2 growth stocks I’d love to buy ahead of the next bull run!

Our writer is looking ahead to greener pastures and details two growth stocks that could soar in the longer term.

| More on:
Young Asian man drinking coffee at home and looking at his phone

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 think it’s a great time to think about potential growth stocks that could do well once volatility subsides. Now could be a good time to snap some up, in my view.

Two picks I’d be willing to buy when I next have some spare cash are Rightmove (LSE: RMV) and Ashtead (LSE: AHT).

Here’s why!

Rightmove

The property market has been in a malaise since economic turbulence began. Inflationary pressures and higher interest rates have caused this. The UK’s largest online property portals shares have fluctuated up and down. However, over a 12-month period, they’re down less than 1%. At this time last year, they were trading for 570p, and they currently trade for 566p.

The natural risk for Rightmove is continued volatility. If interest and mortgage rates remain higher, the buying and selling of properties could remain stagnant, like in recent months. If this continues for a while, Rightmove’s performance could be dented, hurting the shares and potential investor returns.

However, I’d expect interest rates to eventually come down. This could have a huge positive knock-on effect for the property market, and Rightmove. Its wide profile and brand power are too good to ignore, in my view. House builders could ramp up production once more. In turn, selling properties, using platforms like Rightmove, which collects fees for the pleasure, could help the business soar.

At present, Rightmove shares offer a dividend yield of 1.6%. Although dividends aren’t guaranteed, I can see this rate of return growing in line with the business. Plus, the business recently announced a share buyback scheme. I see this as a sign of confidence in the firm’s long-term plan and future outlook.

Ashtead

Construction equipment firm Ashtead could be a great candidate to benefit from turbulence dissipating.

The shares have dropped 10% over a 12-month period, from 5,476p at this time last year to current levels of 5,166p.

Ashtead’s dominant market position in North America is where its biggest risk, and potentially exciting growth, comes from. On the bearish front, the US economy has stalled in recent months, like many others, therefore infrastructure spending and construction has slowed. If this continues moving forward, performance and returns could be hurt.

However, a recent infrastructure bill passed by the government worth around $1trn could provide Ashtead with lucrative contracts and business in the future. Again, I should mention this could kick when the economy is in a better place. This could be a long way down the line yet.

Based on its presence, profile, and historical track record, the fact that the shares trade on a price-to-earnings ratio of just 16 is attractive. I’m comfortable paying a fair price for a good company. Plus, a dividend yield of 1.4% could grow in the future too.

To conclude, both stocks, Rightmove and Ashtead, could struggle in the shorter term. However, I’m more interested in the longer term. I’d buy them now, and hold on to them to provide returns and growth later down the line.

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.

Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has recommended Rightmove Plc. 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 Investing Articles

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

Investing freedom — but inside a pension

Strapped consumers might be cutting back on investing, but they’re still keeping up their pension contributions. The only problem? A…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Forget gold! I’d rather buy these 3 FTSE high-yielders in a Stocks and Shares ISA

Gold looks like a risky investment to me as the price hits an all-time high. I'm ignoring the fuss to…

Read more »

Young female business analyst looking at a graph chart while working from home
Growth Shares

This 55p UK stock could rise more than 300%, according to a City broker

This UK stock has fallen from above 800p to below 60p. But analysts at Citi believe it’s capable of a…

Read more »

Businesswoman analyses profitability of working company with digital virtual screen
Investing Articles

I think this FTSE 250 trust has all the right ingredients to lock in long-term profits

Today I'm examining the prospects of a private equity investment trust on the FTSE 250 that caught my attention recently…

Read more »

Young black man looking at phone while on the London Overground
Investing Articles

2 under-the-radar UK shares investors should consider snapping up

Two UK shares have caught the eye of our writer. She explains why investors should be taking a closer look…

Read more »

Investing Articles

Are these 2 ultra-high-yielding income stocks a good buy for me?

These two income stocks often split the debate amongst investors. So what does our writer think of them as potential…

Read more »

Senior woman potting plant in garden at home
Investing Articles

5% yield! This dividend stock could be great for my retirement

Our writer explains why this dividend stock appeals to her as she’s investing to build wealth to enjoy in the…

Read more »

A young Asian woman holding up her index finger
Investing Articles

I’d aim for a second income of £1,000 a month with this super-reliable dividend stock

I think a great way to build a second income stream is by investing in dividend stocks via a Stocks…

Read more »