3 cracking FTSE 250 bargains I'd buy now

Updated: 
Hastings Direct

While FTSE 100 shares are always in the news, the FTSE's smaller indices can be awash with bargains that are overlooked by big investors. Here are three that I like the look of right now

Brexit nonsense

When the UK voted for Brexit last June, lots of shares took a nosedive -- banking understandably, and housebuilding less so. Shares in Ibstock(LSE: IBST) lost 42% in the days immediately after the vote, so what does it do? It makes bricks and concrete -- like those are going to go out of fashion when we leave the EU?

The market regained some of its sense and Ibstock shares have recovered much of their loss, but at 195p they're still a little below their pre-referendum price. Analysts' forecasts have been upgraded over the past six months, with a strong buy consensus out there. We're looking at predictions of modest but steady EPS growth, which would drop the P/E to a low 10.3 by 2018 -- and the firm's progressive dividend policy would lift the yield to 4.6% by then.

Ibstock will deliver results on 7 March, and the firm's January update revealed a 5% rise in revenue (including an 18% boost in the US), with debt declining. New production facilities for both bricks and concrete products were opened during the year.

Looks like a solid bargain to me.

A cheap insurer

Hastings Group(LSE: HSTG) floated on the London Stock Exchange in October 2015. Little did investors know the carnage that was about to hit in the wake of the EU referendum, but Hastings's business in home and motor insurance should be pretty safe from Brexit shenanigans and the shares did not suffer. In fact, we've seen a 42% share price rise since flotation, to 230p, aided by the general recovery in the insurance sector over the last six months.

A Q3 update revealed a 16% year-on-year rise in live customer policies, with gross written premiums and revenue up 26%. The firm told us that it "is on track to either meet or beat the targets set out at the IPO".

If forecasts are accurate, we should be seeing earnings rises pushing the P/E multiple down to 11.4 in 2018, and Hastings' rapidly-rising dividend should reach a yield of 5.2% by then. Though price growth has already been impressive, I see Hastings as still good value as a long-term income share.

Full-year results should be with us on 2 March.

IT growth

My next choice is also new to the stock market, though Softcat(LSE: SCT) had been in business for about 20 years before flotation -- and in that time it has been growing its business nicely with revenue trebling in five years.

The company provides IT infrastructure and services to companies and to the public sector, so it's the kind of picks and shovels business that I like -- it should do well whoever is winning at the sharp end of the competitive market.

Last year saw a 15% rise in adjusted operating profit, with rising gross margins helping boost the firm's cash flow. And with its intention of returning spare cash to shareholders, Softcat paid a 14.2p special dividend on top of its regular 5.3p per share.

Regular dividend yields should stand at a little under 3% on a share price of 317p, and the P/E is expected to fall to 15 by July 2017. An attractive growth candidate, I think.

Do you want to be a millionaire?

Getting in when you see overlooked bargains can work wonders for your millionaire aspirations. To find out more, check out the Fool's 10 Steps To Making A Million In The Market report.

What you'll learn, more than anything, is that the secret to long-term financial success is to spend less than you earn, invest your savings in shares, and perhaps most importantly of all... keep a cool head when all around are losing theirs.

What's more, it won't cost you a single penny of your savings to get yourself a copy, so just click here now for your completely free report.

Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.