Are these 2 top-performing UK growth stocks set to smash the index all over again? 

Harvey Jones is still kicking himself for failing to buy these two top FTSE 100 growth stocks last June. Now he’s just waiting for his moment.

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Almost a year ago now, I ran the rule over two of the best-performing growth stocks on the FTSE 100. The companies in question were information and analytics firm RELX (LSE: RLX) and accounting software specialist Sage Group (LSE: SGE).

It was the height of artificial intelligence (AI) mania, and both were attracting attention because investors decided they would be beneficiaries.

RELX was expected to use AI to enrich its proprietary datasets to support scientists, lawyers and risk professionals around the world. AI would help Sage provide cloud-delivered software services to small- and mid-cap business customers worldwide.

Top shares, high prices

Both were booming at the time. Their shares were up 24.35% and 45.77% respectively over the previous 12 months, and they’ve kept up the pace since.

Over the last 12 months, the RELX share price has climbed another 24.83%, while Sage shares soared 42.44%. That compares to modest growth of 4.48% across the FTSE 100 as a whole and, once again, confirms the case for buying individual stocks over an index tracker, in my view.

Unfortunately, I didn’t buy either stock. I feared I was arriving at the party too late and had missed the best bit. I prefer to buy stocks before they surge, rather than chase momentum plays.

At the time, RELX and Sage were trading at P/E ratios of 25.24 times and 33.98 times earnings respectively. I decided that was too expensive, but what do I know? In retrospect, they were bargains. Should I buy them today?

Looking for a buying opportunity

On 25 April, RELX reported a strong start to 2024 and confirmed another year of healthy revenue and profit growth across all business segments. It sounded pretty good but investors clearly hoped for more. The RELX share price is idling while the FTSE 100 flies to all-time highs.

Also, it’s hard to see how RELX can generate the extra bit of excitement needed to lift its share price to the next level. It played its ace on 15 February when it announced a £1bn share buyback. Markets are forever greedy and now they’re looking for more. Personally, I think this could be an opportunity for a long-sighted investor like me. I missed my chance of year ago. I’d like to make good my mistake.

Sage is also struggling to prove it can go up a gear from here. In January, Barclays noted that revenue growth and margin expansions had both peaked, while the elevated valuation suggested that “it’s as good as it gets for Sage shares”. Its shares are also idling. Tough at the top, isn’t it?

Are markets making the same mistake I made a year ago? Possibly. I’ve learned from my error and will be watching both stocks like a hawk over this summer. Any sign of short-term weakness and I’ll swoop. It’s the long-term that interests me, and that remains highly promising.

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.

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended RELX and Sage Group 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.

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