2 growth bargains that could make you a million

Royston Wild looks at two growth shares that could make you rich.

| 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.

News of solid first-half trading  numbers has firmed up my already-bullish take on ULS Technology (LSE: ULS) in Tuesday business.

In a spritely announcement ULS declared that, despite a more recent slowdown in the housing market, revenues boomed 56% during the six months to September, to £15.3m, and organic revenues jumped 22% in the period.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

As a consequence, underlying operating profit at the firm grew 44% year-on-year, to £2.81m, and this encouraged a 5% hike in the interim dividend to 3.48p per share.

Adding colour to the results chief executive Ben Thompson commented: “This has been a strong first half for ULS. Once again, we have increased our market share and financial results against the backdrop of a housing market that has become quiet, relative to longer-term averages.”

Building a legacy

News that ULS — which provides online business platforms used across the conveyancing and financial intermediary market — is defying current difficulties in the homes market should soothe any jitters that investors may have had.

The company is proving adept at beating these difficulties by claiming business from its competitors, and it has doubled the number of lenders it carries out conveyancing work for (it now works for eight lenders versus four just a couple of years ago).

And there is still plenty of business for ULS to win (it estimates that it commands just 5% of the total conveyancing market).

The impressive performance of niche operator CAL, which ULS snapped up late last year, is a particular cause for celebration. The unit has “built up some good momentum with estate agents,” it said, with CLS “continuing to build up [its] portfolio of smaller mortgage brokers… with highly competitive technology, pricing and good service.” The number of completions here jumped 44% year-on-year in the first half to more than 10,000.

ULS has long proved a dependable growth generator, and City analysts expect the tech giant to keep providing plenty of jam to investors. In the year to March 2018 a 44% earnings leap is currently predicted, and a 6% advance is forecast for fiscal 2019.

And current projections make ULS a bit of a bargain. While a forward P/E ratio of 22.9 times isn’t much to shout about, a corresponding PEG of 0.5 comes in comfortably below the bargain watermark of 1 or below.

Supply shortage

Those seeking great-value growth heroes also need to take a look at Redrow (LSE: RDW) today.

Sure, homebuyer demand may be slowing at the moment as wider economic pressures and increased uncertainty rises. But put simply, there are still not enough new-build houses to go around, and particularly as these same troubles are encouraging existing homeowners to keep their properties off the market.

Like ULS, Redrow also has a strong record of earnings generation (the bottom line has swelled at a compound annual growth rate of 35.1% during the past five years). And City brokers are expecting further excellent growth, a rise of 11% in the year to June 2018 currently being anticipated.

With Redrow subsequently sporting a forward P/E ratio of 7.5 times and a PEG reading of 0.7, I think it is difficult to overlook the construction giant today.

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

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Redrow. 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.

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 considered, so you should consider taking independent financial advice.

More on Investing Articles

Portrait of construction engineers working on building site together
Investing Articles

Is this FTSE 100 stock the best housebuilder to invest in?

One FTSE 100 housebuilding stock has outperformed all of its industry peers by a big margin this year. Should I…

Read more »

pensive bearded business man sitting on chair looking out of the window
Investing Articles

2 cheap dividend growth stocks I’d buy as the economy sinks

I'm searching for the best bargains to buy following recent market volatility. Here are two top dividend growth stocks I…

Read more »

estate agent welcoming a couple to house viewing
Investing Articles

Here’s 1 FTSE stock primed to benefit from the current housing market!

With the current housing market as it is, Jabran Khan explores a related FTSE stock that could provide stable and…

Read more »

Portrait of construction engineers working on building site together
Investing Articles

Here’s why this AIM-listed stock could be one of the best shares to buy!

This Fool is looking for the best shares to buy. Despite macroeconomic issues, this stock could be a great long-term…

Read more »

Elderly father and adult son work in the garden
Investing Articles

This penny stock could be set to soar! Should I buy shares?

This Fool looks closely at a penny stock operating in an exciting growth market that could see its shares rise…

Read more »

Illustration of bull and bear
Investing Articles

The next stock market recovery looks imminent

As the stock market bear gives way to the bull, some stocks are already turning up and I'm ready to…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

2 dividend shares to protect me from soaring inflation

Dividend shares can be an excellent way to keep up with inflation. Our writer explores several options to protect his…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

Is it time to buy Unilever stock?

Unilever stock has underperformed in the last five years. But with its portfolio of powerful brands, should I buy now…

Read more »