2 growth stocks I’d buy right now without hesitation

The recent bear market has thrown up some attractive opportunities in growth stocks, such as these two with strong underlying businesses.

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Several growth stocks appeal to me right now. And I’d buy them if I had spare cash to invest.

For example, I like the look of Ricardo (LSE: RCDO), the strategic, environmental, engineering and consulting company. The business has a history of innovation and trading stretching back more than 100 years. But today it’s working at the cutting edge of some of the world’s most pressing scientific and engineering challenges.

The firm specialises in the transport, energy and scarce resources sectors. And that means it works on solutions for passenger cars, commercial vehicles, rail, defence, motorsport, energy and the environment. 

Diverse sector coverage

Ricardo’s client list includes transport operators, manufacturers, energy companies, financial institutions and government agencies. And the company takes on assignments such as strategy development, cost reduction, safety management, regulatory compliance and environmental impact assessments.

But Ricardo is more than just a consultancy. It also has in-house engineering capabilities for the design of “high-quality” prototypes and low-volume manufacturing of “complex” products and assemblies. For example, engines, transmissions, electric motors, generators, battery packs and fuel cell systems.

On 14 September, Ricardo delivered a decent set of full-year growth figures and reported “strong order intake”, up 23% year-on-year. And I think that bodes well for the future growth of the business. City analysts expect double-digit percentage advances in earnings for the current trading year to June 2023 and for the year following.

However, earnings and the dividend collapsed in 2020 when the pandemic struck. And the directors have since rebased the shareholder payment lower. 

I think that move emphasises that the business has some vulnerabilities and could be sensitive to economic cycles. Indeed, at around 450p, the share price is much lower than its 2018 peak above 1,000p. 

Nevertheless, despite the risks, I’d be tempted to add Ricardo to my long-term diversified portfolio. And the forward-looking earnings multiple is just above 12 for the trading year to June 2024.

Robust earnings growth

But I’m also keen on international event, intelligence and scholarly research company Informa (LSE: INF). The enterprise consists of “two leading scale businesses and dozens of brands with strong market positions”. 

And the organisation’s aim is to provide other businesses and professionals knowledge to help them remain “well-informed, effective and successful”. Informa delivers on its mission by providing digital-first and data-driven products and services alongside live and on-demand events.

In November, the firm reported underlying revenue growth of 41% year-on-year for the period from January to October. And the company explained the increase by pointing to “accelerating international B2B Markets growth, improving performance in Academic Markets, and continuing US operating expansion”. 

The outlook statement was bullish. And City analysts expect earnings to rocket higher by almost 50% in 2023. However, the multi-year record for revenue, earnings, cash flow and shareholder dividends is patchy. And that suggests the business may be vulnerable to general economic cycles.

But I’d be inclined to embrace the risks and add the stock to my portfolio while the share price is around the 614p level. It’s not a cheap share. The forward-looking earnings multiple is running just above 17. But there could be further growth in the business in the years ahead.

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 assessed. Consider taking independent financial advice.

Kevin Godbold 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.

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