3 of the best international growth stocks: BP plc, Alliance Pharma plc and Next Fifteen Communications Group plc

These three companies have superb and highly-diversified growth opportunities: BP plc (LON: BP), Alliance Pharma plc (LON: APH) and Next Fifteen Communications Group plc (LON: NFC).

| 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.

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.

After all of the coverage of the EU referendum, one thing has become abundantly clear to many investors. Investing in geographically diversified companies is a must. Certainly, the world is becoming more globalised and what happens in one region can easily impact the macroeconomic outlook of another region on the other side of the world. However, diversification between different economies can still reduce risk and still provide excellent reward opportunities.

One company that offers such potential is BP (LSE: BP). Its asset base is geographically well-diversified and so it offers a relatively low geographical risk. Of course, on the flip side BP is highly dependent on the price of oil and so is risky from that perspective. But with its shares offering a wide margin of safety and very promising growth forecasts, now seems to be an excellent time to buy a slice of the business for the long term.

For example, following the oil price rise from its 2016 lows to around $50 per barrel, BP’s anticipated profitability has risen significantly for the 2017 financial year. It’s due to increase its bottom line by 115% as the effects of rising oil price and greater efficiencies are expected to take hold. And with there being scope for further improvements in both of these areas, BP’s price-to-earnings growth (PEG) ratio of 0.1 indicates that it’s a top-notch growth play trading on a low valuation.

Non-UK growth

Also offering a geographically well-diversified growth outlook is Alliance Pharma (LSE: APH). Its exposure to international markets was boosted by the recent acquisition of the healthcare products business from Sinclair Pharma. Crucially, this increases Alliance Pharma’s exposure to non-UK markets, with over 50% of its business now being conducted outside of the UK.

Clearly, Alliance Pharma has an excellent track record of making the right acquisitions, both in terms of the licenses it acquires and the price it pays for them. The healthcare products transaction appears to be a logical one and with Alliance Pharma forecast to increase its bottom line by 8% this year and by a further 9% next year, its outlook is very positive. Its shares currently trade on a PEG ratio of just 1.2, which indicates that now is a great time to buy them for the long term.

Low geographic risk

Meanwhile, Next Fifteen (LSE: NFC) also offers an excellent international growth profile. The advertising and PR specialist operates across the globe and has a particular focus on hi-tech opportunities in the US. This provides it with relatively low geographic risk and with the company having made multiple acquisitions, it has developed a portfolio of 17 different businesses that again help to de-risk the opportunity on offer to investors.

With Next Fifteen expected to increase its bottom line by 9% this year and by a further 10% next year, it offers above average growth prospects. And due to Next Fifteen having a PEG ratio of 1.2, it does so at what is a relatively appealing valuation. Therefore, with a diverse geographical exposure and a proven acquisition model, Next Fifteen appears to be a star buy 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 owns shares of Alliance Pharma, BP, and Next Fifteen Communications. The Motley Fool UK has recommended BP. 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

Empty Stocks and Shares ISA? I’d snap up these 3 stocks to start with!

Sumayya Mansoor explains how she would start to build wealth from scratch with an empty Stocks and Shares ISA and…

Read more »

Concept of two young professional men looking at a screen in a technological data centre
Investing Articles

7.7% yield and going cheap! Why is this unknown FTSE 250 stock flying?

It's no household name, but there's one FTSE 250 stock with a high dividend yield and booming profits that looks…

Read more »

Photo of a man going through financial problems
Investing Articles

I’d stop staring at the Nvidia share price and buy this FTSE 100 stock instead

This writer reckons there is a smarter way to invest in Nvidia today without taking on stock-specific risk. Here is…

Read more »

Young lady working from home office during coronavirus pandemic.
Top Stocks

5 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Young Asian man drinking coffee at home and looking at his phone
Dividend Shares

These 3 FTSE 250 stocks offer me the highest dividend yields, but should I buy?

Jon Smith considers FTSE 250 shares with a very high yield, but questions whether the income is going to be…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Is FTSE 100 takeover target DS Smith a great buy?

A mega-merger between FTSE 100 giants DS Smith and Mondi has the City abuzz. But is there any value in…

Read more »

Young Black man sat in front of laptop while wearing headphones
Investing Articles

The WPP share price dips as profits fall. Here’s why it could be a top dividend buy

I'm starting to think the WPP share price undervalues the stock, especially if the long-term dividend outlook comes good.

Read more »

Black father and two young daughters dancing at home
Investing Articles

A £3K investment buys me 632 shares in 2 stocks for a second income!

This Fool explains how a second income is possible through dividend-paying stocks and details two picks that could help her.

Read more »