Every month, we ask our freelance writers to share their top ideas for growth stocks with investors — here’s what they said for July!
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Experian
What it does: Experian provides credit services and other related financial data to businesses and individuals
By Jon Smith. Experian (LSE:EXPN) has rocketed 26% higher over the past year. The global data and technology company makes money by providing credit services and similar data to a wide range of customers.
The latest results showed that in 2023, profit before tax rose by 32% versus the previous year. Revenue grew by 8%, with guidance that this should grow by the same amount in the following year.
It flagged up that the global economic recovery should help to grow demand further in the coming couple of years. I agree with this, as consumers are going to be more focused on their personal finances to ensure they can survive another potential cost-of-living crisis.
I do note that the firm will need to diversify into other offerings further down the line. Otherwise, there’s a limit on how big it can get right now, which is a risk.
Jon Smith doesn’t own shares in any firm mentioned.
Gulf Marine Services
What it does: the firm operates self-propelled and self-elevating support vessels (SESVs) serving the oil, gas and renewables sectors.
By Kevin Godbold. There’s been a pullback in the Gulf Marine Services (LSE: GMS) share price. The pause is welcome and has stopped the valuation running ahead of events.
This stock comes with risks, of course. The company’s fleet is run from offices in United Arab Emirates, Saudi Arabia and Qatar and serves international markets. However, one of the concerns is the big pile of debt on the balance sheet.
That had combined with the cyclicality in the industry to cause trouble for the business and the share price.
Much of the recent progress has been due to the cyclical recovery of operations and moves to reduce the level of borrowings. But with the share price near 19p (24 June), the value and quality indicators remain attractive, and positive news flow keeps on coming.
I’m optimistic about the outlook for the industry and think it’s worth focusing on this stock for July onwards.
Kevin Godbold owns shares in Gulf Marine Services.
Raspberry Pi
What it does: Raspberry Pi makes tiny little computers, that run Linux and can be programmed to control all sorts of things.
By Alan Oscroft. Yep, I’m going for it. I’m tagging Raspberry Pi (LSE: RPI) as my top UK growth pick.
It’s had a mixed ride since trading opened on 14 June, so it’s hard to get a feel for market sentiment yet.
And valuations are tricky, with a price-to-earnings (P/E) ratio of around 30 based on last year’s earnings. I don’t think that’s too high for a tech growth stock, though we don’t know how it might translate into a forecast P/E.
P/E valuations often don’t mean much in a tech growth industry anyway. The growth here is from AI and robotics, which are closely intertwined.
I also don’t know what market share the firm might grab for robotics control computers. So, lots of unknowns here, each its own risk.
But the sheer potential size of the AI market in the coming decades means I might buy some Raspberry Pi shares.
Alan Oscroft has no position in Raspberry Pi.
