The FTSE 250‘s up an impressive 9.3% over the last month. Yet some individual FTSE 250 stocks have done even better. One that’s caught my eye has rocketed 31% over the identical interval. Once I did some extra research, it doesn’t seem that is only a flash within the pan. Right here’s what I’m speaking about.

Sturdy positive factors

JD Wetherspoon is (LSE:JDW) the index hero. It’s one of many UK’s largest pub operators, operating over 900 of them in addition to a handful of accommodations. It makes cash from a high-volume, low-margin gross sales strategy. I believe everyone knows a budget and cheerful nature of Wetherspoons, but it surely actually is an efficient enterprise mannequin.

The fast pop within the inventory price can partly be attributed to an unexpectedly robust buying and selling replace. The group reported a 5.6% like-for-like gross sales improve within the 13 weeks to the top of April, up from 4.8% in its earlier half-year. On the identical time, administration pressed forward with its share-buyback programme, giving traders confidence that money movement isn’t an issue.

Chairman Tim Martin was fast to notice that “recent trading has been helped by favourable weather.” But even with this, the corporate “anticipates a reasonable outcome for the financial year”.

Trying forward

I believe the outlook’s very constructive for the corporate. It’s reliant on the UK economic system doing effectively, or at the very least individuals feeling extra optimistic about their private funds. Final week, the Financial institution of England reduce rates of interest once more. It appears to me like one other reduce will occur later this summer season. This could assist stimulate financial development as individuals have much less incentive to avoid wasting versus spend.

Additional, the inventory’s nonetheless down 6% over the previous 12 months. This isn’t a development inventory that’s taking pictures to overvalued ranges. The price-to-earnings ratio sits at 14.90, which is about common. So I’m not involved in regards to the danger of a pointy correction as traders all rush to financial institution earnings.

It has momentum proper on the key level of the 12 months heading into summer season. It’s poised to learn additional if summer season months carry strong pub-going.

Tax woes

One danger is the current hike on employers tax. The enterprise flags that this improve, together with wage pressures, will come to a further £1.2m per week. That’s a chunky expense for any firm to need to think about. I don’t see any reversals from the federal government on this technique, so the enterprise may need to look to boost costs with a view to absolutely offset this influence.

Even with this concern, I consider the agency’s effectively positioned to benefit from the remainder of this 12 months. We would have to attend till the subsequent buying and selling replace to get affirmation of this, however I believe it’s a powerful contender for any investor to think about for his or her portfolio proper now.