But that can mean it’s a better place to find overlooked stocks with amazing growth potential.

#1 Keller Group

Keller Group (LSE:KLR) is the world’s largest geotechnical specialist contractor, offering ground improvement, piling, grouting, earth retention, instrumentation, and monitoring services worldwide.

And it’s a winner on many levels.

It’s a top quality company, and that’s driven by its market position and economic moat. It’s not a huge moat, but large, complex infrastructure projects increasingly favour one contractor that can self-deliver multiple ground solutions.

It boasts a return on capital around of 19.7%, return on equity of 24.7%, and an underlying operating margin of around 6.7%. Its return on common equity at 26.7% is particularly strong, with the industrial sector average being around half of that.

You’d think this would mean the stock trades at high multiples. But it doesn’t. Keller Group trades at 7.9 times forward earnings with that figure expected to fall to 7.4 times in 2026.

This is complemented by a decent dividend yield, sitting around 3.2% for 2025 and rising to 3.4% in 2026. The balance sheet is pretty robust, with a net debt position around £154m. That’s very manageable for this £1.2bn-company.

Risks? Well the company has pointed to a slowdown in residential development work in the US — its largest market. This is mirrored in Europe. It’s clearly a cyclical stock, albeit with more structural drivers than a developer, for example.

Personally, I absolutely think this is a stock worth considering.

#2 TBC Group

TBC Group (LSE:TBC) shares are up 30% over the past 12 months. And strangely that means it’s lagging its Georgian peer Lion Finance, which is up 99%. That doesn’t mean TBC Group is overlooked, however. Lion Finance has simply performed better operationally.

However, I do think there’s a very strong argument that TBC Group is undervalued, regardless of where its peers are going. At 5.7 times forward earnings, falling to 5.1 times in 2026, it’s among the cheapest banks listed in the UK.

It also boasts strong profitability figures, including a 24.1% return on equity and an operating margin above 43%. These are far stronger than all UK high street banks.

The dividend is also a winner at 6%. Coverage at 2.9 times suggests this dividend isn’t under threat.

The risks are operational. Its Uzbek operations are complex to manage, and growth in its broad Georgian retail and SME markets have proven less profitable than Lion Finance’s strategy. Political and economic uncertainty in Georgia also adds risk.

However, if TBC executes well, scaling digital platforms, expanding lending, and improving efficiency, profitability could rise, boosting return on equity and potentially leading to a re-rating and higher shareholder returns.

I believe TBC Group is also worth considering.

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The stock market looks like it should end the year strongly. And interest rates appear increasingly likely to fall. That could mean a swing in favour of growth investing. Here are two I think investors should consider right now.

#1: Speedy Hire

With November’s first-half results update, Speedy Hire (LSE: SDY) CEO Dan Evans said: “Despite subdued markets, we are gaining market share and winning significant long-term contracts, leaving us far better positioned to take advantage as and when market conditions improve.”

The company did record a first-half loss before tax of £15.1m. And we’re still on for a full-year loss. But we saw underlying operating cash flow of £44.6m, which the board says should substantially help deleveraging in the next 12-24 months.

The “as and when market conditions improve” bit is the main sticking point. And I think the shares could remain weak at least until the full year is up. Or maybe even until we see the first concrete signs of getting back to profit.

Revenue boost

But Speedy Hire has a tie-up with ProService (previously HSS Hire) which the boss says should “generate £50m-£55m of annualised revenue and significant earnings accretion in its first full year after integration.”

There’s a forecast price-to-earnings (P/E) ratio of 7.3 for 2027, when analysts expect to see those profits returning. By the standards of potential multi-year growth stocks, that looks low to me.

The interim dividend was cut “in line with the previously guided rebasing of dividend payments,” announced in October. It should mean a total dividend of 1p per share. But that would still yield a decent 3.7% on today’s price.

#2: Keller

Ground engineering specialist Keller (LSE: KLR) is valued on a low forward P/E of 8.2. And it would drop as low as 7.6 on 2027 forecasts.

It all hinges on predicted steady growth in earnings per share between now and then. But in a November trading update, CEO James Wroath said the company “remains on track to deliver a full-year performance in line with market expectations.” So we should be on to hit an analyst consensus for underlying operating profit of £214m.

Management seems to think the shares are undervalued too. At least, that’s what the latest £25m share repurchase programme says to me — following from on a previous £25m buyback completed in the first half of the year.

Strong cash

On the liquidity front, the board is targeting a net debt/EBITDA range of between 0.5x and 1.5x. Anything above 2x and I might start getting a bit worried. But that sounds solid to me.

Profit margins in the business aren’t the biggest. And an average analyst target price of 1,890p is only 16% above the price at the time of writing — so not all that stretching a growth target. But even with the shares up 150% over five years, I still rate Keller as a growth stock to consider.

Oh, and there’s a dividend on the cards from this one too. The 3.2% yield would make a nice extra.

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A low P/E might hint at a bargain — or it could be flashing a warning sign. That’s because these numbers alone don’t guarantee growth or a turnaround. They’re anchored in current or forecast earnings that depend on wider economic conditions, demand, supply chains and consumer habits. In other words, today’s ‘cheap’ stock might stay cheap if profits don’t recover.

Two FTSE shares currently stand out to me with P/E ratios under 7. But do they represent genuine bargains, or potential value traps?

The struggling private label goods giant

McBride (LSE: MCB) is Europe’s largest supplier of private label and contract-manufactured household cleaning products. From detergents to disinfectants, its goods fill the shelves of major supermarkets under own-brand labels.

Unfortunately, the company’s fortunes have plateaued. The share price tumbled 13% this week after its full-year trading update on 16 July revealed that operating profit will only be in line with expectations, largely due to a slowdown in demand for private label products.

This follows a price boost back in January, when McBride announced it would resume paying dividends. That’s a promising development that adds significant income value to the stock.

After the latest sell-off, it now trades on a rock-bottom P/E ratio of 5.8. That might seem tempting, but the relatively high P/B ratio of 2.8 tells a less comfortable story. 

What’s more, the forward P/E has climbed to 6.3, implying earnings are expected to decline further.

If the group can’t reignite demand or carve out new growth avenues, it’s hard to see the share price staging a meaningful comeback. For now, I’d consider steering clear until management delivers a workable turnaround strategy.

A solid foundation

By contrast, I think Keller Group‘s (LSE: KLR) an undervalued stock worth considering. The FTSE 250 geotechnical specialist handles piling, grouting and ground engineering projects across the globe. Despite a subdued performance this year, the shares are still up an impressive 124% over five years.

Keller looks attractively valued, with a current P/E of 7.2 that drops to 6.8 on a forward basis, suggesting the market expects earnings to improve. That view’s supported by earnings per share rising a hefty 60% year on year.

Profit margins are modest, but a robust return on equity (ROE) of 25.6% underscores management’s efficiency. Meanwhile, Keller offers a 3.55% dividend yield with a low 25% payout ratio. With over two decades of uninterrupted dividend payments, it has shown resilience through multiple cycles.

Of course, risks remain. CEO Michael Speakman steps down in August, which could unsettle leadership. Deutsche Bank also recently downgraded the stock to Hold, trimming its price target by nearly 8%.

My view

For me, McBride looks like a value trap — a low P/E masking weak underlying demand. Keller, on the other hand, seems genuinely undervalued, with a track record of rising earnings, reliable dividends and a forward outlook that still points upward. 

Among FTSE shares trading on low multiples, that’s exactly the combination I look for.

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Positive trajectory

As the world’s largest geotechnical specialist contractor, Keller has a unique position in the construction value chain — getting the ground ready for major infrastructure, industrial, and commercial projects. This positioning has allowed it to deliver consistent growth and resilience even as many UK small-caps have struggled to maintain momentum.

Earnings have grown significantly in recent years, with statutory profit after tax soaring 59% in 2024, for example. Another highlight from the 2024 results was the near-doubling of free cash flow to £192.6m as underlying operating margin rose 100 basis points to 7.1%.

A strong balance sheet

This operational strength is mirrored in Keller’s balance sheet. Net debt plummeted from £237.3m in 2023 to just £29.5m in 2024, with net debt-to-EBITDA leverage at a conservative 0.1x. Looking ahead, net debt is forecast to turn into net cash by 2027. The forecasts show a net cash position of £62.5m in 2027, but I believe this is too conservative. Either way, the strong balance sheet further de-risks the investment case, I feel.

Building on this, valuation metrics suggest Keller remains attractively priced. The forward price-to-earnings (P/E) ratio stands at 8.3 times for 2025, dropping to 7.9 times in 2026 and 7.6 times in 2027. That’s well below market averages for a business with Keller’s record and prospects.

The EV-to-EBITDA multiple is similarly modest, at 3.6 times for 2025 and trending down to three times by 2027. This multiple reflecting both earnings growth and deleveraging.

Meanwhile, dividend growth is decent. Dividends per share are projected to rise from 49.7p in 2024 to 58.5p by 2027. The yield increasing from 3.4% in 2025 to 3.7% in 2027 while coverage remaining strong. The payout ratio hovers around 27%-28% throughout the period. That indicates sustainability.

The bottom line

Keller’s long-term value creation is underpinned by structural growth drivers. Global demand for infrastructure renewal, urbanisation, and climate-resilient construction supports a healthy pipeline. The company’s exposure to sectors like power and industrial (27% of revenue) and infrastructure (33%) positions it well for secular trends. This includes the surge in data centre construction and the associated energy infrastructure.

However, investors must remain mindful of risks. The 2024 annual report highlights macroeconomic uncertainty, including the potential impact of US fiscal policy, such as Trump-era tariffs and spending bills. Broader economic slowdowns, inflationary pressures, and geopolitical tensions could also affect project pipelines and margins.

Nonetheless, I rather like Keller Group’s value proposition. It’s valuation in undemanding even though it operates in a typically cyclical sector and its balance sheet is strong. It’s a stock I’m going to watch very closely and I’d suggest other investors do so too. I believe there’s some evidence it could slowly push higher over the coming years.

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Here, I’m going to highlight three shares that came up on my screen. I think these stocks could be worth considering as value plays in February.

A huge fall

Let’s start with JD Sports Fashion (LSE: JD.) because this stock has experienced a huge fall recently. Currently, it’s around 50% off its 52-week high.

Now, the company is experiencing some consumer demand challenges at present and these could persist in the months ahead. However, for patient long-term investors, I reckon there could be an opportunity here.

In the coming years, JD Sports Fashion is planning to roll out lots of slick new stores across the world in an effort to be a leading global retailer of athletic footwear and apparel. So, there’s potential for revenue and profit growth in the long run.

This stock currently trades on a forward-looking P/E ratio of just 6.3, so it looks dirt cheap. However, I’m using the earnings per share forecast for FY2026 (the year ending 31 January 2026) here and this could come down.

One person who clearly sees value though is CEO Regis Schultz – earlier this month, he bought £99k worth of stock.

Down but not out

Another stock that has tanked and looks cheap right now is insurer Prudential (LSE: PRU). Currently, it’s about 25% off its 52-week highs and trading on a P/E ratio of about eight.

The main problem for this stock has been China and its weak economy. Today, Prudential is heavily focused on Asia, and China represents a key part of its long-term growth strategy.

I expect economic conditions in China to pick up at some stage in the future. And when they do, Prudential’s earnings and share price should get a lift.

Of course, US/China trade wars are a risk now that Donald Trump is US President. These could hurt the company’s prospects.

On the plus side, Prudential has been buying back a ton of shares recently (it announced a $2m buyback last year). This move – which indicates that management sees the stock as cheap – should help to boost earnings over time.

A Trump play?

Speaking of Donald Trump, one UK stock that could potentially do well while he’s in power is Keller Group (LSE: KLR). It specialises in building foundation technology.

Over the next four years, the US is likely to see a huge amount of construction activity (data centres, semiconductor plants, infrastructure, etc.) as Trump aims to ‘make America great again’. Given that Keller has significant exposure to the US, it’s well placed to capitalise.

Like the other two stocks I’ve highlighted, this one is well off its 52-week highs (about 19%) and looks cheap. Currently, it trades on a P/E ratio of about 7.3 so it appears to offer a lot of value.

I will point out that Keller is a global company. So, weakness in other geographic regions is a risk.

Given the low valuation, however, I like the risk/reward setup. I reckon this stock can do well in the years ahead.

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The FTSE 250 enjoyed a bright start to 2024 but the momentum has fizzled out lately.

The index of medium-sized UK companies is up 10.44% over 12 months, but it’s dropped 2.51% in the last six. It’s down 3.03% in the last month as the UK recovery slows.

While blue-chips listed on the FTSE 100 generate 75% of their earnings overseas, many investors view the FTSE 250 as a domestic affair. Yet that’s not entirely accurate. Some 46% of turnover is generated from markets outside the UK.

I think this makes it nicely balanced to take advantage both of UK and international growth opportunities.

A great time to buy cheap UK shares?

Unfortunately, the UK hasn’t been great lately. GDP growth slumped in the third quarter, to just 0.1%. The economy actually shrank 0.1% in September.

And that was before the Budget on October 30, which hit employers with additional national insurance contributions totalling £25bn. That may squeeze margins and growth from April.

With interest rates now expected to stay higher for longer, next year may be tough too. Housebuilders, retailers, pubs, restaurants, financial services and property companies are heavily represented on the index, and may struggle if rates stay high.

Yet much of the risk is priced in, with the FTSE 250 trading on an average price-to-earnings (P/E) ratio of just 10.5. I’m used to it trading closer to 14 or 15 times earnings. For a long-term investor like me, I think this is a solid opportunity to hop on board. There’s just one thing holding me back.

Typically, I prefer to buy individual stocks rather than trackers. Lately, I’ve had my eye on FTSE 250-listed Keller Group (LSE: KLG). It’s a ‘geotechnical specialist contractor’, which means it lays the foundations for construction projects, and operates worldwide.

I’d rather buy shares in Keller Group

It’s the type of company that should do well when the global economy is booming, which it isn’t at the moment. On the other hand, with such a huge market to target, this £1bn company should be able to find more than enough opportunities.

It had a blistering first half, with statutory pre-tax profits jumping 121% to £95.3m and full-year performance “materially ahead” of expectations, according to its 6 August update.

I considered buying Keller on 22 September, but with its shares up 130% in a year I feared momentum might flag. I got that right as the shares have dipped 10.78% in the last month, although they’re still up 78.66% over 12 months. Is this a buying opportunity for me? I think so.

Keller relies on governments and businesses funding new infrastructure projects, which may slow in these troubled times.

On 14 November Keller said it was still on track to hit a full-year expectations but the shares dipped due to weakness in Europe. I’m now thinking the dip is a buying opportunity with a P/E ratio of just 9.5. That’s slightly below the index average. The yield has edged up to 3.03%.

I think this is a good time to consider a FTSE 250 tracker. But I think it’s an even better time for me to buy Keller Group. Which I’ll do when I’ve scraped together some cash.

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That’s comfortably below today’s FTSE 250 average valuation of 12.4 times earnings. I’m always wary of buying stocks after a good run, but this suggests I could still have an opportunity to get in at a decent price.

Can the price keep climbing?

The geotechnical specialist contractor lays the foundations for construction projects across five continents, which gives it a pretty big market to tilt at.

Its shares rocketed after last month’s first-half results showed a 121% jump in statutory pre-tax profits to £95.3m. The share spiked on the day and has subsequently held on to its gains, which isn’t always the case.

First-half sales only rose 2% to £1.49bn but these things tend to come in fits and starts, depending on contract wins. Keller’s done well, given recent economic and certainty, but it’s not without risk.

It relies on governments and businesses green-lighting new infrastructure projects, but with the US and Chinese economies struggling (and deep in debt), the necessary capital may be in short supply.

Keller’s 2.96% yield’s modest but that’s purely down to the soaring share price. The board recently hiked its dividend per share 19% to 16.6p.

So is this now my favourite FTSE 250 share? Well, it’s coming up against some strong competition, in the shape of challenger bank OSB Group (LSE: OSB). This takes retail deposits through savings franchises Kent Reliance and Charter Savings Bank, and lends them to specialist mortgage sectors including buy-to-let, the self-employed and borrowers with adverse credit.

OSB Group offers me a mighty yield

Its shares are up 20% over 12 months, but have dipped 15% over the last three months. OSB’s a lot cheaper than Keller, trading at just 5.12 times trailing earnings. And the dividend doesn’t stand any comparison. OSB has a whopping trailing yield of 8.34%.

This isn’t unusual in the financial services sector right now, which has fallen out of favour during the last few turbulent years.

In another contrast to Keller, last month’s half-year results were poorly received by the market, despite statutory profit almost tripling to £241.3m. That number wasn’t as good as it first seems. OSB had booked one-off adverse movements the year before, which made it look better.

Crucially, the board cut net interest margins forecasts from 250 basis points to between 230 and 240 points. The mortgage market’s tough right now, as buyers await further base rate cuts and see what next month’s budget will bring. So it could be a bumpy few months for OSB.

That dirt cheap P/E and sky high yield really tempt me though. I’d like to buy both stocks today, but don’t have the cash. I’m plumping for Keller Group. I already have lots of exposure to FTSE financials. Infrastructure, not so much. Time to diversify. Now let’s hope the global economy springs into life, and the construction projects flow.

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I still think the stock offers value though. Currently, it looks very cheap.

US success

Keller specialises in preparing ground to be built on. And right now, it’s having a lot of success, particularly in the US.

Across America today, demand for Keller’s services is high. This is due to the fact that the country’s spending a lot of money on infrastructure, onshoring, semiconductor plants, and data centres.

Strong H1 results

This success was reflected in Keller’s recent results for the half-year ended 30 June. For the period, the company reported:

• Underlying profit growth of 69%
• Underlying return on capital employed of 28.4% – the highest level for 15 years
• Free cash flow before interest and tax growth of 229%
• A 19% increase in dividend per share

Additionally, the company raised its guidance for the full year, saying it expects group performance to be “materially ahead” of market expectations. It noted here that performance should be underpinned by its record order book of £1.6bn.

Keller achieved outstanding results in the first half of the year, setting new records across the Group, as we continued to sustain and build on the material step-up in operational and financial performance delivered in 2023.

CEO Michael Speakman

Low valuation

Since these results, City analysts have naturally been raising their earnings forecasts for Keller. We may see more increases in the weeks and months ahead.

However, right now, the consensus earnings per share forecast for 2024 is 183p. That means that at today’s share price of 1,610p, the forward-looking price-to-earnings (P/E) ratio here is just 8.8.

That’s a low valuation. For reference, the median P/E ratio across the FTSE 250’s currently 13.4. So Keller trades at a large discount to the index.

It’s worth pointing out that analysts have been raising their price targets for the stock recently. On 6 September, for example, analysts at Berenberg increased their target price from 1,750p to 1,900p. That’s around 18% above the current share price.

Nice dividend

Yet potential share price gains aren’t the only appeal of this stock. It also offers a pretty decent dividend. For 2023, the company paid out 45.2p per share in dividends. This year, it expects to increase its payout by 5%. That would take the distribution to 47.5p. At today’s share price, that translates to a yield of just under 3%.

Worth a look?

Now, it’s worth pointing out that Keller operates in a cyclical industry. And an industry downturn’s a risk that can’t be ignored. Another risk is some profit taking in the short term. After all, this stock’s done very well recently.

All things considered, I think this stock has appeal. I reckon it’s worth considering today, particularly for those looking to diversify away from technology into other areas of the market.

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I’m on the hunt for a FTSE 250 growth stock to fire up my portfolio, and Keller Group (LSE: KLR) immediately jumped out at me.

The Keller share price is on fire. It’s up 119.29% over one year and 154.99% over five. It jumped almost 15% over the last month, the third-best performer on the index. Bumper first-half profits helped.

So why don’t I own it? Or rather, why has it completely slipped my attention until now?

Can Keller keep growing at speed?

I’ve been focused on buying bargain FTSE 100 dividend stocks over the last year. Now I want to inject a bit of growth into my portfolio. Can Keller oblige?

In its own words, Keller is the world’s largest geotechnical specialist contractor, laying the foundations for construction in projects across the globe. Given that its market cap is just £1.19bn, it has plenty of room to grow. Provided it can scale up. With 9,500 employees and operations across five continents, Keller reckons it can.

It’s taken a long time to get to this point, having been founded way back in 1860. It was bought by GKN in 1974, but became Keller again after a 1990 management buyout, then listed on the LSE in 1994. It has expanded slowly but steadily by acquiring foundations specialists across Europe, the Americas, Asia and Australia.

It’s been quietly doing its thing for years but investors woke up to the opportunity on 6 August after it reported a 121% jump in first-half statutory pre-tax profits to £95.3m. Sales rose a less impressive 2% to £1.49bn, but that was mostly due to lower revenues at its Texas-based Suncoast subsidiary and NEOM project in Saudi Arabia.

Revenues are inevitably bumpy for firm involved in big projects, as old contracts expire and new ones begin. Keller’s return on equity looks pretty solid at 24.9% but as this chart shows, it can be bumpy. Obviously, the pandemic played a big part in this.

Chart by TradingView

Is this FTSE 250 stock good value?

The board now expects full-year performance will be “materially ahead” of current market expectations. It also lifted the dividend per share 19% to 16.6p. Keller has a trailing yield of 2.76%. Better still, it’s covered 3.5 times by earnings, and is forecast to hit 2.9% next year (covered 3.8 times).

Obviously, I’m coming to the party late. I can’t expect the share price to double again in the next 12 months. Expectations are high following the recent surge. There may be a bit of froth in the price today.

Progress also depends on the state of the global economy. A recession, particularly in the US, could squeeze infrastructure projects. Happily, Keller boasts a record £1.6bn order book.

With the stock valued at 10.48 times earnings, there does seem to be a safety net here. The price-to-sales ratio has soared lately, as this chart shows, but it’s still a relatively modest 0.4. That means I’m paying 40p for each £1 of sales it makes.

The shares are likely to prove a slow burner from here, but I’ll drill deeper into its accounts with the aim of buying Keller when I have the cash.

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Two picks I reckon investors should consider snapping up are Keller Group (LSE: KLR) and Impact Healthcare REIT (LSE: IHR).

Let me explain why!

Building for the future

Specialist ground engineering business Keller Group basically helps prepare the earth for buildings to go up. If you’re not familiar with construction, this is a vital endeavour in any building project.

Keller Group shares have had an excellent 12 months, up 69% in this period from 783p at this time last year, to current levels of 1,330p.

From a bullish view, Keller makes a lot of its money in the US. This could be key to its future earnings, and potential continued rewards as the US government looks to spend billions on infrastructure in the coming years. A recent infrastructure bill passed in the US could aid this, and Keller could capitalise.

At present, the shares offer a dividend yield of 3.5%. Although this isn’t the highest out there currently, I’m more interested in consistent payouts, as well as bright future prospects.

The final bullish point I’ll note is that the shares look good value for money, despite the recent share price ascent. They currently trade on a price-to-earnings ratio of just 10. However, if the shares continue to climb, this valuation could be out of reach soon.

From a bearish view, there are risks involved too. The big one for me is that any economic shocks could halt infrastructure spending, especially across the pond in the US. This could have a material impact on earnings, as well as any returns I’d hope to receive. The other issue is that of the ongoing battle with inflation, which risks tighter margins in the construction industry related to operating and raw material costs.

Impact Healthcare REIT

Set up as a real estate investment trust (REIT), Impact makes money from healthcare-related properties it rents out. These firms must return 90% of profits to shareholders, making them an attractive stock to buy for dividends.

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.

Unlike Keller shares, Impact shares are down 4% over a 12-month period, from 90p at this time last year, to current levels of 86p.

I believe this is due to economic turbulence, such as higher interest rates and inflation, causing problems in the commercial property sector. Continued issues across the macroeconomic picture are the biggest risk. Higher rates mean growth, earnings, and returns are harder to come by. Growth is harder due to costlier debt, which REITs use to fund growth aspirations.

On the other side of the coin, I like Impact for a couple of reasons. To start with, it possesses defensive traits as healthcare is a basic necessity, no matter the economic outlook. Plus, with the rising and ageing population in the UK, demand for healthcare is only set to rise, which could offer Impact the opportunity to grow earnings and investor rewards.

Furthermore, the fundamentals look good too. The shares look good value for money on a price-to-earnings ratio of just eight. Finally, a mammoth dividend yield of 8.8% is very attractive!

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