Cheap FTSE growth stocks to consider buying in September

Having been in the shadows for a while, some of the UK’s best growth stocks could be set for stellar recoveries as economic confidence improves.

| 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.

As decent as the UK stock market has performed in 2024 so far, I’m still able to find plenty of cheap growth stocks that could rise strongly if interest rates continue falling and economic confidence gradually improves.

Bargain recovery stock

One example I’d consider buying now if I had the cash is JD Sports Fashion (LSE: JD).

Now, it’s fair to say that this retailer has seen better times. A cost-of-living crisis has hammered sales and pushed the share price down almost 15% in 2024. It’s also about 40% below the record high hit in November 2021.

Should you invest £1,000 in M&G 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 M&G made the list?

See the 6 stocks

Created with Highcharts 11.4.3JD Sports Fashion PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

There’s a risk of this negative momentum carrying on if the company’s costly expansion into North America doesn’t go according to plan. As part of its strategy to diversify earnings, it recently shelled out $1.1bn to acquire US rival Hibbett.

But I would argue that a lot of fear is now baked in. A price-to-earnings (P/E) ratio of a little under 11 is cheaper than the UK stock market average. It’s also significantly below JD Sports Fashion’s five-year average P/E of 20.

On another positive note, the last update (in August) showed some encouraging signs. Management revealed a 2.4% rise in Q2 underlying sales and made no change to full-year guidance on adjusted profit.

Are those green shoots I see?

Market leader going ‘cheap’

Another FTSE stock that could prove to be a bargain in time is property platform provider Rightmove (LSE: RMV).

That might seem an odd thing to say considering the shares already trade at a P/E of 22. But Rightmove is a special company, in my view. In addition to being the clear leader at what it does, the firm’s asset-light business model means it can achieve staggeringly high margins.

Like JD Sports Fashion, the valuation is also far below the firm’s five-year average P/E of 31.

Of course, the near-term trajectory of Rightmove’s share price going forward is likely to depend greatly on how quickly UK interest rates fall from here.

Created with Highcharts 11.4.3Rightmove Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

A series of cuts in (fairly) quick succession could see this growth stock recapture its former glory as investors bet that earnings will rise as housing market activity picks up. But a longer-than-expected pause after the initial reduction could do the opposite.

As AI continues to be adopted, there could also be more challengers for its crown too.

Time for this fallen star to rise?

A third UK growth stock that’s looking interesting from a valuation perspective is Watches of Switzerland (LSE: WOSG).

This is another retailer that’s been battered by economic headwinds. But, again, an awful lot of awfulness now looks priced in. I can pick up the stock on a P/E of just nine right now. If trading is truly showing signs of stabilising, as management implied in June, there could be a solid recovery ahead.

Created with Highcharts 11.4.3Watches Of Switzerland Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

On the flip side, the shares could be dragged lower by association if other businesses in the luxury space continue to trade poorly. Or the sort of watches it sells could lose their popularity to more tech-focused timepieces.

Perhaps it may be best to hold on for the next update before making a move here. Fortunately, we only have to wait until next Tuesday (3 September) for this.

Should you buy M&G now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation 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.

Paul Summers 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.

We think earning passive income has never been easier

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

More on Investing Articles

Investing Articles

Here’s the dividend forecast for Rolls-Royce shares as Trump rocks the markets

Rolls-Royce shares have joined in the volatility over the past week. However, with the direction being largely downwards, the dividend…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Dividend yields of up to 11%! Here are 3 UK passive income stocks to consider

Searching for ways to supercharge your passive income with UK dividend stocks? Here are three that have grabbed our writer's…

Read more »

Young Caucasian woman at the street withdrawing money at the ATM
Investing Articles

£10,000 invested in NatWest shares at the start of 2025 is now worth…

NatWest shares surged into 2025, but things have become a little more complicated in recent weeks. Dr James Fox explores.

Read more »

Investing For Beginners

Why the FTSE 250 could outperform the FTSE 100 for the rest of the year

Jon Smith explains why the FTSE 250 could do better than its big brother when factoring in domestic exposure and…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Tariff fears send the Lloyds share price tumbling, but the dividend yield is climbing

Just when the Lloyds Banking Group share price had been rising steadily, along comes a global upheaval to knock it…

Read more »

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

Here’s how a stock market crash could help an investor retire years early

A stock market crash can be alarming -- but for the well-prepared investor, it can also be an exceptional opportunity…

Read more »

Investing Articles

1 key fact to remember in this stock market correction

This writer takes a look at a FTSE 100 investment trust that is catching his eye after the recent massive…

Read more »

Investing Articles

I was wrong about the Tesla stock price!

Tesla stock's been affected more than most by ‘Liberation Day’. But our writer has other concerns about Elon Musk’s company.

Read more »