As a fully signed-up Fool, I relish opportunities to buy quality growth shares at decent prices. I reckon the dip we’ve seen in global markets in 2022 is one example.
Here are three companies that all feature on my shopping list to begin snapping up today.
The share price of global music and audio equipment firm Focusrite (LSE: TUNE) has had a pretty shocking year, so far. Priced at 950p, as I type, the stock is down 32% in value since the beginning of January.
At least some of this tumble makes sense. The AIM-listed company was one of the few beneficiaries of the multiple UK lockdowns. Now that we’ve regained our freedom, demand isn’t quite so robust. Recent half-year results revealed a 2.5% fall in group revenue to £92.9m.
Sure, galloping inflation and component supply issues haven’t exactly helped. The risk here is that these continue to impede progress for a while.
Still, it’s worth noting that the company is making far more money than it was pre-pandemic. The rise in content creation and recovery in live events also bode well for Focusrite’s earnings outlook.
Having once traded well above 30 times forecast earnings, shares now change hands for a much-more-reasonable P/E of 18. I suspect opening a position now could prove lucrative for me in the medium term.
Another growth share I might begin buying is veterinary services provider CVS Group (LSE: CVGS). The shares might not have had such a bad 2022 compared to Focusrite. Nevertheless, an 18% reduction is still significant.
In my opinion, CVS has great defensive qualities. I reckon the vast majority of pet owners won’t be cutting down on how much money they spend on their furry (and not so furry) companions, even as prices rise. This becomes even more likely when it concerns the latter’s health.
The jump in pet ownership — and the fact that many of these animals will be family members for many years — should also mean earnings keep growing.
Naturally, at least some of this is already reflected in CVG Group’s valuation of 20 times forecast FY23 earnings. That’s not cheap and there’s a chance the shares could dip lower if global markets continue to wobble. However, I’m tempted to begin nibbling now.
A final growth share I’ll highlight is SDI Group (LSE: SDI). Of the three mentioned here, its share price has performed the best in 2022. This is not to say that the 16% fall has been easy for existing holders to bear.
SDI designs and manufactures scientific products for use in digital imaging and sensing. That doesn’t strike me as cyclical work. In fact, this month’s trading update shows just how well the small-cap is doing.
The company expects both revenues and profits for the last financial year to “materially exceed current market expectations“. Chairman Ken Ford also believes SDI’s acquisition strategy and commitment to ongoing investment should make FY2023 its “best year yet“.
Naturally, no investment is without risk. My biggest issue here is that the valuation (20 times earnings) is fairly high compared to industry peers
For a company that’s consistently grown annual earnings for quite a while now, I think it’s a risk worth taking.