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With UK shares coming again into trend in the meanwhile, it’s tempting to assume that the very best alternatives have been missed. However metropolis consultants reckon there are two shares which have enormous development potential over the following 12 months or so.
Unlikely? Let’s try to discover out.
A present?
Card Manufacturing unit (LSE:CARD) is a typical sight on the UK excessive avenue. However in December 2025, the cardboard and reward retailer issued a revenue warning. Even with the group positioning itself on the worth finish of the market, it doesn’t appear to have escaped the impression of lowered disposable incomes. Greater employment prices, cussed inflation and intense competitors haven’t helped both.
However analysts reckon the group’s shares are presently (11 February) 57% undervalued. And with a ahead price-to-earnings (P/E) ratio of simply 5.7, I can see why they may maintain this view. The inventory additionally provides a sexy dividend. Based mostly on quantities paid over the previous 12 months, it’s yielding 6.7%. After all, given the revenue warning, there’s a chance this is perhaps reduce. And the group has a comparatively brief historical past of paying dividends, so the previous isn’t a great information right here.
To try to seize extra revenue, the group designs, manufactures, distributes, and sells its playing cards. It additionally claims this helps it react extra shortly to altering tastes.
However the enterprise feels slightly old style to me. It just lately purchased Funky Pigeon to spice up its on-line providing however sending playing cards does really feel like a factor of the previous.
The inventory’s additionally probably the most risky round. With a five-year beta of three.1, it means if the inventory market strikes up (or down) by 10%, Card Manufacturing unit’s share value will change, on common, by 31%.
Regardless of its enticing valuation and the spectacular 12-month share value targets, I feel there are higher alternatives to think about elsewhere, in markets with more healthy long-term development prospects.
Corresponding to?
One instance is Gamma Communications (LSE:GAMA).
With the world shifting away from copper telephone strains to cloud-based communications, the phone group’s more likely to be one of many greatest beneficiaries. Its Unified Communications as a Service (UCaaS) providing is presently accessible within the UK, Netherlands, Spain, and Germany.
Analysts reckon its shares are 67% undervalued. With a P/E ratio of solely 9.6, there’s robust proof to help this view. And as an added bonus, the group additionally pays a modest dividend. The inventory’s presently yielding 2.3%.
However the group’s revenue has been impacted by an absence of financial development and a lack of confidence amongst its goal buyer base of small and medium-sized companies. Additionally, there’s loads of competitors on the market.
And the UK’s plans to close down its Public Change Phone Community (PSTN) in early 2027, is a double-edged sword. Some clients are shifting to fibre options as a less expensive various to UCaaS. Though Gamma does present this service, it earns a decrease margin than on its cloud providing.
Nevertheless, it operates in an trade the place the route of journey is obvious. After all, the PSTN switch-off is perhaps delayed (it has been earlier than) however, ultimately, the whole lot will likely be within the cloud.
I feel the latest pullback within the group’s share value – it’s fallen 33% since February 2025 – may very well be a superb shopping for alternative. I reckon Gamma Communications is a inventory to think about.
