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The FTSE 250 has a good few names that will be instantly acquainted to many within the UK. Some that do properly go on to the massive league, particularly the FTSE 100. Noteworthy examples embrace JD Sports activities Vogue and Auto Dealer.
Nonetheless, some family names proceed to languish within the FTSE 250. Right here, I’ll have a look at two of them to see if both attraction to me.
Shaken, and stirred
First up, we have now luxurious carmaker Aston Martin (LSE: AML). I used to be re-watching Goldfinger (1964) yesterday, which is the place James Bond first drives the Aston Martin DB5. The model has been iconic ever since.
Sadly, the inventory doesn’t mirror the status. Down 97% since itemizing in 2018, it has been extra scrapyard than showroom!
Final yr, wholesale volumes fell 9 % to six,030 vehicles, as Aston repositioned its mannequin vary and skilled weak spot in China. Gross margin was 36.9%, a 220 foundation factors lower, whereas the pre-tax loss got here in at a hefty £289m.
This yr is perhaps higher, with a recent vary of fashions, together with the plug-in hybrid Valhalla supercar due within the second half. New CEO Adrian Hallmark has pledged to finish the losses inside 18 months.
Nonetheless, my predominant concern right here is the stability sheet danger. Web debt was £1.26bn on the finish of March, larger than the present market cap of £862m. Simply writing that places me off shopping for the shares.
Altering occasions
Subsequent, we have now ITV (LSE: ITV). Once we discuss family names, ITV is actually that, with its content material pumped into tens of hundreds of thousands of houses throughout the UK over many many years.
I walked previous a home the opposite day that had the Emmerdale theme tune blasting via an open window. It provoked a powerful nostalgia in me, transporting me straight again to childhood in my Nanna’s entrance room. Heartbeat does one thing related.
Nonetheless, shares of the broadcaster have slumped by 69% over the previous decade. And in an indication of the occasions, Emmerdale can have one full hour lower per week beginning in January. Related modifications are being made to Coronation Road.
ITV’s Managing Director of Media and Leisure Kevin Lygo stated this transfer will assist “create headroom within the general programme finances for funding in programming that may assist ITV develop attain in a really very aggressive market.”
The very fact he stated ‘very’ twice is revealing. As a result of competitors, I simply don’t suppose ITV has wherever close to the mindshare — particularly amongst youthful viewers — or aggressive edge that it had within the pre-streaming period.
Now, it’s true that its streaming platform ITVX is rising strongly, and now accounts for over 1 / 4 of group advert income. That is the place I watched Goldfinger, funnily sufficient.
ITV can be reaching new audiences — and advertisers — via YouTube. In the meantime, the Studios division, which additionally makes content material for different streamers, stays a precious asset.
Nonetheless, I worry ITVX is just going to exchange the standard broadcast viewership. The inventory may be very low cost at 8 occasions earnings, with a 6% dividend yield, however I feel that displays ITV’s future progress challenges.
Wanting forward, Netflix and Amazon Prime Video are prone to change into stronger, with bigger budgets. I fear that ITVX will more and more change into a small fish in an enormous streaming ocean.
Subsequently, I see higher progress alternatives for my ISA.
