I’m searching for the best growth shares to buy for my portfolio in the second half of 2024. Here are two on my shopping list for when I next have spare cash to invest.
MJ Gleeson
Housebuilders like MJ Gleeson (LSE:GLE) have been under pressure since interest rates began rising a few years back. While the Bank of England is tipped to cut its benchmark very soon, nothing is guaranteed, creating lasting risk for companies like this.
But if City brokers are right, Gleeson could be about to enjoy a sharp rebound in annual earnings. The builder’s bottom line is tipped to increase 12% and 18% in the financial years to June 2025 and 2026, respectively.
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Over the long term, demand for newbuild homes is expected to rise across the board as Britain’s population increases. And Labour’s intention to cut planning red tape will give construction companies a better chance to exploit this. The government thinks this will create 1.5m new homes over five years.
It’s possible that MJ Gleeson could perform better than the broader market, too. This is thanks to its focus on the affordable homes segment, where demand is especially high.
The 2.8% increase in Gleeson’s completions during the 12 months to June — a period when each of its major rivals struggled to sell — shows this theory in action.
A report from the National Housing Federation and Crisis suggests 145,000 new affordable properties are needed each year between now and 2031. Gleeson is in one of the box seats to capitalise on this opportunity.
Games Workshop Group
Games Workshop (LSE: GAW) is another top growth share I’d buy for the second half of 2024.
The tabletop gaming giant has the wind in its sails right now, and in June projected profits of at least £200m for the last financial year, ahead of forecasts. This impressive sales and earnings statement pushed the company’s share price sharply higher.
Things could get even better, too, if the business announces fresh details on the potentially blockbuster media agreement it has with Amazon. Plans are afoot to make film and TV content based on the UK firm’s highly popular Warhammer 40,000 gaming universe.
Games Workshop isn’t predicted to grow earnings as rapidly as MJ Gleeson in the near term. Rises of 7% are predicted for both of the next two financial years (to May 2025 and 2026).
But these numbers aren’t to be sniffed at. And given the company’s knack of publishing forecast-beating trading updates, I believe profits forecasts could well be upgraded over time.
Once concern I have is the high valuation attached to Games Workshop shares. Today they trade on a forward price-to-earnings (P/E) ratio of 22.7 times.
A reading like this can prompt a sharp price correction if investor sentiment suddenly darkens. Still, it’s my opinion that the FTSE 250 firm merits a premium valuation, and so it remains a great stock to consider right now.
