Here are five growth shares that have been flying under the radar:
Carnival
Shares in cruise operator Carnival (LSE: CCL) have had a strong run over the past year, having risen 44% this year. Lower fuel costs and higher onboard spending has helped margins to improve considerably.
With time having passed since the Costa Concordia tragedy, passenger numbers have been picking up again thanks to the company’s new marketing strategy. Carnival is also betting big in the Chinese cruise market. It already controls a market share of more than 50% there but, with a fast-growing middle class, there is much potential for further growth.
The COO expects the Chinese market will grow by more than 20% annually over the next few years, and analysts are just as optimistic, with expectations that underlying EPS will grow by 36% to 163.2 pence in 2015.
Wolseley
Bulding materials company Wolseley (LSE: WOS) has benefited from improving economic conditions in the UK. Although construction activity has picked up in the UK, they have not improved as much as they have done so in the US. This should mean that there is further growth potential growth for Wolseley.
Underlying EPS has grown by a compound average growth rate of 11.2% over the past three years, even though revenues have fallen 2% to £13.1 billion. Wolseley’s cost-efficiency drive has helped to improve margins, and analysts expect it will continue to do so. Underlying EPS is expected to grow by 15% this year to 226.6 pence; which gives its shares a forward P/E of 18.9. Although this may not seem very cheap, Wolseley should be able to continue to deliver double-digit earnings growth for at least another few years.
Interserve
Support services company Interserve (LSE: IRV) is benefiting from its sizeable contract winnings in 2014, which totalled £2.0 billion. This includes work on the Docklands Light Railway (DLR), Southampton NHS Trust and the Royal National Lifeboat Institution. With the likelihood of further private sector involvement in the provision of public services, the outlook for Interserve seems very bright.
Analysts expect underlying EPS will grow 7% this year, to 63.0 pence. Shares in Interserve trade at a very attractive forward P/E of 10.2, and its prospective dividend yield is 3.8%.
Senior
Senior (LSE: SNR), the specialist components manufacturer, is seeing its commercial aviation division benefit from buoyant demand for wide-bodied airplanes. Results for 2014 showed a 5.9% rise in revenues, accompanied by a 4% rise in underlying EPS to 19.84 pence. Analysts expect underlying EPS will grow by another 3% this year, which gives its shares a forward P/E of 13.7.
Rathbone Brothers
Rathbone Brothers (LSE: RAT), the UK provider of personal wealth management services, is seeing strong growth in funds under management (FUM). FUM grew 6.3% in the first quarter alone, having benefited from reasonable strong investment performance and sizeable net inflows from organic growth. In addition, recent acquisitions have increased the company’s scale and reach to private clients.
Analysts expect underlying EPS will grow 15% this year, to 117.5 pence; and this gives its shares a forward P/E of 18.5.
