Best UK shares: I reckon this FTSE 250 stock could be a millionaire-maker!

first_imgBest UK shares: I reckon this FTSE 250 stock could be a millionaire-maker! I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Simply click below to discover how you can take advantage of this. Enter Your Email Address Image source: Getty Images Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Stuart Blair owns shares in Airtel Africa. 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. “This Stock Could Be Like Buying Amazon in 1997”center_img Investing in UK shares can be very lucrative or, in some circumstances, can lead to large losses. As a result, it’s important to be discerning when picking stocks. Airtel Africa (LSE: AAF) is one stock I believe has significant potential. In fact, through dividend reinvestment over a number of years, I actually believe that it could be a millionaire-maker! Here’s why.Both a growth and income shareAirtel Africa is a provider of telecommunications and mobile money service within Africa. Africa is seen as a high-growth market, and as a market leader in 14 different African countries, Airtel Africa should be able to continue to grow its customer base. The number of customers already stands at over 100m, and with only 45% of the continent’s population owning a SIM, this should continue to grow. A rising consumer base has also seen rising profits. In fact, in the 2020 financial year, operating profits increased by over 20% to $901m.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…But as well as the potential for growth, this UK share is also a very good income stock. For example, this year, the firm is paying a dividend of 6 cents per share. This equates to a 10% yield. At the moment, this dividend also looks very safe due to free cash flow of $453m. With the dividend costing $226m, this means that there is still cash left over to reinvest into the business. Consequently, with strong prospects for growth, a dividend cut does not seem likely, and increases may be in store further down the line.Are there any problems?Of course, there are no perfect shares, and Airtel Africa is no exception. One of my major concerns is the fact that its EPS (earnings-per-share) has actually been decreasing in recent years. This is mainly because the firm has issued more shares in order to pay off debt. While paying off its large debt-pile has been necessary, this share dilution does put a strain on the share price. As a result, now that its debt situation is much healthier, I hope that the firm will not have to resort to issuing more shares in the near future. Instead, buying back shares would be the ideal situation for shareholders.Airtel Africa will also be affected by the current economic downturn. This is because currencies have been devalued across many of its markets, including the Nigerian naira, the Ugandan shilling, and the Zambian kwacha. This will place a burden on profits throughout the year.Is this UK share really a millionaire-maker?Despite these problems, I’m still highly optimistic about Airtel Africa. Evidently, there is significant room for profits to grow further, especially through the data and Airtel Money divisions. The dividend is also a major attraction, especially as it does look sustainable. As such, through reinvesting these dividend payments into the stock, I really do think that this UK share is a millionaire-maker! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Stuart Blair | Monday, 31st August, 2020 | More on: AAF Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Our 6 ‘Best Buys Now’ Shares See all posts by Stuart Blairlast_img read more

Finding the bright spots and creating more of them

first_imgIn their book, Switch: How to Change Things When Change is Hard, Chip and Dan Heath introduce readers to the story of Jerry Sternin. Sternin, who works for Save the Children, was sent to Vietnam in 1990 to open a new office and given six months to make a difference in the nutritional health of poor Vietnamese children. Sternin started by studying the height and weight of children in rural villages and comparing the growth rates of children from family unit to family unit. In this way, he was able to identify the children who were thriving and those who were not (Heath, 2010).The obvious assumption one might make about malnutrition is that the poorer a family might be, the unhealthier the children in that family would be. But, that wasn’t the case in every instance. In fact, the study showed that there were children in some poor families who were actually thriving.   These instances became known as “bright spots.” From these results, Jerry and his team decided it would take less time to study what was happening in these bright spot families than it would to study all the possible things going wrong in the families with children that were not thriving. By studying these families, they were able to quickly take their findings and duplicate them in the families where the children were not thriving.Whether one calls them bright spots, best practices or pro tips, bottom line, when changes are necessary, we need to focus on where we know things are going right and attempt to duplicate those results. Too often, when change is needed, we fixate on what is going wrong and try and fix it. Unfortunately, it’s not always clear why things are going wrong.   Let’s say that a credit union is struggling to grow loans. Is it because rates are too high, or is it because the decision process is broken? Is it a matter of a marketing issue, or is it because the closing process is cumbersome for the member? It’s just too difficult to accurately identify the issue when there are so many possibilities.However, by focusing on successes, even if it is at another credit union, leadership can more quickly determine where changes can be effective, faster. If a credit union is failing to increase indirect loan production, then studying those credit unions that are successfully growing market share may be the fastest route to improvement. But, it’s just as important to make sure that the success you’re referencing is actually the result of solid lending practices.   Just because a credit union is growing loans, doesn’t mean that it is booking the right kinds of loans. In the way that leaders should not fixate on their own untested problems, they also should not fixate on the success of others when that success has not been validated.Let’s go back to Sternin’s study. He found that poor families, where children were thriving, were not feeding the children any more food than the families with children that were not healthy. The difference was in the way they were feeding their children. The parents were paying more attention to ensure the children were, in fact, eating the food given to them, and feeding them the same amount of food per day, but dividing it into six meals rather than three. As a result, their bodies could better process the food into usable nourishment. Often, credit unions assume that they need to re-invent lending norms in order to achieve growth. As a result, many lower their prices to unprofitable levels; others take on more risk than they are prepared to manage.   But, the answer isn’t so much in the types of loans that are being booked or the price of those loans, as it is the way loans are acquired.Let’s not forget the role that Sternin played. He didn’t care more about those children than their own mothers and he certainly didn’t go in with all of the answers, but arriving in the region with fresh eyes and an open mind, he was able to discover important nuances that even the people with the most vested interests overlooked. It may be challenging for a credit union to acquire “best practice” knowledge on its own, especially when its leaders are focused on running the credit union.  And, often these best practices are achieved outside the reach of their available resources.CU Direct has created an Advisory Services group to provide consulting that is focused on best practices based on experience working with more than 1,000 credit unions. Our Advisory Services can analyze a credit union’s entire lending process and compare/contrast it with successful, tried and tested credit union practices, ensuring an improved process and a path to loan growth. Sometimes, it’s not possible to get where we want to go by ourselves. Credit unions are no different.Works CitedHeath, C. a. (2010). Switch: How to Change Things When Change is Hard. New York: Crown Publishing Group. 6SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Michael Cochrum Michael has worked in the consumer lending industry since 1989. In 1999, he joined the credit union industry, working for the Texas Credit Union League’s credit union. Mr. Cochrum … Web: Detailslast_img read more