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2 secret growth stocks I’d stash in my ISA

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The steady rise of e-commerce leaves plenty of scope for MacFarlane Group (LSE: MACF) to prove a hot growth share in the years ahead.

The packaging giant has an extremely good track history of earnings expansion, the bottom line having swelled by double-digit percentages in four of the past five years.

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City analysts believe this trend will continue with a 33% advance in 2018. And this reading also makes MacFarlane sterling value for money — as well as rocking a forward P/E ratio of 12.4 times, investors can also enjoy a sub-1 PEG reading of 0.4.

A more modest 5% rise is chalked in for next year, but I see scope for this reading to be upgraded and for profits to continue rising at a sprightly pace thereafter.

Box up a beauty

You may not have heard of it but you’ve more than likely handled one of Macfarlane’s products as you’ve excitedly (or not) unwrapped something you’ve ordered online.

The company is a major distributor of a broad range of protective packaging products and, thanks in large part to a number of acquisitions made in recent times, turnover at its Packaging Distribution arm — which is responsible for about nine-tenths of group revenues — jumped 10% in 2017 to £171.8m. Organic sales were responsible for 3% of the rise, a not-too-shoddy result either.

MacFarlane has both the appetite and the financial means to keep the acquisitions coming thick and fast to keep sales moving through the roof. But this is not the whole story. Indeed, through its so-called Innovation Lab it is able to carve out major contract wins by engaging with customers to cut costs and to create bespoke packaging solutions.

As MacFarlane expands its nationwide footprint and product ranges, I am convinced the business should continue to prove a lucrative growth bet long into the future.

Globe trotter

Robert Walters (LSE: RWA) is another little-known growth share I reckon should provide brilliant returns in the years ahead.

Like MacFarlane, the recruitment giant has a long record of bottom line rises and City analysts are expecting this trend to continue with increases of 5% in 2018 and 6% next year. And like the packaging powerhouse, current forecasts also make Robert Walters a decent value pick, the firm sporting a prospective P/E multiple of just 14.7 times.

This is a particular bargain considering the rate at which revenues are growing. The London business noted in January that net fee income jumped 22% at constant currencies during October-December, to £90.5m, the fastest rate of growth since the turn of the decade.

While there is some concern over the UK economy going forwards, Robert Walters’ performance in its home market continues to be impressive and net fee income rose 13% in the last quarter.

But even if it does begin to lose traction at home, share pickers can take confidence from its pounding progress overseas. With sales growing 28% in Europe and 12% in Asia, its international divisions now account for 70% of total net fee income. And measures to turbocharge its headcount across the globe bode well for further growth in its far-flung territories.

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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 us better investors.

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