Extreme stock market volatility in 2022 makes share investing more challenging than usual. But there are still plenty of top growth stocks across the London Stock Exchange for investors to choose from.
Here’s a quick rundown of three great growth shares I’d buy right now.
Begbies Traynor Group
Insolvency specialist Begbies Traynor Group (LSE: BEG) has a great history of earnings growth. A steady stream of acquisitions mean annual profits growth has averaged more than 20% during the past five years.
City analysts think earnings here will rise by a more muted 5% in the current financial year to April 2023. However, given the worsening economic landscape I think these forecasts could be significantly upgraded in the weeks and months ahead.
The number of corporate insolvencies in England and Wales jumped 40% year-on-year in June, according to latest Insolvency Service figures. There’s a good chance the figure will keep climbing too as the cost-of-living crisis smacks British business.
This week the government announced fresh financial support for small businesses. Further action like this could hamper trading at Begbies Traynor. But, all things considered, I think it’s a top buy.
Book publisher Bloomsbury Publishing (LSE: BMY) is another top stock with a strong growth pedigree. And while forecasts suggest a rare earnings decline this year (to February 2023) I’d still buy the business today. Current forecasts suggest profits will fall 6% year-on-year.
You see, Bloomsbury is the home of Harry Potter. The Hogwarts wizard is a cash cow and as popular as he’s ever been (the series ranked among the company’s best-selling titles in the four months to June, financials this week showed).
The guaranteed revenues that Master Potter produces is a big boost to Bloomsbury’s bottom line. But it’s not the only reason I’d invest in the company today. I also like its successful drive into the world of academic publishing. Sales at Bloomsbury’s Academic and Professional division soared 49% year-on-year between March and June.
Bloomsbury is performing strongly today. But a growth investor needs to remember that a range of other media (video games, streaming and the like) still pose a long-term threat to the business.
Rising interest rates are a problem for homebuilders like Springfield Properties (LSE: SPR). However, this is a danger I think is reflected in the low valuations of these sorts of firms.
This particular growth stock trades on a forward price-to-earnings (P/E) ratio of 6 times. That’s based on predictions annual earnings will rise 30% in the current financial year (to May 2023).
Home prices continue to soar despite the current backdrop of rising rates and high economic uncertainty. Rightmove data this week showed average asking prices rose 9.3% in June. And this encouraged the property listings business to increase its full-year growth forecast to 5-7%.
Demand for Springfield Properties’ new properties continues to soar due to the UK’s chronic housing shortage. And it’s a situation I expect to deliver strong earnings growth here long into the future.