Discovering a FTSE 250 inventory within the cut price bin might be robust. The UK mid-cap index has climbed 15.9% increased to 21,114 factors within the final 12 months with over 170 firms within the index making positive factors.

That mentioned, there’s one a part of the financial system that I’ve had my eye on. The maritime trade has been within the information recently amid rising geopolitical tensions and better provide chain prices.

As soon as I noticed a crushed down FTSE 250 inventory in that trade, I needed to examine: the nice, the dangerous, and the ugly.

Trade I like

Clarkson (LSE: CKN) is an built-in maritime powerhouse. The corporate provides built-in companies overlaying ship broking, research, finance, digital instruments, port companies, and green-driven advisory companies. 

I’ve had my eye on maritime companies for some time now. There’s potential for progress with growing international commerce and an ongoing reliance on delivery for a big a part of that.

The working atmosphere has stabilised and freight prices have fallen. Moreover, the corporate is pushing into rising areas together with offshore wind, in addition to base and battery metals.

Robust financials

One factor that caught my eye was Clarkson’s interim 2024 outcomes. Revenues and underlying pre-tax revenue have been underneath stress within the six months to June, with the latter sliding 3% to £109.2m. That’s not dangerous contemplating a reasonably bumper yr was had in 2023.

Underlying earnings per share of 129.1p, alongside £178.4m of money and liquidity, noticed the board declare a 32p per share interim dividend. That represents a 7% improve from final yr and an unbelievable twenty second consecutive yr of dividend will increase for the FTSE 250 inventory.

With unchanged full-year steerage and a strong stability sheet, I believed I’d check out Clarkson’s valuation.

Valuation

The FTSE inventory has a price-to-earnings (P/E) ratio of 13.5 proper now. That appears to be a contact on a budget facet for me, notably given the traditionally robust dividend progress.

Throw in a 2.9% dividend yield for the revenue traders out amongst us and there’s a bit to love.

The catch

There’s no such factor as a free lunch in investing and Clarkson is not any exception.

One factor that stood out is a price-to-book (P/B) ratio of two.4 which is at all times price noting. Nonetheless, as it’s a companies supplier, I can look previous this primarily based on the character of its stability sheet and repair providing.

The FTSE 250 inventory is up practically 30% up to now 12 months and sitting at 3,685p regardless of a latest wobble. That was largely as a result of traders weren’t too impressed by the half-year outcomes.

I feel a giant a part of that will have been the bumper 2023 interval that year-on-year figures have been being assessed towards. A cyclical enterprise like Clarkson isn’t with out its dangers, however the progressive dividend coverage and ahead outlook have me kicking the tyres a bit extra.

The decision

Investing in a FTSE 250 inventory like Clarkson isn’t with out its challenges. Trying by the quick time period, I do see some long-term potential and diversification alternatives.

Whereas I don’t have the money accessible for the time being, I’ll be trying to make investments earlier than the tip of the yr if I can. Any additional share price declines in the direction of the three,000p mark would put it much more firmly within the purchase zone for me.