This month, two growth stocks I like the look of are Ashtead (LSE: AHT) and PureTech Health (LSE: PRTC). Here’s why I’m seriously considering buying some for my holdings if I can.
Ashtead
Ashtead is one of the largest equipment rental firms serving the construction industry. It makes most of its money in North America, which is where my excitement around potential growth comes from (more on that later).
The shares are down 5% over a 12-month period, from 5,580p at this time last year to current levels of 5,284p. However, this past year has been tough due to volatility. Ashtead shares have been on a tremendous run in recent years, climbing 174% over a five-year period.
I reckon continued economic turbulence is Ashtead’s biggest challenge, at least in the short to medium-term. This is because construction and infrastructure projects slow down during uncertainty, like now. This could hurt performance and investor returns.
However, I’m a long-term investor, therefore I’m looking to the future. In the US, a potentially lucrative infrastructure bill passed by the government could see Ashtead and the wider construction industry benefit. With lots of money to be released, Ashtead could see performance and returns boosted nicely.
A dividend yield of 1.5% and the shares looking decent value for money on a price-to-earnings ratio of 15 help my investment case. I’d expect the shares to continue their upward trajectory, more so once volatility cools. Plus, payouts could grow in line with performance. However, it’s worth mentioning dividends aren’t guaranteed.
PureTech Health
PureTech Health is a bio pharma business specialising in therapies and treatments for serious diseases.
Over a 12-month period, the shares are down 24%, from 246p at this time last year to current levels of 185p. However, it’s worth mentioning that they did spike 49% in December due to some excellent clinical results and positive developments.
In December, the business reported exciting developments in three key areas of its efforts. These were its pulmonary disease treatment, dubbed LYT-100. Next was its central nervous system area, labelled LYT-320. Finally, there were developments in its focus on oncology, known as LYT-200. This helped the shares soar.
In addition to this, Bristol Myers Squibb, a larger bio pharma firm, snapped up PureTech-founded Karuna Therapeutics for a mammoth $14bn. I reckon this deal is a sign that PureTech is making positive waves and breakthroughs in the industry.
The natural risk for PureTech shares is that clinical trials and treatment development don’t bear fruit or aren’t viable. This could have a disastrous impact on the business and shares.
However, I must note that the business looks in good financial health to continue its aims. Its last update mentioned $320m of cash on its balance sheet. This could help support growth aspirations.
Of the two stocks, I consider PureTech to be a tad riskier, but there’s still some exciting potential, if you ask me.
