The Motley Fool

2 red hot growth stocks I would buy today

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.

The following two UK stocks have been on fire, up a flaming hot 145% and 95% over the last five years. Both have reported results this week so can they carry on sizzling?

Segro grows

Investment trust Segro (LSE: SGRO) is a REIT specialising in logistics properties such as warehouses and distribution centres, with interests in the UK, France, Germany, Italy and Poland. Today it published its trading update for 1 July to 18 October, with CEO David Sleath hailing continued positive momentum, which has driven increased rental income across existing and new properties.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Segro completed new big box distribution warehouses for Yoox Net-A-Porter and Amazon in Italy, and a new urban parcel distribution warehouse for Fedex/TNT in Paris, as e-commerce continued to drive the business. Sleath said: “Investor appetite for prime warehouse assets remains strong, attracted by the structural drivers of occupier demand, limited supply and the prospect of rental growth particularly in the UK and in urban warehousing in Continental Europe.”

Inside the box

These trends in occupier and investor demand should support performance throughout 2017 and 2018, Sleath said. If today’s market response was subdued, that is because the investment community already knows the Segro story. It is booming but expensive, now trading at 28 times earnings.

However, this £5.4bn trust has been expensive for some time, and more than justified that valuation. It also yields a steady 2.97%. Strong lettings and development completions in the third quarter have helped shrink the group’s vacancy rate from 5.5% to 4.1% since 30 June.

To the bone

Management has also been concentrating on paying down debt, reducing annual interest costs by £10m through refinancing. City forecasters predict strong revenue growth, rising from a forecast £300m in 2017 to £351m in 2018, with earnings per share up 10% in 2018. By then, the yield is expected to have increased to 3.2%.

Wealth manager Rathbone Brothers (LSE: RAT) has also been in the money lately, its share price up 44% over the year, and 95% over five years. Financial advisory firms like this one are often seen as a geared play on healthy stock markets, and it has been a success on that score. 

High value

Yesterday it published its trading update for the three months ended 30 September to an upbeat response, although investors are also wary with the stock now trading at just over 20 times earnings. Highlights included a solid 2.5% rise in total funds to £37.5bn, against an increase of 0.8% in the FTSE 100 Index, and a more eye-catching 7% year-on-year rise in underlying net operating income to £70.5m. 

Rathbone now has £5bn under management in unit trusts, up 8.7% since June. Net inflows for the quarter were a record £342m, up from £170m a year ago. Net operating income of £8m for the quarter was up 19.4% on a year earlier.

Market men

Performance has been boosted by a steady rise in the FTSE 100, which ended the quarter at 7,373, up 6.9% from 6,899 one year earlier. Chief executive Philip Howell said investment markets remained relatively benign over the period, but of course, that may not continue.

City analysts are positive, forecasting earnings per share (EPS) growth of 5% this year, then 10% in 2018. The stock also offers a solid if unspectacular yield of 2.2%. Should you pay that valuation? The answer depends on where you think stock markets might go next. Rathbone looks pricey, but a correction could quickly change that.

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.

Click here to see how you can get a copy of this report for yourself today

Harvey Jones 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 us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.