The Motley Fool

One bargain stock and one growth monster 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.

beer_pub-Marston's
Image: Public domain

Crest Nicholson Holdings (LSE: CRST) has given investors a bumpier ride than many housebuilders over the past 12 months. While Barratt Developments is up 24% over the past year, and both Bovis Homes Group and Persimmon are up around 37%, it has mustered growth of just 6%.

Best Crest

Investors aren’t too excited about today’s final results for the year to 31 October, with the stock down 0.5% at time of writing. The numbers were steady enough, with sales and joint ventures up 7% at £1.07bn, and pre-tax profits up 6% to £207m. Net cash fell from £77m to £33m.

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!

Volumes rose just 2% at 2,935 homes, but chief executive Stephen Stone sees faster growth ahead. “Our new business divisions are continuing to grow, driving increases in sales outlets and underpinning our ambitious sales target of £1.4bn in 2019.”

Today’s report is more promising than last October’s, when Crest Nicholson warned that profits may come in at the lower end of guidance. The new-build housing market continues to be robust, sustained by strong demand, a benign land market and government policies to improve access to housing.

Dividend delight

What really catches the eye is the forecast valuation of just 7.3 times earnings, coupled with a price/earnings to growth (PEG) ratio of 0.7. Crest Nicholson has been hit by the slowing market in London, but elsewhere house prices continue to rise steadily.

City analysts expect earnings per share (EPS) growth of 9% in 2018 and 15% in 2019. Throw in a forecast yield of 7% and the investment case looks even stronger, unless you anticipate a property crash. For the record, management hiked the dividend by 20% today to 33p, nicely covered two times. Here are two more hot stocks that could make your fortune.

Cheers!

While Crest Nicholson has underperformed its otherwise buoyant sector, pubs and hotels chain JD Wetherspoon (LSE: JDW) has done the opposite, outperforming a troubled corner of the economy, which has punished rivals such as Greene King. The company’s stock is up a fizzy 36% over one year and 157% over five. Although it isn’t the only monster growth stock on the high street.

It is up 3% after today’s Q2 trading statement showed like-for-like sales rose 6% and total sales 4.3%. “As a result of better-than-expected sales, year-to-date underlying profit before tax is slightly ahead of our expectations,” the update said. But there was a proviso that “similar outperformance in the second half will be more difficult to achieve” due to tough comparatives.

Tiger Tim

Chairman Tim Martin included a lengthy swipe at those who predicted soaring food prices following the Brexit referendum. When he finally got onto Wetherspoon he warned that: “We face significant costs in the second half in areas which include labour, business rates and the sugar tax. There will also be some uncertainty as to the effects on our business of the FIFA World Cup.”

The stock currently trades at a forecast 18.9 times earnings, reflecting recent strong growth. EPS are forecast to hover between -2% and +2% over the next three years, sharply down from 43% in 2017. Today’s yield of 0.9% offers little compensation. You could buy it today, or maybe wait for a better entry point.

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.