Ryanair Holdings plc isn’t the only two-bagger expected to deliver blockbuster growth

This stock could offer high investment potential alongside Ryanair Holdings plc (LON: RYA).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The last couple of months have been incredibly challenging for Ryanair (LSE: RYA). It has been heavily criticised for cancelling flights, as well as the way it has treated affected customers. It is therefore unsurprising that its share price has fallen 6% in the last month. However, it is still up 274% over the last five years and is due to deliver high earnings growth over the next couple of years.

Of course, it is not the only stock with such a strong track record and bright growth outlook. One company reporting on Tuesday also appears to offer such characteristics. Could either company be worth buying right now? Or are their outlooks fully reflected in their valuations?

Growth potential

While the collapse of Monarch on Monday showed that trading conditions in the travel industry remain challenging, Ryanair has a positive growth outlook. The company is forecast to record a rise in its bottom line of 17% in the current year, followed by further growth of 13% next year. Despite such strong momentum, the stock has a price-to-earnings growth (PEG) ratio of just 0.9, which suggests that further upside could be ahead.

The reputation of the business is unlikely to have been enhanced by recent events. Customers may now think twice before booking with Ryanair due to the negative press coverage of recent weeks. However, the reality is that customers are unlikely to look elsewhere en masse over the long run due to the competitive prices which the company offers, as well as its strong position within the budget short-haul marketplace.

As such, while the near term may be uncertain for the company’s investors, the long term outlook for Ryanair appears to be positive.

Upbeat outlook

Also posting high share price returns has been Revolution Bars (LSE: RBG). The bar operator has gained 100% in the last three months due in part to a 203p cash offer being made for the business by Stonegate Pub Company. It has been recommended by the Board of Revolution Bars, and investors will vote on the potential deal on 17 October.

However, there is the potential for another bid from Deltic. It initially proposed a merger, which was rejected. It has until 10 October to make an offer and is performing due diligence at the present time. With the potential for a further bid in the short run, there could be further share price growth ahead.

As well as this, Revolution Bars released an upbeat set of results for the full year on Tuesday. They showed that revenue increased by 9.2% versus the prior year, with like-for-like sales up 1.5%. Gross margin was 82 basis points higher, while adjusted profit before tax increased to £9.3m from £7.4m last year. Therefore, even if there are no further bids and the current bid is rejected, the company’s improving performance suggests it could be worth buying for the long term.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens has no position in any company mentioned. 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.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »