Buying high-growth UK shares can be an incredibly profitable investment strategy. However, this strategy might not suit all investors because it involves quite a bit of uncertainty. For example, it’s impossible to predict how a company’s growth will evolve over the next five to 10 years.
Still, I’m comfortable with the level of risk involved with such a strategy. As such, here are three high-growth UK shares I’d buy for my portfolio today.
UK shares I’d buy
The first company on my list is retailer Pets at Home (LSE: PETS). It was recently reported that thanks to a lockdown surge in pet ownership, the demand for pet products had reached “unprecedented” levels.
Pets at Home is the largest single retailer of pet products in the country, in a highly fragmented industry. This gives the company economies of scale and the ability to achieve better deals from suppliers.
Thanks to the rising demand for pet products and petcare, earnings per share are expected to increase 50% in the current financial year, and a further 11% in 2023. There’s no guarantee the company will hit these targets, but I think they clearly illustrate its potential.
Currently, the company has a near-monopoly on the UK pet market, but that could change. There’s room for another entrant, and this could drive a price war, which would almost certainly hurt the retailer’s growth.
Despite this risk, I’d buy the company for my portfolio today, considering its growth potential.
Growth market
The other stock I’d acquire for my portfolio of UK shares is Vistry (LSE: VTY). I’m encouraged by the outlook for the UK housebuilding sector. As the demand for properties increases, I think homebuilders such as Vistry may report rapid earnings growth.
Analysts believe its net profit could jump from £138m in 2019 to £308m by 2022. Once again, I think these numbers show the group’s potential, although it isn’t guaranteed to hit City growth estimates.
Indeed, a sudden increase in interest rates, or change to the tax regime, could significantly impact demand for properties across the country. This would weigh on Vistry’s growth. The business may also face margin pressure due to rising costs.
Nevertheless, considering the outlook for the homebuilding industry in the country, I’m excited by Vistry’s potential. That’s why I’d buy the high-growth stock for my portfolio of UK shares.
Growth investor
Draper Esprit (LSE: GROW) is a UK-based venture capital enterprise that invests in technology companies in Europe. I think this makes the firm a unique business among UK shares. It’s not what I’d call a high-growth business itself, but it does own stakes in high-growth organisations.
This reduces the risk of buying growth stocks directly, in my opinion, because the company owns a diversified basket of investments. It’s also a specialist growth investor. Therefore it knows far more about the industries it invests in than I do.
That said, this doesn’t mean the company won’t make mistakes. There’s always going to be a chance the group might end up investing in an enterprise that fails. This would hurt its growth rate.
But as a way to invest in a diverse portfolio of growth investments, I’d buy Draper Esprit.
