2 opportunities to make a million which won’t last forever

These two stocks could deliver high returns in the long run.

| 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.

Finding shares which could deliver high returns is never easy. However, what may be even more difficult is having the conviction to act upon what seems to be a worthwhile investment opportunity. Potential risks and the worry about losses can sometimes hold all investors back. But potential investment opportunities may not last indefinitely, as other investors may notice them and bid-up their prices.

With that in mind, here are two stocks that could deliver high growth. But the chance to buy them may not last forever.

Strong performance

Reporting on Tuesday was international recruitment company Robert Walters (LSE: RWA). Its share price gained over 9% following the update, since the company now expects profit before tax for the full year to 31 December to be materially ahead of current market expectations. The company’s performance in the first two months of the final quarter of the year was stronger than expected, and this has led to an upgrade in its profit guidance.

Prior to today’s update, the company was expected to report a rise in its bottom line of 21%. Now, that figure looks set to be significantly higher. Looking ahead to next year, the business is due to record a rise in earnings of 13%, which suggests that investor sentiment could be boosted yet further. And since the company trades on a price-to-earnings growth (PEG) ratio of just 1.1, now could be the perfect time to buy it.

Certainly, the outlook for the global economy may be uncertain as monetary policy begins to tighten. But with a wide margin of safety and a business model that appears to be highly successfully, the cyclical stock could generate high returns in future.

Improving performance

Also offering a bright growth outlook is diversified mining company Anglo American (LSE: AAL). The company has experienced a difficult recent past, with the period between 2012 and 2015 including three years of substantial losses. However, last year the company made good progress with its new strategy and was able to return to a black bottom line.

In the current year, Anglo American is expected to post a rise in its earnings of 42%. This could stimulate investor demand for the company’s shares, since it may provide evidence that the business has turned the corner with regard to its disappointing financial performance of the past. And with it trading on a PEG ratio of just 0.2, it appears to offer an exceptionally wide margin of safety at the present time.

Of course, the mining sector is a notoriously volatile industry. Commodity prices can fluctuate wildly over a short period of time. However, with a diverse business model that remains well spread over a range of different commodities even after numerous asset disposals, Anglo American appears to have a good strategy and could generate high share price gains in the long run.  

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 shares 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 »