Just released: the 3 best growth-focused stocks to buy in March [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due to a combination of business performance and potentially attractive share valuation.

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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.

Premium content from Motley Fool Share Advisor UK

Our monthly Fire Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of growth-focused Fire recommendations, to help Fools build out their portfolios.

“Best Buys Now” Pick #1:

Croda (LSE:CRDA)

  • Recent full year results from Croda showed double-digit declines in sales and profits as the specialist chemicals company’s customers responded to the uncertain economic environment by cutting back on orders.
  • Yet, despite revenue declining 11% year-on-year on a like-for-like basis to £1,694.5m and operating profit dropping by a third to £247.5m, we don’t think the business is in real trouble, especially relative to other chemicals companies that were hammered even harder by customer destocking. 
  • That relative outperformance reflects Croda’s focus on more specialist chemicals that in many cases it is the sole provider for, as well as its higher exposure to pharma, agriculture, and consumer goods products, which are less cyclical than industrial chemicals.
  • And 2023 may well be the trough with Croda’s management predicting mid to high-single digit sales growth in FY24. While margins are going to remain depressed, that’s not a huge problem as Croda remains highly cash generative and lightly levered with net debt of roughly 1.4x EBITDA at period end.
  • At around 30 times consensus forward earnings Croda may not appear dirt cheap but taking a long-term view, if the economic picture brightens and management can get back to steady market share wins and margin progression then we think contrarian investors would do well by taking a closer look at the business this month.

“Best Buys Now” Pick #2:

Redacted

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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.

The Motley Fool UK has recommended Croda International Plc. 

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