Image source: Getty Images
2024 has been a big time for UK stocks after years of disappointing returns. Until now, the FTSE 100 has risen 6.3%. He FTSE 250meanwhile, it is up 5.8%.
However, these results pale in comparison to those recorded by the main US stock indices. He S&P 500 has risen a whopping 27.6% since the beginning of January.
The continued underperformance of domestic stocks means that London Stock Exchange It's still packed with brilliant offers. So I'm putting together a list of the best ones to buy in the New Year.
According to eToro, around 53% of its clients expect the global bull run to continue into 2025. Here's a UK stock that I think could skyrocket in value next year.
Setting the scene
Economic conditions remain difficult heading into the New Year. According to the Insolvency Service, the number of company insolvencies rose to 1,966 in November, 13% more year-on-year.
The service expects the numbers to remain dire in 2025 as well. It says that “Insolvency levels have remained high throughout the year (and) we anticipate they will remain so in 2025, as companies continue to have unsustainable levels of debt..”
Moderating inflation and falling interest rates are providing support. However, the upcoming increase in the national living wage and higher national insurance contributions could offset these positives in the new year.
A prosperous population
With the British economy also contracting again, insolvency service providers such as Begbies Traynor (LSE:BEG) should continue to be in high demand. The latest financial data from December 10 highlighted how Alternative Investment Market (AIM) The company is thriving in the current landscape.
Revenue here rose 16% in the six months to October, and sales rose 11% organically. In terms of appointment volume, it was the market leader and also increased the number of larger insolvency cases in the group.
As a result, adjusted profit before tax also increased by 16% year-on-year.
Begbies has proven to be a reliable profit generator over time. In fact, they have increased in four of the last five years. It's a record that looks set to continue, and especially as the company continues to spend money on acquisitions.
The firm acquired White Maund Insolvency Practitioners earlier this month as part of its ongoing expansion drive. Acquisitions contributed to 5% of revenue growth in the first half.
underrated gem
Today, Begbies shares trade on a forward price-to-earnings (P/E) ratio of 9.1 times. I believe this valuation does not reflect the company's solid progress or its strong balance sheet, which should support more M&A.
I also think Begbies' low rating leaves room for a share price rebound in 2025.
City analysts expect annual earnings per share to rise 1% this financial year (to April 2025) before accelerating to 4% next year. These are figures that I believe could be improved in the coming weeks and months.
A sudden recovery in the UK economy could disrupt Begbies' earnings growth. Earnings could also disappoint if you make bad acquisitions. But as things stand, I'm seriously considering adding it to my portfolio.
