Are the following three shares the best stocks for me to buy right now for explosive growth? I think they might be. I see these small-to-medium-sized companies as combining decent valuations with very strong growth prospects.
The first stock to buy right now on my list is property franchisor group Belvoir (LSE: BLV). With evictions banned by the government and young people losing their jobs, I might assume the lettings agent would have seen rents drop. Yet it seems to have had a pretty good pandemic, with its franchisees continuing to do well, which bodes well longer term.
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Belvoir provides both property sales and lettings, as well as financial services. Moving away from lettings, where it started, provides more diversified earnings. The expansion of financial services is particularly exciting. Also, Belvoir has formed some great partnerships, for example with The Nottingham Building Society.
With a P/E of 12, the stock is fairly valued. Operating margins are high and the balance sheet looks strong. It’s all very positive. An added bonus is analysts forecast the share price rising by around 33%.
But as government takes tax breaks away from property investors, there might end up being less demand for Belvoir’s services. The property group is also acquisitive so there’s a risk it could overpay for future growth.
Overall through, I back management and the pandemic has shown the business model is resilient even in a difficult economic environment. I really do think it’s a stock to buy right now and will very likely add it to my portfolio soon.
Another high flyer
K3 Capital (LSE: K3C) is another stock with a lot to like, in my opinion. The Bolton-based business operates professional services businesses that advise SMEs. It has been growing revenue at a rate of knots. From 2015 to 2020 revenue more than tripled. It’s forecast to go from £15m in 2020 to £50.9m in 2022. That’s explosive growth, in my book.
Operating profit is also climbing strongly, margins are high and dividend growth is strong. With a market capitalisation of only £250m, there’s plenty of room for yet more growth.
With any share there is the possibility that the share price might not perform, of course. When it comes to K3 Capital, the main risks I see are that acquisitions may not integrate well or be too expensive. And as a professional group, people are key to its success so losing senior executives and managers could be a big blow.
Overall for me, the pluses massively outweigh the minuses. K3 is, for me, a stock to buy right now.
A final stock to buy right now
EKF Diagnostics is a final stock I want to briefly look at. The healthcare group grew revenues from £30m in 2015 to £65.3m in 2020. It’s projected to grow much further with revenues of £56.2m in 2022.
The risk with this one is the shares are potentially expensive with a P/E of around 29. But I’ll research further and potentially add to my portfolio as a riskier investment.
All these stocks strike me as high-quality growth opportunities. I won’t be at all surprised if they all see explosive growth in the coming months and years.