Investment company abrdnâs Interactive Investor (II) has compiled a list of the top five performing UK shares from the FTSE All Share index in February.
And one principle followed many investors is that momentum in business operations and stock prices can continue for a long time. These stocks went up last month, but will they continue to outperform? Hereâs what I think.
Takeover talks
The biggest riser last month was Hyve, up by 40.5%. The company earns its living organising international exhibitions and conferences.
On 21 February, the directors announced a preliminary and conditional takeover offer from Providence Equity LLP proposing 105p per share. And as I write, the shares are just above 103p.
Iâm not interested in playing that remaining 2p per share because of the risk of the proposed deal falling through. So, for me, Hyve is an âavoidâ right now.
But II reckons global consulting and engineering company John Wood Group went up by 37.9%. And the company revealed on 22 February it has received three unsolicited, preliminary and conditional proposals to buy the business. And the most recent proposed a cash offer of 230p per share.
The stockâs near 2017p today. But as with Hyve, Iâm not interested because of the downside risk if all the interest comes to nothing. So, for me, John Wood is another âavoidâ.
Strong business recovery
The third highest climber in February was Rolls-Royce Holdings, the UK engineering company and aero engine manufacturer. The stock shot up by 37.1%.
On the 23rd of last month, the company issued a robust set of full-year results and an enthusiastic outlook statement. And that was just what the share price needed. Meanwhile, City analysts have pencilled in an uplift in earnings of just above 50% for 2024. And set against that expectation, the forward-looking earnings multiple is just below 23.
Thatâs not a cheap valuation, but Rolls-Royce has recovered its mojo. So Iâd put the stock on watch and look out for a good-value entry point.
The fourth best-performing stock was Oxford Biomedica, up 29.1%. And this oneâs a serially speculative integrated cell and gene therapy company with zero profits.
The stock made steady progress through the month on little news. But on 20 February, the company announced its new chief executive, Dr Frank Mathias, due to start on 27 March. But this oneâs not for widows and orphans because profits are nowhere in sight. However, itâs okay for some fun money for those so inclined. Iâd put it on watch for the time being.
Fast growth
Meanwhile, at number five, Darktrace made steady progress to rise by 25.6%. It trades as an autonomous cyber security artificial intelligence (AI) company. And it hit first profits in the trading year to June 2022 with a rapid escalation expected in the current year.
Februaryâs news flow contained a couple of product release announcements. And todayâs half-year report and outlook statement is robust. Meanwhile, City analysts expect earnings to rise by around 40% in the trading year to June 2024.
But with the share price near 268p today, the forward-looking earnings multiple is sitting near 48. So fast growth looks baked-in to the valuation. And for that reason, Iâd put the stock on watch for the time being while looking for a better-value entry point.
The post The 5 best-performing UK shares in February 2023 appeared first on The Motley Fool UK.
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More reading
- Should I buy abrdn shares just for the 6.3% dividend?
- With the share price above £1.50, is it time to offload Rolls-Royce stock?
- The Legal & General dividend has just grown! Iâd aim to double my money buying today
- This FTSE 250 stock has risen 40% over the past 6 months. Should I buy in now?
- Is the Lloyds share price a bargain?
Kevin Godbold 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.
