Sell in May? I bought these 3 magnificent growth stocks last month!

Edward Sheldon believes these three growth stocks could generate fantastic returns for his investment portfolio in the years ahead.

| 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.

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.

There’s an old stock market adage that states investors should ‘sell in May and go away’. However, I don’t pay much attention to this. In fact, last month, I actually bought three growth stocks for my portfolio.

Interested to know what companies I invested in? Read on and I’ll tell you.

Well positioned for growth

First up, we have FTSE 100 industrial company Ashtead (LSE: AHT). It’s one of the world’s largest construction equipment rental companies.

Should you invest £1,000 in JD Sports right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if JD Sports made the list?

See the 6 stocks

Created with Highcharts 11.4.3Ashtead Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

I’ve owned this stock for about 18 months now. My view is that it’s an excellent play on US infrastructure spending.

The reason I bought more? Well I noticed that guidance from FTSE 250 company Keller – which specialises in getting ground ready to build on and has a lot of exposure to the US – was strong. This reinforced my view that companies with exposure to the US construction industry like Ashtead are well positioned for growth.

A risk here is that the company could announce that it’s going to spend money on new equipment. This could hit profits, and the share price, in the near term.

Taking a five-year view though, I’m excited about the growth potential here.

‘Transformative profit potential’

The second stock I bought was software company Sage (LSE: SGE). It experienced a sharp share price fall on the back of slightly lower-than-expected guidance and I bought the dip.

Created with Highcharts 11.4.3Sage Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Now, in hindsight, I pulled the trigger a little early. Since my purchase, the stock’s continued to fall (a lot of software stocks have been weak in the last few weeks).

However, taking a five-to-10-year view, I’m confident I’ll be rewarded. I see this company as a great play on the ‘digital transformation’ theme. As small- and medium-sized businesses move to adopt cloud-based accounting and payroll solutions, Sage should benefit. It’s worth pointing out here that UK portfolio manager Nick Train believes Sage has ‘transformative profit potential’ in the long run.

Economic weakness is a risk to consider here. This could impact smaller businesses and hurt Sage’s growth.

With the software stock now trading on a forward-looking P/E ratio in the mid-20s though (versus 31 for US rival Intuit), I think it looks attractive.

Sky-high demand for its products

Last but not least we have Danish pharmaceutical company Novo Nordisk (NYSE: NVO) – the maker of weight-loss drugs Wegovy and Ozempic. I started a small position here earlier in the year and last month I increased my holding.

Created with Highcharts 11.4.3Novo Nordisk PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The reason I bought this stock is quite simple – the global obesity epidemic. Across the world, there are more than a billion people with obesity today. And this is creating high demand for weight-loss drugs such as Wegovy and Ozempic.

In Novo Nordisk’s recent quarterly results, it reported net sales growth of 24% year on year. It also raised its full-year guidance.

Given the success Novo Nordisk’s having, other pharma companies are scrambling to develop new weight-loss drugs. These could be a threat to Novo’s future sales.

With the annual market for weight-loss drugs forecast to hit $130bn by 2030 though, I see room for multiple players.

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

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.

Edward Sheldon has positions in Ashtead Group Plc, Novo Nordisk, and Sage Group Plc. The Motley Fool UK has recommended Novo Nordisk 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.

Pound coins for sale — 51 pence?

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

More on Growth Shares

Investing Articles

What’s happening to the Rolls-Royce share price now?

The Rolls-Royce share price has taken a knock from US trade tariffs, but it's still gained more than 50% in…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

2 world-class shares to consider buying in the market sell-off

Looking for blue-chip shares to buy amid the market chaos? Here are two high-quality businesses that Edward Sheldon sees potential…

Read more »

Investing Articles

16% lower in 10 days, does Prudential’s share price look a compelling bargain to me?

Prudential’s share price is down a lot from its one-year traded high, which suggests a bargain to be had. I…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

Down 17% in a week! This FTSE 100 growth stock is one I’m watching

Over the last five years, Informa has shown itself to be one of the UK’s most resilient growth stocks. So…

Read more »

Investing Articles

Car-mageddon! The Aston Martin share price has tanked 30% in a month

Our writer looks at the performance of the Aston Martin share price over the past few weeks and considers whether…

Read more »

Light trails from traffic moving down The Mound in central Edinburgh, Scotland during December
Investing Articles

£10,000 invested in Aston Martin shares at Christmas is now worth…

Aston Martin shares have fallen from above £10 in early 2020 to pennies today. Is this the perfect time for…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Down 34%, does IAG’s share price look an unmissable bargain to me now?

IAG’s share price had fallen a long way even before the latest market rout, but this may mean a bargain-basement…

Read more »

Investing Articles

Up 30% in weeks, does the BAE Systems share price still offer value?

The BAE Systems share price has been on a tear over the past couple of months. This writer sees limited…

Read more »