3 last-minute growth greats for your ISA

Royston Wild looks at three growth stars that should be on the radar of all savvy ISA investors.

| 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.

The success of CRH’s (LSE: CRH) bold acquisition strategy has enabled the firm to deliver double-digit earnings growth for some time now.

And naturally I am convinced the construction play’s insatiable appetite in this area should keep powering the bottom line — CRH completed eight takeovers during last year alone.

CRH saw total revenues motoring 15% higher during 2016, to €27.1bn, a result that propelled profit before tax 69% higher to €1.7bn. The company saw margins and revenues rising in each of its divisions, witnessing strong momentum across Europe and the Americas as well as a positive performance from its recently-created Asian division.

And promisingly, CRH expects conditions to remain robust in 2017, particularly as US construction activity improves.

The City expects earnings to blast 24% higher in 2017, and by an additional 15% next year. And these forecasts result in very-reasonable P/E ratios of 15.3 times and 13.3 times respectively.

A pretty picture

For those seeking reliable earnings growth in the face of Brexit pressures on the population’s collective wallet, I reckon Cineworld (LSE: CINE) is a stock you cannot afford to overlook.

Cineworld group revenues leapt to £797.8m in 2016, up 13% year-on-year, and they drove adjusted pre-tax profits 12.5% higher to £111.4m.

The chain continues to be boosted by Hollywood’s conveyor belt of blockbusters, and a stream of new releases scheduled through the next few years from the likes of Marvel and Disney promises to keep film lovers flocking through its doors.

Furthermore, the relatively-inexpensive nature of Cineworld’s operations means the business should be able to keep generating solid sales growth regardless of broader economic woes.

The number crunchers expect Cineworld to generate earnings growth of 7% and 8% in 2017 and 2018 alone, figures that create P/E ratios of 16.7 times and 15.5 times.

I reckon this is great value given the screen star’s strong defensive qualities, not to mention the great earnings potential thrown out by ongoing site expansion across the UK, Central and Eastern Europe and Israel.

Book beauty

The huge potential of WH Smith’s (LSE: SMWH) rail and airport outlets convinces me that the stock remains a great growth selection for ISA investors.

A combination of rising passenger numbers and a steady stream of store openings in the UK and abroad helped drive underlying sales at its Travel division up 5% during the 21 weeks to January 21. As a result of ongoing strength here, chief executive Stephen Clarke commented that “we expect group profit growth for the year to be slightly ahead of plan.”

Square Mile analysts expect the stationer to keep its long-running growth story rolling with advances of 6% in each of the years to August 2017 and 2018. Consequently WH Smith’s P/E multiple drops to 16 times next year from 17.2 times in the present period. I reckon this is great value given the company’s improving sales outlook.

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.

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended WH Smith. 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

Mixed-race female couple enjoying themselves on a walk
Investing Articles

A once-in-a-decade chance to get rich buying growth stocks?

We haven't seen a good spell for growth stocks for quite a few years now. But I reckon the signs…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

The FTSE 100 is full of bargains! Here’s 1 stock I’m eyeing up

A weak economic outlook has hurt the FTSE 100. This Fool explains why she likes the look of this consumer…

Read more »

Investing Articles

2 no-brainer beginner FTSE 100 stocks to buy for my portfolio

Getting started with investing can be daunting. Here are two stocks for beginners to consider buying to build their first…

Read more »

Young black man looking at phone while on the London Overground
Investing Articles

2 recession-resistant UK shares investors should consider buying

Our writer details two UK shares she feels could withstand some of the ill-effects of the current malaise to provide…

Read more »

Tanker coming in to dock in calm waters and a clear sunset
Investing Articles

Glencore share price drops on results. Time to buy?

The Glencore share price wobbled a bit after a weak set of 2023 results. Here's why I have the stock…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Big trouble in China sinks HSBC shares. Should I invest after record FY results?

HSBC shares have slumped following a disappointing end to 2023 for the FTSE stock. Royston Wild explains why this may…

Read more »

View of Tower Bridge in Autumn
Investing Articles

3 dirt cheap FTSE 100 shares to snap up today?

The FTSE 100 is rallying, but many shares still look super cheap on fundamentals. Is our writer buying these three…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

FTSE 100 earnings: what can we expect from Rolls-Royce in 2024?

The Rolls-Royce share price tripled in 2023. Roland Head wonders whether this FTSE 100 stock could continue that impressive trajectory…

Read more »