The Motley Fool

2 UK growth stocks to buy and hold for a decade

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.

Arrowings ascending on a chalkboard
Image source: Getty Images.

As a young investor, I am always on the lookout for stable UK growth stocks that I can buy and hold for years. I gauge businesses by looking at industry potential and the expansion strategy of the company.

Based on these factors, I have identified two UK growth stocks that I would add to my portfolio and hold for steady returns over the next decade.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

$300bn industry

A recent report published by Accenture valued the gaming industry at $300bn including console sales and e-sports revenue. British game developer Frontier Developments (LSE: FDEV) is capitalising well on this boom and is set to release big titles that could make it a top name in the industry in the years to come.

In the last 12 months, its stock has risen 30.4% and five-year returns stand at an incredible 1,344.1%, showing how far the industry and company have grown in the last half-decade.

The total revenue in the first half (H1) of 2021 was £36.9m. A large chunk of this comes from paid downloadable content (PDLC) from existing successful titles like Elite Dangerous and Jurassic World Evolution.

The H1 2021 report stated that Elite Dangerous: Odyssey and Jurassic World 2 is also part of its line-up for 2021. This is exciting news for investors as sequels are money-minters in the gaming industry. The company expects 2023 revenue to be £160m–£180m. It also has large cash reserves of £34.9m after investments in a new development label, Frontier Foundry.

But, the gaming industry is very unpredictable. Take the example of CD Projekt RED’s Cyberpunk 2077. The hype was massive, but glitches killed the game completely and the company is set to lose around $50m.

Despite this uncertainty, I remain keen on investing in the gaming sphere and Frontier Developments is on top of my list of UK growth stocks to buy.

Pet care growth stock

Veterinary service provider CVS Group (LSE: CVSG) is on an impressive run in the market. Its share price recently hit an all-time high and I think this growth stock is just getting started.

The pandemic brought with it a huge increase in pet ownership in the UK and CVS Group has benefited immensely from it. In the last 12 months, the share price has gone up 116.9% and there are no signs of this slowing down.

The company’s revenue went up 5.2% to £427.8m in 2020 along with a 46.8% increase in cash generated from operations and a £12.4m investment in new equipment and facilities. This shows me that the company is ready to make the push to be the top vet healthcare provider in the UK. The board expects profit to more than double by 2023–24, which could greatly impact shareholder returns. 

A major concern is the current entry price, which might seem inflated because of the 50.8% increase in share price over the last six months. But, I still think it is a great long-term investment because the number of pet owners could continue rising as pets are increasingly becoming a part of the modern home. Even public spaces are becoming increasingly pet friendly. As a pet owner myself, I understand the importance of quality vet services. The business is showing signs of steady growth over the next 10 years, making it a must-have UK growth stock for my portfolio.

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

Suraj Radhakrishnan has no position in any of the shares mentioned. The Motley Fool UK has recommended Frontier Developments. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.