2 high-growth stocks I’d buy today

These two high-growth stocks look cheap compared to their potential over the next two years, and that’s why this Fool would buy both.

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I like to invest in a bucket of growth stocks alongside other equities in my portfolio. 

With that in mind, here are two high-growth stocks I’d buy for my portfolio today. 

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High-growth stocks to buy 

The first company on my list is Cairn Homes (LSE: CRN). This Irish-based home builder has reported impressive growth over the past five years. Total revenues have increased from just €4m in 2015 to €435m for 2019. 

Revenues dropped in 2020, but they are expected to return to growth in 2021. Analysts reckon the company could print revenues of €529m in 2022, a multi-year high. 

At the same time, group profits could surge to €59m, outpacing 2019’s high. While these are just forecasts and, as a result, subject to change, I think they show the company’s potential. 

However, despite its growth outlook, the stock is currently changing hands at a 2022 price-to-earnings (P/E) multiple of just 12.9. I think that is far too cheap. 

Of course, these projections are all based on forecast numbers, so there’s no guarantee the company will meet these projections. If it doesn’t, the current valuation might look expensive, especially if earnings fall. That’s probably the most considerable risk hanging over the stock right now. 

Despite this, I would still buy the company for my portfolio of high-growth stocks considering its potential. 

Growth market 

Designer, manufacturer, and distributor of eyewear frames Inspecs (LSE: SPEC) is, in my opinion, a desirable growth investment. According to reports, the number of people requiring glasses is increasing as we spend an ever-growing amount of time stuck in front of screens. 

I think this suggests companies like Inspecs could be set for an extended period of growth as spending in the eyecare market expands. 

The company’s revenue fell last year as the pandemic ravaged businesses around the world.

However, management used the opportunity to increase the company’s diversification and vertical integration. It acquired two other firms, Norville and Eschenbach. The enlarged group is now a “well-balanced vertically integrated business serving both global retail chains and the independent optical market.

Revenue is already picking up. The group reported sales of $67m in the first quarter of 2021, compared to $47.4m in the fourth quarter of 2020. 

Based on this expansion, City analysts are already expecting a record year for the group. They’ve pencilled in a record net profit of $11.2m for the year. 

Based on these projections, I would buy the company for my portfolio of growth stocks.

Key risks and challenges the company might face include making a poor acquisition, which could lump the business with unwanted debt and eat into profit margins. Competition in the sector could also hurt profit margins and sales growth.

Indeed, this is only a relatively small business compared to its multi-billion dollar peers. All of these have bigger marketing budgets and more substantial balance sheets. 

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Rupert Hargreaves 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.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

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