2 discount growth stocks I’d buy right now

These two shares could offer growth at a very reasonable price.

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Weir employee looking through product (abstract image). Ming Shen, Director of Marketing for Weir TRIO.

Finding shares which offer growth at a reasonable price has become more challenging this year. The FTSE 100 has risen in recent months, and this has led to a number of shares having higher valuations. For investors seeking to buy shares, this means there may be narrower margins of safety on offer.

Of course, while this is generally the case, there are exceptions. Here are two stocks which could offer high growth at a low price and, as such, may be worth buying today.

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Improving guidance

Reporting on Monday was engineering specialist Weir Group (LSE: WEIR). The company stated in its trading update that performance in recent weeks in its upstream North American markets has been better than expected. This has led to higher volumes, stronger operating leverage and modest pricing recovery. The end result could be higher than expected profitability for the full year – assuming recent trends continue into the latter part of the year.

Clearly, this is excellent news for the company. It shows that while its end markets remain relatively fragile, they can offer growth potential over the long run. Investor sentiment has been improved by the news, with the company’s share price rising by almost 10% during the day of release.

Looking ahead, Weir Group is forecast to report a 44% rise in earnings this year. It is expected to follow this with growth of 28% next year. Despite this, it trades on a price-to-earnings growth (PEG) ratio of just 0.5, which suggests it could offer capital growth potential. Therefore, while its outlook may be uncertain and its forecasts could realistically be downgraded, it may offer significant upside potential.

Turnaround prospects

Although it may seem as though the world economy is performing well, there are industries and companies which are struggling. One example is power and rental solutions business Aggreko (LSE: AGK). It has reported four consecutive years of falling profitability, with a further decline in its bottom line forecast for the current year. This could hurt investor sentiment and send its share price lower in the short run.

However, there may also be a buying opportunity at the present time. Aggreko is expected to return to growth in the next financial year, with its earnings forecast to rise by 12%. This puts its shares on a PEG ratio of just 1.2, which suggests that now could be the right time to buy it for the long run.

Aggreko could also become a relatively enticing income play. It may only yield 3.2% at the present time, but its dividend is covered 2.1 times by profit. This suggests shareholder payouts could rise at a faster pace than profit over the medium term – without leaving the business in a more challenging financial position. Therefore, with a mix of growth, income and value potential, it could be a strong performer over the long run.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended Weir. 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.

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