2 stocks that savvy growth hunters should consider

Royston Wild reveals two stocks with bright earnings potential.

| 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.

Science In Sport (LSE: SIS) moved 3% higher on Thursday, and within striking distance of February’s summit around 96p per share, following the release of perky trading numbers.

The protein powder play announced that sales jumped 28% in the six months to June, to £8.27m, with its e-commerce enjoying growth of 78% across all of its markets. The London business also reported growth in all of its retail channels in the period.

Chief executive Steven Moon commented that “we have had a strong start to the year in a difficult market, and have made very good progress, particularly when many of our competitors continue to face growth challenges.”

He celebrated the huge investment Science In Sport has made in international markets as well as in its online proposition, the success of which has been highlighted by today’s terrific results.

And Moon struck a confident tone looking ahead, noting that “we have good momentum and together with our healthy innovation pipeline, we expect to have a strong second half.”

Sprinting on

The City expects it to remain lossmaking for some time yet however, although the bottom line is expected to keep on improving as revenues steadily rise. Losses of 4p per share are predicted for 2017, narrowing from 6.2p last year. And further progress, to 2.1p, is estimated for 2018.

Sports nutrition is clearly big business, as underscored by a report released this week by Mintel which showed that more than a quarter of all Britons now take protein and energy supplements in a bid to acquire ‘the body beautiful.’

And Science In Sport is putting itself in the frame to lasso this surging demand through its huge investment drive. I reckon the fitness giant could be one to watch in the years ahead.

Build a fortune

Grafton Group (LSE: GFTU) is a share that the Square Mile believes should continue to deliver solid earnings growth.

While difficult trading conditions are expected to see profits slow from the double-digit increases of recent years, the FTSE 250 star is expected to keep firing with increases of 3% and 8% in 2017 and 2018 respectively.

As a consequence, Grafton deals on a forward P/E ratio of 14.9 times, roughly in line with the value yardstick of 15 times.

The Dublin firm saw revenues soar 6.2% at constant currencies, or 9% at actual rates, in the six months to June, it advised earlier this month. A strong performance and new branch openings at its Selco arm helping to lift profits in Britain 4% higher.

But Grafton has really put the pedal down on foreign shores. In Ireland, like-for-like turnover soared 10.6% in the first half, the company noting that “the recovery in the residential and commercial new build markets [had] gathered pace.” And in The Netherlands, like-for-like revenues jumped 38.1% thanks to a resilient Dutch economy and a healthy housing market.

The company is not without its share of risk, of course, given the prospect of a sharp cooldown in the UK economy. Indeed, chief executive Gavin Slark commented that “while we remain optimistic on the medium-term outlook for the UK, we are cautious about the shorter-term impact of current uncertainty and pressure on real incomes which may temper growth in spending on housing RMI.”

Still, I am confident Grafton’s impressive progress on the continent and robust market positions should keep earnings on an upward bent.

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 of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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

More on Investing Articles

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Here’s how someone could start investing in 2025 with just £1,000

Planning to start investing in 2025? This writer highlights two very different stocks that might be worth considering for a…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

I asked ChatGPT which UK stocks Warren Buffett might look to buy. It suggested these 5 names

ChatGPT has some ideas about FTSE 100 stocks Warren Buffett might have been buying. But Stephen Wright thinks a closer…

Read more »

Investing Articles

Up 14% today! Here’s one growth stock that Elon Musk likes

A UK growth stock has signed another contract with SpaceX. But does this mean it deserves a place in my…

Read more »

Investing Articles

I asked ChatGPT if the FTSE 100 would hit 10,000 this year. It’s feeling bullish!

The FTSE 100's flying and Harvey Jones is feeling bullish. His obvious next step was to ask a chatbot where…

Read more »

Investing Articles

Near 52-week lows, are these FTSE 100 stocks now unmissable bargains?

Two FTSE 100 titans just can't stop falling in value. Paul Summers looks at whether investors should see this as…

Read more »

Investing Articles

Bill Ackman just loaded up on this top stock for his FTSE 100-listed fund

The well-known hedge fund manager has announced a massive holding in this tech stock for his FTSE 100-listed investment trust.

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

Billionaire Bill Ackman has just made a huge bet on this S&P 500 growth stock

Bill Ackman just bought 30m shares in this well-known S&P 500 company. He believes it’s currently trading well below its…

Read more »

Investing Articles

40 and no pension? Here’s what £400 a month in a Stocks and Shares ISA could become

It's never too late to start investing for retirement. Here's how regular contributions to a Stocks and Shares ISA could…

Read more »