With the stock market going crazy, here’s a FTSE 250 share I’m thinking of buying
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The stock market was all over the place today (March 23). First, i FTSE 100 it has nosedived and entered correction territory, meaning its fall from recent highs has been 10%+. But as I write, the index has gone back a long way.
The reason for this chaos is the very unpredictable President Trump, who has threatened to destroy Iran’s energy infrastructure while also trying to assure everyone that the conflict will end soon.
With the outcome uncertain and the Strait of Hormuz still effectively blocked, many investors now expect higher inflation, higher interest rates, and perhaps even a recession. So the risk is increasing and the market has been reflecting this.
Now, I’m all invested in Trump’s first term in office, between 2017 and 2021. And that time also included the outbreak of the epidemic, which also caused great fear and uncertainty.
Yet the fact remains that the FTSE 100 is higher now – even after the recent pullback – than it was five years ago. And even if the conflict lifts the global economy out of recession, I fully expect the Footsie to rise in the future when markets stabilize.
London could benefit
Of course, Trump’s consistent policymaking can be beneficial London Stock Exchange. That’s the view of analysts at Berenberg, whose survey of more than 400 global investors found more than a third planned to increase their exposure to UK stocks next year.
Overall, UK stocks are cheaper than those across the pond. Many pay good dividends and are defensive in nature, while not being exposed to potential AI disruptions.
Average growth stock
One FTSE 250 sharing what I’m looking for is a leading sports nutrition and supplement manufacturer Applied Nutrition (LSE:APN). In its interim results (released today) for the six months to 31 January, it reported excellent progress.
Revenue rose 55.6% to £74.5m, while adjusted pre-tax profit rose 53.7% to £20.9m. And management left their full-year revenue outlook unchanged, at around £140m, representing 30% year-on-year growth.
However, the situation in the Middle East affects shipping routes and its ability to serve customers there. As a result, management expects that “some reduction of volumes in the region during the second half“.
The danger here is that Iran’s situation worsens, disrupting shipping routes and trade in the Middle East. This can hurt sales growth.
But with the long view, I like what I see here. The global market for sports nutrition, health and wellness is fueled by tens of millions of people losing weight with GLP-1 drugs.
A high-protein diet is recommended by doctors for GLP-1 users. It is therefore encouraging to see that Applied Nutrition has launched a range of high protein foods with Morrisons. Early sales have been strong.
According to a recent McKinsey survey, 84% and 79% of consumers respectively in the US and UK now see wellness as a priority or important. Indeed, it is the second most important personal thing after family.
Most importantly, most now view supplements as a necessity rather than a luxury. So I think the company can continue to grow even during a recession. Its products cater to elite athletes, dedicated gym-goers, and everyday health-conscious consumers.
The stock trades reasonably, at about 17 times forward earnings. I am tempted.
