5 Great Growth Opportunities: Gulf Marine Services PLC, Stagecoach Group plc, Chime Communications plc, Investec plc & Consort Medical plc

Are Gulf Marine Services PLC (LON: GMS), Stagecoach Group plc (LON: SGC), Chime Communications plc (LON: CHW), Investec plc (LON: INVP) and Consort Medical plc (LON: CSRT) set to soar?

| 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.

When the lower FTSE indices are rising — the FTSE 250 and FTSE Small Cap are both soundly beating the FTSE 100 right now — it can be time to look for smaller growth opportunities. I’ve been searching for low-PEG stocks (with low P/E ratios compared to their EPS growth forecasts) and I’ve found five that look good, all of which have modest net debt or even net cash:

Gulf Marine

I’ll start with Gulf Marine Services (LSE: GMS), a provider of barges to the offshore oil industry, which only has a short track record as a quoted company — and not a great one, as the price slumped in 2014. But with the shares trading at 119p today they’re on a P/E of only 6.3 based on 2015 forecasts, dropping to 5 for 2016. There’s a drop in EPS expected this year, but a predicted 25% rise in 2016 would give the stock a PEG of only 0.2 — and growth investors typically consider 0.7 or less to be worth a closer look.

Stagecoach

Next up is transport firm Stagecoach (LSE: SGC), whose business is expected to enjoy a 20% growth in EPS in 2016 after a flat year to April 2015, and that would drop its PEG to 0.6. On top of that, there are reasonable and well-covered dividend yields of around 3% expected on the 372p shares, so there should be some income to bolster its growth potential. With a P/E of 12 for 2016, dropping to 11 on 2017 forecasts, Stagecoach looks attractive.

Chime

Chime Communications (LSE: CHW) provides PR and marketing consultancy services, and the City is expecting great things from it. After chief executive Christopher Satterthwaite told us that “2014 was a year of good growth and saw the development of CSM as a global player in the sport and entertainment marketing businesses“, there’s a massive 170% boost in EPS expected this year, with a more modest but still appealing 15% extra for 2016. That gives us PEG ratios for the two years of 0.1 and 0.6 with the shares at 288p, and that’s on top of dividend yields exceeding 3%.

Investec

Investec (LSE: INVP) shares are up 20% over the past 12 months to 610p, but two more years of forecast EPS growth giving us a 2016 PEG of only 0.6 suggests there’s plenty more to come — and an improving financial environment should be a great help to investment companies like Investec. Forecast P/E multiples should also drop from 12.7 for 2016 to just 11.2 in 2017 if forecasts come good, and we’re even looking at dividend yields approaching 5% by 2017!

Consort

Then there’s Consort Medical (LSE: CSRT), whose shares have nearly trebled in five years to 920p. Forecasts for the firm that develops drug delivery systems suggest that’s not the end of it, with double-digit earnings on the cards for the next two years. That would give us a PEG of 0.7, and with CEO Jon Glenn speaking of “important new development contract wins and meaningful progress with […] development and innovation pipelines” at results time, Consort could carry on delivering for years to come.

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.

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

More on Investing Articles

Investing Articles

Here’s how investing £250 a month could bag me over £10K in passive income annually

This Fool breaks down how she would go about building a passive income stream worth over £10,000 annually to enjoy…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

I’d snap this FTSE 250 stock up in a heartbeat for juicy returns and growth!

Sumayya Mansoor explains why this FTSE 250 property stock is firmly on her radar as she looks to buy stocks…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

1 dirt-cheap FTSE 100 stock investors should consider buying in June

The FTSE 100 is littered with bargains, according to our writer. She explains why investors should be taking a closer…

Read more »

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

The Legal & General share price has gone nowhere. Why?

The Legal & General share price has performed much worse than the the FTSE 100 over the past five years.…

Read more »

Investing Articles

Where will the BT share price go in the next 12 months? Here’s what the experts say

The BT share price has been sliding for years. But after the latest set of results, it looks like the…

Read more »

Investing Articles

Are National Grid shares now a brilliant bargain?

National Grid shares look exceptionally cheap following last week's selloff. Is now the time to buy the FTSE 100 firm…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Up more than 15%! — this small-cap company is delivering phenomenal dividend growth

There’s more good news in this company’s interim report and it may be shaping up as a decent dividend growth…

Read more »

Electric cars charging at a charging station
Investing Articles

Big news for Tesla stock investors!

Tesla has just quietly dropped a key target it set for itself just a few years ago. What does this…

Read more »