IQE, Horizonte (HZM) & Games Workshop (GAW): 3 stocks to buy

Highlights

• Investors must diversify their portfolio as investing in single stock or sector might prove detrimental in the long run.
• For diversification, investors can create their portfolio from different segments apart from the blue-chip index FTSE 100.

Investors looking to make good returns in the stock market must diversify their portfolio as investing in single stock or sector might prove detrimental in the long run. The UK stock market is very dynamic and provides ample opportunity for diversification of investment.

Investors looking for diversification can create their portfolio from different segments apart from the blue-chip index FTSE 100, like the mid-cap focused FTSE250 index, the FTSE AIM index, which has growth-oriented new companies. An appropriate level of diversification helps distribute the portfolio risk.

Here we will be discussing three FTSE stocks, Games Workshop Group Plc, Horizonte Minerals Plc and IQE Plc.

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IQE Plc (United Kingdom) (LON: IQE)

FTSE AIM-listed company manufactures and sells semiconductor products to other companies. It operates through key segments like wireless, photonics, and CMOS++, and has its business operation in the US and European countries.

The company reported steady growth in demand for its wireless wafers product. However, the sales volume of the wireless product was below the expectation due to weak end-market dynamics and a slow rate of 5G adoption in Asia and Western Markets. As a result of lower demand, the company expects full-year revenue for the period ending 31 December 2021 to be around £152 million, a drop of 8% year-on-year, while its adjusted EBITDA is expected to be around £18 million. The net debt of the company is expected to be less than £10 million.

IQE Plc shares ended at GBX 38.10 on 24 November 2021, with a market cap of £404.43 million. The company is part of the FTSE AIM UK 50 index.

Horizonte Minerals Plc (LON: HZM)

The company is into exploration and production nickel and cobalt like industrial base metals. It holds a 100% stake in Araguaia ferronickel project located in Northern Brazil.

The company has successfully raised £147.4 million by placing new ordinary shares at a price of 7p per share. The proceed will be used to build its Araguaia project in Brazil. The company plans to raise close to USD 633 million for the project, and the current fundraised through placing is part of the overall funds required for the Araguaia project. The company plans to raise remaining funds through convertible loan notes and debt facilities. The Araguaia project is a high-grade, low-cost asset with an estimated nickel producing capacity of 14,000 tonnes per year.

Horizonte Minerals Plc shares ended at GBX 7.00 with a market cap of £119.01 million on 24 November 2021. It is a part of the FTSE AIM All-share index.

Games Workshop Group Plc (LON: GAW)

Miniature figures and games designing is the major work segment of the company. These are further sold through its own retail shops and the online network. It has over 531 stores across 23 countries.

In its most recent trading update, the company said that its sales volume and growth was in line with the board expectation for the three months ended 29 August 2021. However, the company witnessed a rise in logistics cost due to a shortage of lorry drivers and pressure due to currency exchange rates during the period. Despite this concern, the company declared a 35p per share dividend to shareholders taking the total dividend for the current financial year to 100p per share. On 5 January 2022, the dividend will be paid to all eligible shareholders.

Games Workshop Group Plc’s last close was at GBX 9,025 on 24 November 2021, with a market cap of £2,963.1 million. It is a part of the FTSE 250 index.