£1,000 to invest? I’d buy this FTSE 100 thrashing growth hero inside an ISA

Harvey Jones says these two FTSE 100 (INDEXFTSE:UKX) growth stocks merit their place in a well-rounded ISA portfolio.

| 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.

If you’re looking to top up your Stocks and Shares ISA, there are plenty of FTSE 100 companies offering high yields at a bargain price. Tread carefully, though, because many may have seen their share price fall due to poor performance.

That’s not a problem with these two stock picks, both of which have posted barnstorming share price growth over the last five years. Especially my first pick.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Melrose Industries

Melrose Industries (LSE: MRO) is one of those unglamorous blue-chips that private investors can easily overlook, to their cost. It has grown into a company worth £10.83bn by purchasing underperforming manufacturing businesses, then working hard to turn things round. It’s probably best know for its recent takeover of GKN.

Melrose aims to revive its acquisitions and sell them at a profit, then return the proceeds to shareholders. It only floated on AIM in 2003, but since then has posted an average shareholder return of 25% a year, and created £4.8bn of shareholder value.

The share price is up an astonishing 352% over the last five years, against a rise of around 14% across the FTSE 100 as a whole. Despite this, it trades at a relatively modest 16.7 times forward earnings, roughly similar to the valuation for the index as a whole.

This is a growth stock rather than an income play, although it does yield 2.2% a year, covered 2.7 times. You also have to brace yourself for lumpy profits, which can bounce around depending on the timing of acquisition and sales.

That makes it very difficult to look at one set of company results and gauge the underlying trend. However, Melrose now has 16 years of storming success under its belt, which is an impressive track record for any company.


Exhibitions, events and business publishing group Informa (LSE: INF) can’t match that level of share price growth, but it’s nonetheless up 77% over five years, way ahead of the index. It has nudged higher today after reporting continued growth in revenue, adjusted profit, earnings and cashflow, with full-year group revenue on track to hit 3.5%.

Underlying revenues grew 2.8% in the 10 months to 31 October, and that’s ahead of its key November-December trading period, which is seasonally stronger. Informa has been enlarged by its recent tie-up with UBM, and is now a £10bn company with a global reach in the knowledge and information economy, including professional, commercial and academic.

Recent growth came despite two “impacts”, in Dubai and also Hong Kong, where civil protests have slightly dented revenues. Informa also issued a new €500m bond to strengthen its balance sheet and lower the overall cost of debt and extending average maturity to 5.5 years. Its debt recently doubled to £2.68bn, roughly a quarter of its market-cap, but is not a major concern.

Informa currently trades at 15.9 times forecast earnings, which means it’s fractionally cheaper than the FTSE 100 as a whole, despite its dramatically superior share price performance. The forecast yield is 2.9%, covered 2.2 times, so this one is also primarily a growth play.

Things look solid if not spectacular on that front, with earnings expected to climb 3% this year and 5% next. A solid company for challenging times.

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.

More on Investing Articles

Senior woman wearing glasses using laptop at home
Investing Articles

SSE shares are up 15% since the market correction! Should I buy?

Jabran Khan looks at why SSE shares have been on an upward trajectory in recent weeks and decides if he…

Read more »

One English pound placed on a graph to represent an economic down turn
Investing Articles

After crashing 29%, Spectris shares look cheap to me

After peaking at 4,167p last September, Spectris shares have slumped by over 29%. But I see deep value in the…

Read more »

British Pennies on a Pound Note
Investing Articles

Here is why I added this dirt-cheap FTSE 100 penny stock to my holdings!

Jabran Khan explains why he added this dirt-cheap FTSE 100 stock to his holdings and is excited by its recovery…

Read more »

Woman looking at a jar of pennies
Investing Articles

3 FTSE 100 penny stocks! Which is the cheapest buy?

Our writer examines three penny stocks that feature in the FTSE 100 index to ascertain whether they have a place…

Read more »

Arrowings ascending on a chalkboard
Investing Articles

Is the Vodafone share price an opportunity at current levels?

Jabran Khan looks at the current Vodafone share price and decides if he would add the shares to his holdings…

Read more »

Smiling senior white man talking through telephone while using laptop at desk.
Investing Articles

4 gems I’d include in my Stocks & Shares ISA

Jon Smith explains some of the top stocks he's thinking about including in his Stocks and Shares ISA a we…

Read more »

Compass pointing towards 'best price'
Investing Articles

At 85p, are Rolls-Royce shares a no-brainer buy? 

The Rolls-Royce share price look very cheap right now. And I think this might be my last chance to buy…

Read more »

positive mental health woman
Investing Articles

My £3-a-day blue-chip passive income plan

Our writer sets out his passive income plan of investing a few pounds each day in top stocks.

Read more »