renewed restrictions or lockdowns remain risks. As such, I have to accept there are potential downside scenarios that could be damaging for my investment. Having said that, the company ended the period with access to £2.9bn of liquidity. With this headroom, I’m more than hopeful of a positive outcome. As such, this discount FTSE 250 stock looks very buyable for me.

Low rank

The calendar year of 2019 was Rank’s last 12 months of normal trading. It made an underlying profit of £77m. Between its half-year results on 30 January 2020 and the pandemic crash, the stock traded within a market-capitalisation range of between £1.11bn and £1.27bn. Or between 14.4 and 16.5 times the profit.

Rank’s market capitalisation is currently just £0.79bn, or 10.3 times the profit of the last normal 12 months’ trading. If the company were to get back to its pre-pandemic profit and the stock were to regain its pre-pandemic valuation, the upside would be between 41% and 61%. In terms of the share price, between 237p and 271p, compared with the current 168p.

Risks but additional liquidity

As with easyJet, I have to accept there are downside scenarios that could adversely affect an investment in Rank. Again, the risks of virus variants and renewed restrictions or lockdowns feature prominently.

However, Rank has made two announcements this month that are positive for its liquidity. First, it’s agreed an additional £25m credit facility. Second, it’s won a favourable ruling on an £80m VAT refund claim. Industry watchers believe HMRC is unlikely to appeal. As such, this is another FTSE 250 stock I’d be happy to buy.

The post 2 dirt-cheap FTSE 250 stocks to buy in August appeared first on The Twelfth Magpie.

I believe buying a basket of these companies could be one of the best ways to gain exposure to the UK recovery. As such, here are two FTSE 250 stocks I’d buy today.

FTSE 250 growth champions

The first company on my list is Pets at Home (LSE: PETS). This is the largest retailer of pet products in the country. Figures show the number of pets across the country has ballooned since the beginning of the pandemic. And it looks as if consumers are more willing than ever to splash out on their furry friends. 

According to the company’s most recent results, revenues across the group increased 8% for the financial year ended 28 March. Underlying profits rose 6.1%, excluding a £40.4m charge. The business will be using this cash to fund the expansion of its vet practices across the country. 

Unlike many other companies that have experienced a pandemic boost, I think it’s unlikely this will be a flash in the pan for the FTSE 250 stock. Pet ownership isn’t usually something that lasts for a couple of months. Many pets, of course, can live for years, suggesting the company has access to a whole new range of customers that’ll be returning for years. 

As management looks to build on this growth, I’d buy the FTSE 250 company for my portfolio right now. That said, retail is an incredibly competitive industry, and Pets will likely face competition from online retailers and other high street peers in the future. If the company ignores this challenge, it could lose customers. 

Recovery play

While I’d buy Pets as a growth play, I’d also acquire fellow FTSE 250 casino operator Rank (LSE: RNK) for my portfolio. Rank’s physical casinos have been closed for much of the pandemic. Luckily, the company’s online business has provided much-needed cash flow during this period. 

Now the country’s fully open again, management can start to rebuild the group’s shattered operations. According to a trading update published at the beginning of July, even before reopening, the firm’s venues were trading “above cash breakeven.” In the company’s Grosvenor casinos outside London, gaming revenue had already returned to 2019 levels. 

However, I’m aware this stock may not be suitable for all investors. Gambling is a highly regulated industry. As such, there’s always going to be a risk that companies like Rank could have their licences revoked. If they fall foul of regulations or licensing laws, authorities are usually quick to act. 

Still, based on the above update, I’m confident we will see a further improvement in the company’s trading during the second half of the year. That’s the reason why I’d buy the FTSE 250 stock right now. 

The post FTSE 250 stocks: 2 to buy appeared first on The Twelfth Magpie.

UK shares to buy

The first company I’d buy is recovery play Rank Group (LSE: RNK). Like most hospitality businesses, the casino operator has been winded by the pandemic. Thankfully, the group’s online business has provided some much-needed cash flow.

According to its latest trading update, like-for-like net gaming revenue was down 76% on the prior year for the quarter ended 31 March. Revenue from its gaming venues fell 98%, while digital revenues were down just 3%.

However, over the next few months, Rank should be able to reopen its gaming venues. Based on reports emerging from the hospitality industry over the past few weeks, it seems consumers aren’t holding back their spending when venues reopen. 

This suggests to me the enterprise could experience a strong recovery over the next few weeks and months. That’s why I’d buy this company for my basket of UK shares. 

Of course, Rank might not be suitable for all investors. Its primary business is gambling, which is highly regulated. Some investors might not be comfortable owning shares in a gambling enterprise. That’s understandable. The company faces some significant risks and challenges operating in this sector.

Still, despite these risks, I’d acquire the stock today. 

Flying high 

I’d also acquire Wizz Air (LSE: WIZZ) for my basket of UK shares. This airline entered the crisis in a relatively stable position. It had a strong balance sheet and was recording record growth in passenger numbers and profitability.

As such, while the company expects to report a full-year net loss of between €570m to €590m, at the end of the year the group had cash and equivalents on its balance sheet of €1.6bn. Therefore, this funding should provide the group with enough financial firepower to drive its recovery.

Indeed, many other airlines don’t have access to the same level of financial resources. That puts Wizz in a unique position to take market share and capture business from struggling competitors. 

That said, the airline industry is incredibly competitive. So, just because Wizz has a strong balance sheet today doesn’t necessarily mean the company will be able to grab market share and survive a price war. Especially when many of its competitors have been bailed out by national governments. 

This is probably the most significant challenge the company faces right now. However, I’d buy the stock for my portfolio of shares because I believe Wizz has what it takes to continue to navigate the competitive airline industry successfully.

As the sector starts to recover, I think it’s one of the few airlines worth buying. 

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