Today I’m discussing a couple of FTSE 250 shares which could enjoy an end-of-year bounce in December.
I’d happily buy shares in MJ Gleeson in the run-up to a trading statement at this Thursday’s AGM (December 5) and half-year financials slated for New Year’s Eve. The housebuilder certainly made its shareholders happy in September when it declared that robust average selling prices and turbocharged production rates pushed pre-tax profits 11% higher in the fiscal year to June.
Despite the uncertainty that the prospect of a ‘no deal Brexit’ continues to wreak on the broader housing market, this particular firm has risen 23% in value in 2019 as favourable lending conditions and government support for first-time buyers has kept newbuild sales ticking over nicely. Still, with MJ Gleeson trading on a forward P/E ratio of just 12.1 times there’s plenty more space for additional share price gains.
The builder hiked the full-year dividend 8% last time out to 34.5p per share, and supported by a predicted 7% earnings rise in fiscal 2020 City analysts are expecting another bulky raise to 36p. This leaves MJ Gleeson with a meaty 4.5% yield, one which trashes the British mid-cap average of 3.3%.
Highland Gold Mining
Given the prospect of some political fireworks across the Western world to close out 2019, I reckon getting access to gold is a very good idea. With Christmas being an expensive time of the year Highland Gold Mining in particular might be a very attractive share to buy as at current levels it offers terrific value for money (consider its P/E ratio of 8.1 times for 2020, created by predictions of a 10% bottom-line rise next year, and its dividend yield of 4%).
Brexit uncertainty has been a significant driver of bullion prices in 2019 and with it the 29% increase in Highland Gold’s share price. Current polling projections suggest that no political party will have a House of Commons majority following December 12’s general election, too, meaning that the malaise is threatening to rumble well into 2020. This very outcome when the results come out in a couple of Fridays’ time will surely provide gold prices with a fresh boost.
The other major political events dominating headlines right now involve the current White House administration. It’s possible that combustible impeachment proceedings against President Trump could boost safe-haven assets in end-of-year business, though it’s likely that the commander-in-chief’s tough stance on trade will provide an even bigger catalyst. Bickering with China over tariffs has already taken a chunk out of global economic growth, and news today that the US will whack steel and aluminium tariffs on Brazil and Argentina has muddied the outlook for the world economy even more.
Finally, it’s also worth keeping an eye on political events in the eurozone’s biggest economy, Germany, amid signs that the governing coalition there is on the verge of collapse. With the election of Norbert Walter-Borjans and Saskia Esken as new leaders of the Social Democrats at the weekend — the party in coalition with Angela Merkel’s Christian Democrats — come demands from the duo for key policy changes to keep the partnership going. A series of election losses recently have left Merkel treading on very thin ice, and this latest development could be the one which finally pushes her over the edge.
Plenty of political tension across the US and China, then, that could propel gold prices and with them the share values of Highland Gold and its peers in December. And I haven’t even mentioned the likelihood of more patchy economic data coming in from all corners of the globe to exacerbate investor jitters. It’s a great time to buy into safe-haven stocks, I say.