Five British-listed stocks, picked out by Fool.co.uk contributors for their growth potential, across a variety of industries. Without further ado, let’s get to them!
Currys
What it does: Currys is a retailer of varied electrical goods, from TVs and appliances to computers and gaming consoles.
By Mark David Hartley. I recently bought Currys (LSE: CURY) shares after noticing a shift in consumer behaviour, particularly towards electronics. Affordable e-commerce stores remain the biggest risk to its profits as it struggles to compete in this market. But consumers are increasingly looking for in-store advice as trust in online reviews wanes. That put Currys in a great position, especially after cornering the UK market for next-gen AI-enabled laptops.
Yes, the price is still down a massive 82% since 2016 but I think it’s a stronger company than many people give it credit for. It benefits from a well-established brand presence, a large network of physical stores, and a growing online presence. While it’s had its ups and downs, overall performance has been good and it continues to demonstrate an ability to adapt to changing market conditions. Additionally, its strong focus on customer service and after-sales support is helping solidify customer loyalty.
Mark David Hartley owns shares in Currys.
DP Poland
What it does: DP Poland holds the exclusive rights to operate and sub-franchise the Domino’s Pizza brand in Poland and Croatia.
By Ben McPoland. At a share price of 11p and market cap of £100m, I reckon DP Poland (LSE:DPP) has an outside chance of rising much higher. I say “outside chance” because the company has a history of losses and frequent share dilution to fund its operations. For it to ever deliver shareholder value – alongside its pizzas – this will need to change. And that’s not guaranteed.
However, the firm is growing strongly right now, with group revenue jumping 26% to £26.4m during the first half of 2024. It’s gaining market share in Poland, and City analysts see revenue growing to around £65.8m in 2025, which would be a more than doubling from 2021 (£30m).
Meanwhile, the net loss was just under £0.5m for the first half, so profits are on the horizon. I expect profitability to improve as DP Poland moves towards a capital-light franchise model. This will “accelerate growth and increase return on capital”, according to the firm.
Looking ahead, the company plans to open hundreds more stores across Poland and Croatia (it had 111 at the end of June). I think the stock could do very well.
Ben McPoland owns shares in DP Poland.
hVIVO
What it does: hVIVO is a small company in the healthcare sector that offers services for clinical trials and lab testing.
By Edward Sheldon, CFA. One stock under £1 that I believe could soar in the years ahead is hVIVO (LSE: HVO). It’s currently trading at around 26p.
There are a couple of reasons I believe this stock has the potential to surge. One is that the company has just opened a new state-of-the-art facility in Canary Wharf, London. This should enable it to scale up rapidly in the coming years.
Another is that the valuation is relatively low. Currently, hVIVO’s P/E ratio using next year’s consensus earnings forecast is just 15.5. Given that the company is targeting revenues of £100m by 2028 versus approximately £62m this year, I think the stock could easily command a P/E ratio in the low to mid-20s in the future.
It’s worth noting that hVIVO faces some unique risks. For example, clinical trials can sometimes lead to complications or even fatalities.
All things considered, however, I think the stock has bags of potential.
Edward Sheldon has no position in hVIVO.
ITV
What it does: ITV runs a UK TV network, and produces and distributes programme content globally.
By Alan Oscroft. In the words of CEO Carolyn McCall at H1 time, ITV (LSE: ITV) “has been transformed over the last five years“.
ITV Studios, the update suggests, should produce record profits this year, due partly to improved margins. And that, I think, could take some pressure off the erratic nature of advertising revenue.
Forecasts suggest we could be looking at a 63% rise in earnings per share (EPS) between 2023 and 2026.
It could push the 2026 price-to-earnings (P/E) ratio down as low as nine by 2026. And that’s a stock with a forecast dividend yield of 6.5% for this year, and rising.
The main risks I see are that the content delivery business is highly competitive, and the advertising industry is notoriously fickle.
ITV also carries quite a lot of debt, which could put pressure in the dividend. Analysts, though, see it dropping in the next few years.
Alan Oscroft has no position in ITV.
Seeing Machines
What it does: Seeing Machines provides operator monitoring and intervention sensing technologies for the automotive, mining, transport and aviation industries.
By Paul Summers. I’ve held a small position in Seeing Machines (LSE: SEE) for a long time. Despite the occasional jump in its share price, my patience is still to be rewarded.
However, I remain a believer in the story. The company is a leader in high-tech tracking software that monitors drivers’ fatigue levels. The laudable goal is to reduce accidents on the roads and elsewhere. And legislation requiring automotive manufacturers to fit this sort of (high-margin) tech to new cars is gradually being introduced.
To be clear, this is risky stuff and the company has managed to burn through a lot of cash over the years. This is why I’ve only ever invested money I can afford to lose.
But if Seeing Machines manages to hit breakeven in the next couple of years, I might do very well out of this blue-sky growth stock.
Paul Summers owns shares in Seeing Machines
