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.

Passive income stocks: our picks

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

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.

However, don’t buy any shares just yet

Because my colleague Mark Rogers – The Motley Fool UK’s Director of Investing – has released this special report.

It’s called ‘5 Stocks for Trying to Build Wealth After 50’.

And it’s yours, free.

Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.

And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.

That’s why now could be an ideal time to secure this valuable investment research.

Mark’s ‘Foolish’ analysts have scoured the markets low and high.

This special report reveals 5 of his favourite long-term ‘Buys’.

Please, don’t make any big decisions before seeing them.

Secure your FREE copy

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.

More on Investing Articles

artificial intelligence investing algorithms
Investing Articles

Up 272% in just a year, is Palantir stock just getting started?

This writer recognises that Palantir has grown its business very well -- but does the stock price offer him an…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Up 50%? The Aston Martin share price forecast is mind-blowing! 

If analysts are right, the Aston Aston Martin share price could absolutely rocket in the year ahead. Harvey Jones says…

Read more »

Investing Articles

As the S&P 500 drops, here are 2 Stocks and Shares ISA holdings I’m watching

Our writer has different views on how President Trump's tariffs might affect these two US holdings in his Stocks and…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

£10,000 invested in Tesla stock at Christmas is now worth…

Tesla stock has been one of best-performing investments of the past decade. But things haven't gone to plan for investors…

Read more »

Investing Articles

Up 279% in 5 years, could Meta stock keep soaring?

Meta stock has more than tripled in five years. This writer sees lots to like about the business but also…

Read more »

Pink 3D image of the numbers '2025' growing in size
Investing Articles

25% total return in a year? Is now the perfect time to buy BP shares?

BP shares are on the front line of today's global economic and political uncertainty but analysts think they can still…

Read more »

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

With Cash ISA changes coming, could now be the time to consider buying shares?

Changes to the Cash ISA could lead to greater investment in the stock market. This could be a good thing…

Read more »

Investing Articles

These FTSE 100 dividend shares just got cheaper, thanks to President Trump!

Investors buying dividend shares can lock in bigger long-term yields when share prices take a tumble. These two just did…

Read more »