Business & Investment

FTSE 250 companies Boohoo and IG make acquisition-is their stock worth buying?

Fast fashion retailer Boohoo (LSE: BOO) Launched the Debenhams brand and website.Meanwhile, online trading group IG Group Holdings (LSE: IGG) Improving Derivatives Offering with $ 1 Billion Acquisition of US Site Tastytrade..In light of this, do I buy any of these FTSE 250 Stocks as a long-term investment?

Boohoo acquires Debenhams

The· Boohoo stock price It is rising in response to the news. As a customer I’m glad I still have a choice as I’ve always loved shopping at Debenhams. But I think Boohoo stocks are currently expensive. The UK retail sector has been hit by Brexit first and then Covid-19 in recent years. Online sales are growing, but I think they’re already part of Boohoo’s stock price. It may take some time before we see sales growth comparable to the company’s price-earnings ratio of 60.

For investors focused on environmental, social and governance (ESG) investments, Boohoo needs to clean up that practice.The company faced Research Last year, a UK supplier’s factory fell into terrible working conditions.

I think Debenhams is perfect for Boohoo. Proper management may help strengthen your company in the future. However, Boohoo does not offer dividends and does not want to add Boohoo to the Stocks and Shares ISA at current market prices.

IG acquires Tastytrade

Tastytrade Is a fast-growing online brokerage firm that is popular among retail investors. It specializes in the US futures and options market, which has lived its own life over the past year. Tastytrade It offers a web-based option to trade individual stocks that UK IG clients have long requested.

IG has a great platform and infrastructure to help you scale. Tastytrade International presence. Options trading is more complicated than simply buying and selling stocks. With a little care, it’s similar to gambling. However, if done carefully, it can mitigate risk and offer sensational return potential.

Expensive acquisition

IG shareholders were less enthusiastic about the acquisition, and IG’s share price fell 10%. There are several reasons for this. The options market has grown tremendously over the past year. However, there is growing speculation that high-flying tech stocks are heading for a crash. If a retail investor is severely burned, it can lose its brilliance in growth areas and face tighter regulation.

Spread betting business IG Group is repeating history with suspicious acquisitions or aiming for stars. Acquired by IG FX Online 2008, around the time of the financial crisis. Perhaps it foresaw an exponentially growing bargain opportunity. Unfortunately, this did not work as planned, as increased regulatory challenges reduced profitability.

IG’s current price-earnings ratio is 12, with a dividend yield of 5% and earnings per share of 65p. We will complete the acquisition of IG by issuing $ 300 million in cash and 61 million shares of IG.This gives Tastytrade Approximately 18 times the 2020 revenue before interest, taxes, depreciation, and amortization (EBITDA).

Despite the high price tag Tastytrade I think this looks like an exciting acquisition, as it could be scrutinized by regulators. I want to buy IG stock as a long-term investment.

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Kirsteen does not have a position in any of the shares mentioned. The Motley Fool UK recommends the boohoo group. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by considering different insights, Better investors than us.



FTSE 250 companies Boohoo and IG make acquisition-is their stock worth buying?

https://www.fool.co.uk/investing/2021/01/25/ftse-250-firms-boohoo-and-ig-make-acquisitions-are-their-shares-worth-buying/ FTSE 250 companies Boohoo and IG make acquisition-is their stock worth buying?

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