Gym Group (LSE:GYM) is a stock with strong momentum in the FTSE All-Share Index. Since bottoming out at 83p in April 2023, it has risen to 186p today. 

However, if City forecasts are on the money, the stock could rise another 30% to 242p in the next 12 months. What’s more, all nine analysts covering the stock rate it a Strong Buy.  

Why are they so bullish? Let’s dig in a little deeper. 

Pressing ahead

As a quick reminder, the group provides affordable 24/7 gym membership through 260+ sites across the UK. Despite more than doubling since 2023, the share price remains 40% lower than before the pandemic (which obviously caused operational havoc).

So the story here is one of rebuilding profitability. And on this front, the group has been making great strides. Last year, net profit jumped 68% to £7.4m on revenue of £244.9m (+8%). 

It ended 2025 with 900,000 members, up 4% year on year. However, by the end of February, this figure had grown to 999,000. 

Of course, the period after Christmas is always a busy one for gym membership growth (New Year’s resolutions and all that). Nevertheless, the fact the group now has 1m members — up from 796,000 in 2019 — is impressive.

However, not resting on its laurels, the company says it’s “accelerating new site openings programme to take full advantage of the available white space and market growth opportunity”. This will involve opening another 75 sites over the next three years. 

Also impressive is that these openings will be funded entirely through free cash flow. Last year, it generated £38.3m in free cash flow, a 10% increase on 2024.

Meanwhile, non-property net debt was reduced by £2m to £59.3m, resulting in an low adjusted leverage ratio of 1.

Finally, the strong momentum has continued into 2026, with revenue up 9% by the end February. Average revenue per member per month increased 5%. 

What are the risks?

This operational and financial progress underpins the stock’s move higher since 2023. However, there are a couple of risks worth mentioning here. 

The first is that the company faces a lot of competition. Speaking personally, I use my local leisure centre (which has a pool), despite there being a Gym Group facility 15 minutes away. But I have so many options, as a new JD Gym has opened nearby and there are various other fitness centres knocking about.

The second issue is that the stock’s trading at 35 times forward earnings. This isn’t necessarily a problem, as analysts see strong earnings growth lowering this to around 18.5 by 2028. But if growth slows, the stock could quickly retrace, as it’s not cheap on this metric. 

Finally, while the firm launched a £10m share buyback in January, there’s no dividend here, so investors will be relying on share price appreciation to make a return. 

Fitness boom

Is the stock worth considering? I think so, given that the health and fitness industry is booming right now. Gen Z, which now makes up around 40% of the group’s membership base, are visiting the gym more often per week.

And as potentially millions more people slim down from powerful GLP-1 drugs Mounjaro and Wegovy in the years ahead, the business looks set up for further membership growth. 

The post 9 out of 9 analysts rate this FTSE small-cap stock a Strong Buy  appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• Down 47%, is this growth stock finally worth buying in May?
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income

Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has recommended Gym Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I currently have five FTSE 350 investment trusts inside my ISA and Self-Invested Personal Pension (SIPP). One of these is a new holding — 3i Group — initiated a few weeks ago while Pershing Square has risen 12% in the past year.

The other three, however, have been on fire. Let’s take a look at why, as well as a sixth one I’ve currently got my eye on.

Powerful themes

The trio I’m referring to are Scottish Mortgage Investment Trust (LSE:SMT), BlackRock World Mining Trust, and Pacific Horizon Investment Trust. The first is in the FTSE 100 while the other two are from the FTSE 250.

Here’s how they have performed in the past year (excluding dividends):

• Scottish Mortgage: +45.4%
• BlackRock World Mining: +109.2%
• Pacific Horizon: +92.5%

Each has benefitted from powerful individual investing themes. Scottish Mortgage has seen the value of its SpaceX holding skyrocket higher. In fact, SpaceX could soon become the largest IPO ever.

I’ve had to be patient with this investment. Three years ago, the growth trust traded at a massive discount to its underlying net asset value (NAV) because the market was wary about private holdings like Stripe, SpaceX and ByteDance.

While I do have some concerns about SpaceX’s extreme valuation, I remain bullish on Scottish Mortgage’s wider unlisted portfolio, which now includes Claude maker Anthropic and Revolut. I reckon the stock’s worth considering.

As for BlackRock World Mining, it has surged from its exposure to gold and silver miners. Even after a recent pullback, these precious metals are up about 44% and 158%, respectively, in the past 12 months.

Additionally, the trust has a sizeable weighting towards copper, which itself has increased 38% in value in the last year. Demand for the red metal is accelerating while supply remains constrained.

Accelerating hyperscaler spending on AI infrastructure, alongside electrification, grid expansion and the broader energy transition, is driving demand for both power and materials. Copper sits at the centre of this theme, given its critical role in electrification and power intensive infrastructure.
BlackRock World Mining.

The risk here is a sharp fall in the price of gold, which makes up around a third of the portfolio. This isn’t one I’m looking to add to right now, despite the 2.5% dividend yield on offer.

Finally, Pacific Horizon has benefitted from top holdings Taiwan Semiconductor (TSMC) and Samsung Electronics. These chipmakers have exploded higher due to their central role in the global AI infrastructure buildout.

A slump in these names is a risk to performance, though with Pacific Horizon trading at a 9.3% discount to NAV, it’s worth a closer look.

The sixth trust

Speaking of AI, I’m considering buying shares in Manchester & London Investment Trust. This one has gone all-in on AI hardware, with a portfolio packed full of chipmakers (Nvidia, AMD and Micron), semiconductor equipment stocks, energy providers, and data centre cooling firms.

Of course, there’s high sector concentration risk here, with Nvidia making up almost 25% of the portfolio itself. However, the trust has generated a 17% annualised return (with dividends reinvested) since 2015, and is offering a 3.7% dividend yield.

Better still, it’s trading at a 18.7% discount to NAV. It therefore offers a discounted way to get broad exposure to the AI buildout, which could reach a cumulative $7trn by 2030.

The post 3 investment trusts on fire across my SIPP and Stock and Shares ISA appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• Down 47%, is this growth stock finally worth buying in May?
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income

Ben McPoland has positions in 3i Group Plc, BlackRock World Mining Trust Plc, Nvidia, Pacific Horizon Investment Trust Plc, Pershing Square, Scottish Mortgage Investment Trust Plc, and Taiwan Semiconductor Manufacturing. The Motley Fool UK has recommended Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The UK might not be top of mind when looking for growth stocks to buy. After all, barnstorming tech shares such as Nvidia and Palantir are listed across the pond. They’re up 627% and 1,665% respectively in just three years!

However, the UKs home to some cracking, lesser-known growth companies. Here are two I think deserve a closer look today.

Wise

Let’s start with the largest, Wise (LSE:WISE). The international money transfer specialist has a £10.8bn market-cap, but rather than try join the FTSE 100, it’s moving its primary listing to the US.

However, it will keep a secondary listing in London, where each share currently costs 1,050p. This puts the stock on a forward price-to-earnings (P/E) ratio of 26.5.

I don’t think that’s outrageous for a company that did the following last year:

• Grew underlying income 19% on a constant currency basis to £1,619m.
• Increased cross-border volume 25% to £181.7bn.
• Grew customers 21% to 18.9m.
• Guided for pre-tax profit margin to be towards 16%.

Looking ahead, the growth engine still seems very strong to me. As well as people, more businesses are signing up to use Wise, whose infrastructure makes cross-border transactions cheaper and faster. Some 75% of transfers are now instant.

Plus, Wise is lowering the take rate as it scales. While some investors might not like this because it’s sacrificing short-term profitability, it should place Wise in a much stronger competitive position over the long run.

And as a long-term investor, that’s what I’m interested in.

However, in the near term, the situation in the Middle East represents a risk to growth. If soaring inflation and energy costs tip the global economy into a downturn, then it’s possible less people and businesses will move money around.

Despite this risk, I’m happy to have Wise as a top-10 position in my portfolio. The stock’s up 21.5% year to date, but I still think it’s worth considering anywhere near £10.

Boku

Turning to Boku (LSE:BOKU) now, this is a much smaller company, with a £525m market-cap. Despite its modest size, Boku works with the world’s largest merchants, helping them drive sales in more than 60 countries through local payment methods (LPMs).

For example, let’s say someone in Thailand wants to subscribe to Netflix. They select their digital wallet as the payment method, and Boku provides the backend piping that connects Netflix with that specific local wallet. Its network now reaches 200+ LPMs, and is growing every year.

Last year, revenue jumped 30% to £129m, up from £62m in 2021. By 2028, analysts expect that to reach more than £210m, with LPMs expected to account for 60% of the $11trn global e-commerce market.

However, Boku isn’t a loss-making fintech. Its profits are growing alongside strong top-line expansion, and management’s confident margins will improve in future years.

The good news is that this earnings growth doesn’t look priced in, with the stock trading at just 18 times next year’s forecast earnings. That’s cheap for a scalable platform that expects to continue growing at 20% over the medium term.

Again, a global economic downturn is a risk, as is competition in the payments space. But I reckon this under-the-radar stock’s worth considering buying for the next five years.

The post 2 top growth shares to consider on the London Stock Exchange appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• Down 47%, is this growth stock finally worth buying in May?
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income

Ben McPoland has positions in Nvidia and Wise Plc. The Motley Fool UK has recommended Netflix, Nvidia, and Wise Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Bank of England recently warned that stock market investors are ignoring mounting risks in the global economy. Warren Buffett has also been vocal, recently saying that parts of the market today resemble a “casino“.

Yet many blue-chip shares just keep heading higher. Should I be worried about this?

A far-from-perfect backdrop

The FTSE 100 index has jumped roughly 20.5% over the past year, while the tech-heavy Nasdaq 100 has doubled that. Admittedly, a year ago was a low starting point because that was when President Trump opened a can of worms in the shape of punishing US tariffs.

With major indexes not far off all-time highs, clearly most investors are not too concerned at the moment. Yet global food prices have just jumped for the third month in a row, driven higher by the Iran war. Cereal, vegetable oil, and meat are all up.

Meanwhile, oil and energy prices are high, piling more misery on inflation-weary consumers. I have one friend who’s debating whether the family’s annual summer trip to Greece is affordable this year.

Naturally, many companies are also cautious. For example, JD Sports Fashion said earlier this week that it expects a drop in profits this year due to consumer pressures from the Iran war and high youth unemployment.

The Middle East conflict is far from over, with much of the inflationary pressure has still to work its way through the system this summer. Then there’s Ukraine, where the tragic war grinds on, threatening to spread to neighbouring countries.

To top all this off, there’s the AI wildcard. This technology is allowing companies to become more efficient, potentially leading to millions of jobs disappearing worldwide in the next few years.

Given the backdrop, I’m quite surprised that investors aren’t more worried. InterContinental Hotels Group (IHG) stock, for instance, just hit an all-time high week. I own IHG shares, so I’m not complaining. Just a bit baffled!

Dry powder

Now, I should say that none of this is to scare anyone. Remember, corrections are perfectly normal and even a healthy part of stock market investing. They’re usually a tremendous time to put money to work.

Therefore, it’s probably wise to have some cash on the sidelines in case we see a pullback this summer. In the meantime, I’ll continue to invest when I like what I see.

What stock has caught my eye?

Diageo (LSE:DGE) has certainly struggled with weak consumer spending and changing drinking habits among younger generations. Its share price is down 53% in five years.

Given everything I’ve written, and the ongoing consumer weakness risks, you would think I’m keen to avoid Diageo. However, while I’m not going to buy any shares at all-time highs, this unpopular one looks attractive to me for a couple of reasons.

First, world-class brands like Guinness, Johnnie Walker, and Smirnoff continue to grow globally in many locations. And turnaround specialist CEO Dave Lewis has identified ways to make Diageo more competitive to boost overall volumes.

The stock also looks cheap, trading at 13 times forward earnings. There’s no market froth here — quite the opposite.

Finally, the stock’s sporting a 3.1% dividend yield, so it could boost my passive income while I patiently await a potential turnaround. I reckon the Guinness maker is worth considering today.

The post Here’s what is baffling me about the stock market today appeared first on The Twelfth Magpie.

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• Down 53% in the past 5 years. Is this the best value stock in the FTSE 100?
• Dear Diageo shareholders, mark your calendars for 6 August
• Down 31%, how much could £5,000 of Diageo shares be worth in 12 months?
• How to build a £20,000-a-year passive income from a Stocks and Shares ISA
• After years of pain, is the Diageo share price looking up?

Ben McPoland has positions in InterContinental Hotels Group Plc. The Motley Fool UK has recommended Diageo Plc and InterContinental Hotels Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Duolingo (NASDAQ:DUOL) is meant to be a growth stock in my ISA. Instead, it has been shedding value faster than a snake on GLP-1 medication.

Since I bought this stock early last year, it has crashed 65%! The digital education firm’s first-quarter report earlier this week showed slowing growth.

In contrast, Palantir (NASDAQ:PLTR) continues to report eye-popping growth. The question I’m asking myself now is: should I dump Duolingo and switch to Palantir?

A mixed quarter

Duolingo offers over 40 different languages, as well as courses in maths, music, and chess. It has a free ad-supported offering and two paid subscription tiers for more serious students.

Heading into Q1, management warned that bookings growth would be slower because it was working to improve the free user experience to capture a wider pool of learners. It’s aiming for 100m daily active users (DAUs) in 2028.

Looking at the results, I see no immediate red flags. Revenue increased 27% to $292m, beating estimates, while DAUs grew 21% to 56.5m. Paid subscribers jumped 21% to 12.5m, and the free cash flow margin improved to 50.6% ($147.8m), which is exceptional.

Looking ahead, however, management warned that Q2 bookings would slow to approximately 6%, before accelerating to approximately 10.5% for the full year. Bookings serve as the leading indicator for what revenue will roughly look like in the coming quarters.

A blowout quarter

Meanwhile, Palantir is showing no weakness. In fact, the AI software company reported another blockbuster quarter earlier this week.

Revenue skyrocketed by an astonishing 85% to $1.6bn, with full-year guidance raised to 71% growth. US commercial revenue grew by a staggering 133%, as firms continue to flock to its Artificial Intelligence Platform (AIP).

CEO Alex Karp was quick to downplay these achievements, as he said: “We are an N of 1. Our financial results now demonstrate a level of strength that dwarfs the performance of essentially every software company in history at this scale.”

It’s worth noting that Palantir isn’t just disseminating AI software to others. It’s also using the technology to reduce headcount even as the firm’s growth scales explosively.

My move

Honestly, it’s tricky to assess whether Duolingo is successfully laying the foundations to become a much larger company or its growth is over. Clearly, the market thinks the latter, given that Duolingo’s enterprise value to free cash flow is now just 11.

Personally, I think that’s far too cheap given that we see no evidence of AI disruption in its business, despite the technology already being around for years.

In Q1 alone, we published 20,500 course units…that is more than 10 times what we were shipping per quarter just two years ago. AI has fundamentally changed what is possible for us, and I believe we are just scratching the surface.
CEO Luis von Ahn

In contrast, Palantir is trading at more than 100 times trailing free cash flow. So, it’s chalk and cheese with the valuations.

As I see it, the Duolingo story is in temporary limbo (and investors hate uncertainty), whereas the Palantir growth story looks fully priced in. My assessment then is that Palantir stock is currently overvalued but Duolingo looks undervalued.

On this basis, Duolingo might be worth a look. But I’m leaving them both alone to focus on other stocks.

The post Should I dump Duolingo from my ISA and buy Palantir stock instead? appeared first on The Twelfth Magpie.

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• Palantir stock: I’m buying the dip after this week’s blowout Q1 earnings
• Buy the dip on Palantir shares?

Ben McPoland has positions in Duolingo. The Motley Fool UK has recommended Duolingo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Warren Buffett has been worried about the stock market for some time. Indeed, the legendary conglomerate he and Charlie Munger built, Berkshire Hathaway, has been a net seller of stocks for 14 consecutive quarters.

As a result, Berkshire’s now sitting on nearly $400bn in cash!

Last weekend, the ‘Oracle of Omaha’ warned again about the current stock market. In an interview with CNBC, he said we’ve never had “people in a more gambling mood than now“. He likened today’s market to a “church with a casino attached“.

A casino! What should I do as an investor if Buffett is correct? Here are my thoughts.

Is there a casino?

Looking around the market, it’s not hard to spot the speculation that Buffett is referring to. Outside of crypto, the two most obvious areas to me are in the AI infrastructure buildout and the space sector.

When I mention the AI buildout, there are two parts to that. There are leading chipmakers like Nvidia, Micron and AMD whose profits are absolutely skyrocketing, thereby justifying much higher share prices (at least in the short-to-medium term).

On the other hand, there are smaller, more speculative stocks that have piggybacked on this powerful theme. For instance, Ceres Power (LSE:CWR) is up 949% in the FTSE 250 in just the past year!

The massive expansion of AI data centres has created a need for reliable on-site power. And because traditional power grids often can’t keep up, companies are turning to fuel cells. 

Ceres is a fuel cell technology company. In this sense then, the excitement makes sense.

However, Ceres is also unprofitable, with just £60m in revenue expected this year. This translates into a forward price-to-sales (P/S) ratio of 24.

I found this stock quite interesting last summer at 150p. However, now at 725p, I think Ceres is very much part of the casino that Buffett is talking about.

Speculative space

Space is another exciting growth market that has turned very speculative in 2026. We can see this with the extraordinary $1.75trn valuation that SpaceX is hoping to achieve this summer.

The rocket pioneer now has a division called SpaceXAI, so it combines both space and AI in one investment. Again though, this has driven most other space-related stocks to speculative levels.

Rocket Lab (NASDAQ:RKLB) is one. As a vertically integrated space company, this is the closest listed comparison to SpaceX.

Hence why the stock’s up roughly 2,431% in three years — including a 21% surge today (8 May).

Rocket Lab is growing like gangbusters. In Q1, revenue surged 63.5% to $200.3m, while the backlog of work grew to a record $2.2bn. It sold more rocket launches in Q1 than in the full year 2025!

The stock has been on my watchlist for some time. However, the forward P/S multiple is around 64, which I don’t think offers me much value. I think I’ll get the stock much cheaper in future if I’m patient.

Sticking to the church

If parts of the Nasdaq resemble a casino, then the London Stock Exchange is still a church, with a lot of value on offer. And perhaps because of my age, I much prefer visiting a quiet cathedral these days to a glittering casino.

So the UK is where I’ll focus my attention in May.

The post Warren Buffett just sounded an alarm to the stock market appeared first on The Twelfth Magpie.

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Ben McPoland has positions in Nvidia. The Motley Fool UK has recommended Advanced Micro Devices, Nvidia, and Rocket Lab. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Passive income continues to be one of the most popular subjects people want to learn about — and that’s among all ages.

It’s easy to understand why. The idea of cash quietly rolling in while you’re asleep, on holiday, or watching Netflix sounds far more appealing than endlessly swapping time for money. 

But there’s a catch. Truly passive income rarely starts off passive. Usually, there’s the upfront investment of either time or money (often both), and the income isn’t ultimately guranteed. 

Still, over the years, I’ve researched (which took time) and gradually bought (money) a number of income-paying stocks that now require very little day-to-day effort on my part. They’re nowhere near making me retirement money yet, but they’re steadily doing their thing in the background.

Want to know which dividend shares are paying me tax-free passive income streams while I sleep? Read on and I’ll tell you, including one of my favourites right now. 

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

What are dividends?

Through dividend-paying shares, investors can aim to receive regular cash payments simply for holding the company’s stock. Even better, many UK shares currently offer dividend yields way above the interest rates available on savings accounts.

In 2026, companies in the FTSE 100 are expected to dish out a record £88bn in dividends to shareholders, according to investing platform AJ Bell. If so, that would beat last year’s total. 

Naturally, dividends are never guaranteed, as companies can cut them during tough periods. Today, the war in Iran is certainly adding a fair amount of uncertainty and risk.

Still, I love the long-term potential because dividends can compound over time. Reinvesting those payouts into more shares can gradually create a snowball effect in my portfolio. That’s the aim.

A £750,000 portfolio that eventually yields 9%, through dividend growth and reinvestments, would generate £67,500 a year in income. 

High-yielders

Now, I should point out that not all of my portfolio is focused on passive income. Today, I hold quite a few growth stocks that pay little or no income.

However, a handful of the shares I do hold (in the table below) offer very chunky dividend yields.

Note, the first three of these are due to pay dividends within the next two months. And because they’re held in my Stocks and Shares ISA, the income will be tax-free.

Which is my favourite?

Obviously, I like all four of these shares, but my favourite right now is HSBC. The banking giant reported earnings earlier this week, sending the share price down 5%. Coincidentally, this puts the forward dividend yield at about 5%.

However, the quarter looked resilient, with underlying revenue rising 4% to $19.1bn and pre-tax profits stable at $10.1bn. There was strong growth in its wealth management division, which has been a key focus for the Asia-focused lender.

While the Middle East situation adds near-term risk and is clearly holding back growth, full-year guidance was maintained.

But it’s the longer-term growth across Asia that appeals to me as a shareholder. With a massive presence in Hong Kong, HSBC is positioned as a bridge for capital flowing in and out of mainland China. Then there are long-term growth opportunities in India.

HSBC stock’s trading at a reasonable 10 times forward earnings, so doesn’t look overvalued. I think it’s worth considering for passive income.

The post Here are the lazy passive income streams paying me while I sleep appeared first on The Twelfth Magpie.

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• Here’s how a stock market crash could actually be great for your retirement planning!
• How much do you need an ISA for a £31,352 second income?
• HSBC shares plunged 5% on Tuesday. Here’s what I did…
• Just over £13 after its Q1 results, here’s why HSBC shares still look a bargain-basement buy for me anywhere below £20.68

HSBC Holdings is an advertising partner of Motley Fool Money. Ben McPoland has positions in Aviva Plc, HSBC Holdings, Legal & General Group Plc, and LondonMetric Property Plc. The Motley Fool UK has recommended Aj Bell Plc, HSBC Holdings, LondonMetric Property Plc, and Netflix. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Chip stocks Nvidia and Taiwan Semiconductor (TSMC) have been pretty hot. But nowhere near Micron Technology and Advanced Micro Devices (AMD), which have been hotter than the sun’s surface.

In just the past month, Micron and AMD are up 77% and 88% respectively. So it’s no surprise to see them and Nvidia represent three of the four most-bought stocks on AJ Bell in the last 24 hours.

The reason, of course, is that there’s a memory chip shortage due to sky-high demand from the artificial intelligence (AI) infrastructure buildout. And due to this, the profits at these chip firms are going through the roof, with no sign of the shortage ending anytime soon.

For investors who are unsure which chip stock to buy, the following investment trust holds all the big names and is trading at a sizeable discount to its underlying net asset value (NAV).

All-in

Manchester & London Investment Trust (LSE:MNL) is a £362m-cap business that’s gone all-in on this AI theme. Led by manager Mark Sheppard, it’s made a big bet that almost all of the value will go towards AI hardware companies rather than software or anywhere else.

As such, it has had a massive portfolio weighting towards Nvidia (42% last month), Broadcom (11%) and TSMC (10.3%). These helped drive a 21.6% total return in April, thrashing the Nasdaq 100‘s 12.6%.

The trust’s three-year share price return is now an excellent 166%, while the 10-year NAV return is 449%. Since the management team took over in September 2015, the total return (with dividends reinvested) is around 17% a year.

AI-packed portfolio

We have positions in Memory, CPUs, GPUs, TPUs, Optics, Networking, AI Model Labs, Semi Fabrication, Semi Equipment, Energy, Power & Cooling, Financial Applications, Neo-Clouds, Robotics, and Space.

Manchester & London Investment Trust.

Zooming in a little closer on the portfolio, we see many companies that are creaming it today as hyperscalers such as Amazon, Meta, Google and Microsoft spend a fortune on data centres.

These are essentially the ‘picks and shovels’ of AI.

Concentration risk

Of course, an extremely high concentration like this adds significant risk. Were the market to turn bearish on the AI hardware theme, the trust would almost certainly underperform badly.

That said, management’s been making some portfolio adjustments recently that reduces this risk somewhat. For example, Nvidia has been trimmed and now represents ‘just’ 24.5% of assets.

The reason for the cut is that the trust believes Nvidia may experience some production delays with its next-generation Vera Rubin chip. However, with AI capital expenditure expected to top $1trn in 2027, it still sees a path to $500 for Nvidia stock within three years.

If so, that would be a more than doubling from today’s share price.

Rare combo

Is the stock worth considering for bullish AI investors? I think so, as Manchester & London’s currently trading at a 23% discount to NAV, thereby offering a cheaper and more diversified way to invest than buying the individual AI-related shares.

Plus, the trust intends to pay a minimum 40p dividend for the next five years. Based on the current share price, that translates into a dividend yield of 4.2%.

It’s a very rare combo to get massive AI growth exposure and decent passive income in a single stock.

The post Want to invest in AMD, Micron and Nvidia stock on the cheap? Check out this FTSE trust  appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
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Ben McPoland has positions in Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool UK has recommended Advanced Micro Devices, Aj Bell Plc, Alphabet, Amazon, Bloom Energy, Lam Research, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Games Workshop (LSE:GAW) has taken to being a FTSE 100 stock like a duck to water. Since entering the blue-chip index in December 2024, it has gone up another 50% or so in value.

This takes the 10-year return to approximately 4,050%. But that’s before dividends. If we include those, the 10-year annualised return is 47.2%, according to AJ Bell.

To put that into context, a £5,000 investment made a decade ago would have returned almost £240,000 by now! This is obviously very rare.

Another rare thing, though, is that Games Workshop hasn’t split its stock during this time. So it has gone from less than £5 per share in May 2016 to hit £201 this week.

Out of convention, firms will usually split their stock if the price gets too high. This can attract more individual investors, who can’t afford to buy an individual share costing hundreds (or thousands) of pounds. In this sense, it can improve liquidity.

Why hasn’t Games Workshop — the world’s largest miniature wargaming company — done so?

What’s a share split?

For the sort of forward stock split I’m talking about, it would simply mean increasing the share count by issuing new shares to existing investors. For instance, if Games Workshop did a 10-for-1 stock split, investors previously holding 10 shares would then have 100.

The cost per share would fall from, say, £200 to £20. Crucially though, there would be no change in the company’s overall valuation.

I like to think about it in terms of a pizza. The value of the holding is the same (the pizza), but it has been sliced into more individual parts.

Corporate culture

As far as I can tell, Games Workshop has never done one, despite being public since the early 1990s. Why not?

Well, it probably doesn’t need to because its shares are overwhelmingly held by institutional investors. Whether each one is £1 or £1,000 is neither here nor there to them. Meanwhile, there’s a move towards fractional shares, allowing more retail investors to get on board regardless of price.

But corporate culture probably plays a part, too. The Warhammer maker doesn’t engage in acquisitions and its trading updates are usually short and sweet because the annual report gives shareholders (like myself) everything we need to know.

Perhaps the firm will split its stock in future, but it would likely be to support its employee share scheme rather than follow market convention.

I note our promotion to the FTSE 100, but want to stress that it changes nothing… our mission is to make the best fantasy miniatures in the world, to engage and inspire our customers, and to sell our products globally for a profit. We intend to do this forever.
Non-executive chair Mark Lam.

Pricey stock

This genuine long-term focus is what attracted me to the company, as well as its loyal customer base and ultra-high profit margins. It has valuable IP stretching back decades, with film content in the works with Amazon.

Unfortunately though, the stock’s forward price-to-earnings multiple is currently 32. This high valuation doesn’t leave much room for, say, an unexpected slowdown in growth.

If the share price was to decline 15%+, however, I think Games Workshop would be an excellent stock to consider. But I see better opportunities around right now.

The post This surging FTSE 100 share just hit £201! Will it ever split its stock?  appeared first on The Twelfth Magpie.

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Ben McPoland has positions in Games Workshop Group Plc. The Motley Fool UK has recommended Aj Bell Plc, Amazon, and Games Workshop Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I’ve occasionally compared Aston Martin (LSE:AML) shares to a James Bond motor after a high-speed chase — shattered and bullet-ridden, with plenty of red ink leaking from the carmaker’s financial statements.

However, like one of the fictional spy’s crumpled Aston Martins, this FTSE 250 stock soldiers on. In fact, it has jolted back into life in recent weeks, rising from 36p to 46p. This includes a 10% jump today (6 May).

So, had someone with a playful sense of humour invested £10,007 in Aston Martin on 1 April, they would now have about £13,550. But had they put the same amount in five years ago, the figure today would be less than £300!

Why’s the stock driving higher?

The stock’s recent move uphill can first be traced back to the company’s annual report, published on 25 March. At first glance, however, it’s quite difficult to see what was so positive.

Revenue slumped 21% to £1.26bn, while the pre-tax loss widened from £289m to £364m. The carmaker was hit by a hurricane of challenges, ranging from tariffs and weak sales in the US and China to production delays with its high-priced special models.

However, in the fourth quarter, Aston Martin delivered 152 of its $1m Valhalla plug-in hybrid supercars. These high-margin beasts helped raise the average selling price (ASP) to £232k, up from £178k in the previous quarter, and drove quarterly cash flow into positive territory.

The company has other high-performance vehicles out, including the Vantage S and DBX S. The latter was voted super SUV of the year in 2025 by Top Gear Magazine.

As an aside, I saw a new Aston Martin Vanquish Volante convertible recently. Parked up with its beautiful sage green paintwork glistening in the sun, the car had a small admiring crowd around it, with some taking snaps.

God only knows what reaction the Valhalla gets!

Improving financials

The momentum continued into the first quarter of 2026, as the firm delivered another 102 Valhallas. This saw the gross margin improve 680 basis points to 35%, and the ASP rise 17% year on year.

The operating loss reduced from £67.3m to just £8.9m. And management sees the annual adjusted operating loss narrowing to £92m from £189m last year.

Finally, Chair Lawrence Stroll’s consortium pumped in another £50m, bringing liquidity to around £230m.

Am I tempted?

As a big fan of the brand and cars (confession: I was one of the Vanquish Volante admirers), I’m very tempted to scoop up some shares around 46p. I don’t like seeing Aston Martin in semi-obscurity in the FTSE 250.

However, that’s my heart speaking. My head sees the bottom line in the table above. Net debt of £1.46bn was up from £1.27bn the year before. And financing costs were the main reason why the adjusted pre-tax loss widened to £114m, despite the operational progress.

Another thing that worries me is the ongoing situation in the Middle East, which is packed with wealthy Gulf buyers who might not be in the mood for new sportscars this year. The luxury market in China remains very challenging.

If Aston Martin can keep making progress, adventurous investors might make a fortune buying at 46p today. But I’m still not convinced enough to invest myself.

The post £10,007 invested in Aston Martin shares on 1 April is now worth… appeared first on The Twelfth Magpie.

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Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.