The FTSE 250 index can be a great place to find attractive shares to buy. In this area of the UK stock market, there are some stocks that are less researched, which means that there’s more potential for outsized investment returns.
Here, I’m going to highlight two top FTSE 250 shares I’d buy as we start March. Both of these companies have a lot of momentum right now, and I think they have the potential to be great long-term investments for me.
A top FTSE 250 stock
First up is Computacenter (LSE: CCC). It’s a leading independent technology company that helps businesses and government organisations across the world source, transform, and manage their IT infrastructure.
This FTSE 250 company appears to be ticking along quite nicely at present. In a trading update posted in late January, the company advised that it finished 2021 with a strong quarter that was ahead of its own expectations, and that revenue for the year was up 23%. Meanwhile, it also said that its product order backlog was at an all-time high and considerably larger than a year earlier.
Looking ahead, I think CCC is well positioned to generate solid growth in the years ahead. That’s because all over the world, companies are undergoing digital transformation. There is the risk that growth could stall in the short term due to the fact that so many businesses brought forward tech spending during the pandemic. However, given that many businesses are yet to go digital, I think the long-term prospects here are attractive.
As for the stock’s valuation, it’s very reasonable, to my mind. At present, the forward-looking P/E ratio is about 18, which is not high given the company’s growth track record and prospects. At that valuation, I’m a buyer. A dividend yield of around 2.2% is a bonus.
A booming industry
The second FTSE 250 stock I want to highlight today is Tritax Big Box (LSE: BBOX). It’s a real estate investment company that owns a portfolio of large-scale logistics warehouses. These are rented out to retailers such as Amazon and Tesco.
A recent trading update from Tritax was very encouraging. The company advised that market fundamentals remain “strong”, with high occupier demand and “historically low levels” of available space. And it also said that it’s accelerating its development programme with significant development expected over the next 12 months. It believes its development portfolio has the potential to more than double contracted rent over the long term.
One issue to be aware of with BBOX is that the company sometimes raises capital from investors to fund its expansion plans. This can have a negative impact on the share price in the short term. Another risk is the stock’s P/E ratio of 30. This valuation doesn’t leave much room for error.
I’m comfortable with these risks, however, as I’m a long-term investor. The UK e-commerce industry set for strong growth over the next decade. So I think the long-term prospects here are very attractive. And with the stock offering a yield of around 3% right now, I see a lot of investment appeal.
The post 2 top FTSE 250 stocks to buy in March appeared first on The Motley Fool UK.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Edward Sheldon owns shares in Amazon and Tritax Big Box REIT. The Motley Fool UK has recommended Amazon, Tesco, and Tritax Big Box REIT. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
