3 gold nuggets to hold in a Stocks & Shares ISA for long-term growth

Jon Smith runs over several growth stocks for a Stocks and Shares ISA that he feels have room to move higher in the coming years.

| More on:

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.

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I tend to find that most investors who make use of a Stocks and Shares ISA do so for long-term goals. Those that prefer to trade or hold stocks for a short period of time usually don’t execute this strategy from the ISA. Due to the benefits of not having to pay capital gains tax when selling a stock in the ISA, long-term growth ideas make sense. Here are three that I’ve think investors should be considering at the moment.

Large historical share price gains

First up is Frasers Group (LSE:FRAS). The business owns the likes of Jack Wills and House of Fraser. The process of buying brands to fuel growth has worked well in the past. This speaks to why the share price has soared by 233% over the past three years, with it up 13% in the past year.

I think this growth stock still has legs to move higher in coming years. One important factor influencing this is the high gross profit margin (42% in the latest half-year report). This means that it’s able to convert a large amount of incoming revenue into gross profit.

Naturally, the high street is seeing lower demand as people’s spending habits change. This is a risk, but the online presence of many brands within the group should cushion this impact.

Growth potential going forward

The second idea is BAE Systems (LSE:BA). When thinking about an area in the market that should offer solid returns in the long term, defence is definitely on the list. Sadly, the unstable nature of the world means budgets for defence are increasing.

BAE Systems is well placed to benefit from this, given the end-to-end capabilities it possesses for developing, manufacturing and selling military related systems and products. Over the past three years, the stock has risen by 86%. It’s up 33% in just the past year.

Granted, business does rely on securing large contracts. Losing out on just a few Government contracts could provide a hit to future earnings.

Tapping into the UK population

Finally, St. James’s Place (LSE:STJ) is a stock that I feel could perform strongly going forward. The wealth manager managed to post record results for 2022. This included having pre-tax profit break above £500m, much higher than the £353.8m from 2021.

Looking forward, the UK has an aging population. This should support more people thinking about financial planning and investment for retirement. Furthermore, high inflation and high interest rates force people to think about money more. This should attract more clients in the coming year as many think about how to make cash work harder.

The company does need to be watchful for competition. Wealth management has been flagged up as a key area of focus for several high-street banks.

All three ideas are on my watchlist, and I feel investors who are focusing on long-term ISA growth will benefit from reviewing them as well!

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.

Jon Smith 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.

More on Growth Shares

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

3 reasons why I predict UK shares will soar over the next 12 months!

Our writer believes there are plenty of reasons why UK shares will do well over the next year or so.…

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

Down 5%, Glencore’s share price looks a serious bargain to me now

Glencore’s share price looks undervalued to me, supported by strong earnings growth prospects and the potential resumption of extra shareholder…

Read more »

Investing Articles

My Taylor Wimpey share price prediction for the second half of 2024

Having underperformed the FTSE 100 from January to June, our writer reckons the Taylor Wimpey share price might enjoy a…

Read more »

Investing Articles

Could this beaten-down UK growth stock be the next Rolls-Royce?

Mark Hartley feels Rolls shares have had their time and are running out of steam. Now he’s searching for the…

Read more »

Fireworks display in the shape of willow at Newcastle, Co. Down , Northern Ireland at Halloween.
Investing Articles

2 top growth shares I’d buy for the second half of 2024!

Looking for the best growth shares to buy? These FTSE 250 and small-cap shares have significant share price potential, according…

Read more »

Investing Articles

Up 47% in a week! Can the Capita share price continue to rocket?

The Capita share price has smashed the market in the last week, and Harvey Jones wonders whether it has the…

Read more »

Growth Shares

2 FTSE 100 stocks that are outperforming these MAG7 members

Jon Smith reveals some FTSE 100 stocks that offer him a viable alternative to the Magnificent 7, based on recent…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

These UK shares are stinking out my ISA. Time to sell?

Paul Summers has been reviewing some of the worst-performing UK shares in his portfolio. Has the time finally come to…

Read more »