UK shares have fared better than their US counterparts during the first quarter of 2025. Yet I’m still looking at the FTSE 100 and the FTSE 250 for growth-with-value when it comes to stocks to buy in April.
I have a few ideas in mind, but there are a couple that I’m set on in the absence of any major issue that might crop up. And both are firmly in the category of growth stocks.
Bunzl
When shares in Bunzl (LSE:BNZL) fell 14% in the first half of March, I started buying the stock for my portfolio. But – as is always the way – I didn’t manage to get as much as I’d have liked.
On the face of it, 2024 wasn’t a great year for the FTSE 100 distribution company. Revenues fell 0.4%, which isn’t what investors look for in a growth stock. This however, was largely due to the firm passing on lower prices from suppliers. As a result, operating profits grew 2.2% on an adjusted basis.
Looking ahead, I’m impressed by Bunzl’s plans for growth. It’s aiming to invest £700m a year into a combination of acquisitions and shareholder returns.
Attempting to grow in this way brings the risk of destroying shareholder value by overpaying to acquire a business. But the company operates in a fragmented market, which should help.
This doesn’t entirely eliminate the risk and investors will want to see returns on equity staying strong over time. At today’s prices though, I’m looking to add to my existing Bunzl investment.
AG Barr
The soft drinks market doesn’t stand out as a particularly growth-focused industry – and it isn’t. But I think AG Barr (LSE:BAG) has a number of growth opportunities in front of it.
The most obvious is its revenues, which are forecast to increase by 4.2% a year on average between now and 2028. That doesn’t sound like much, but it isn’t the only source of growth.
Another key opportunity is operating margins. These have reached 12.5%, but are expected to keep expanding as the company completes its integration of Boost Drinks Holdings.
On top of that, there’s a rising dividend. That means investors have three clear sources of growth and I don’t think this is adequately reflected in a price-to-earnings (P/E) ratio of 17.5.
Arguably, what is reflected in the share price is rising costs. With UK inflation set to rise, expanding margins won’t be entirely straightforward and that’s a risk for investors to consider.
I think AG Barr’s core brand – Irn Bru – should give it some protection against this, but we’ll see. In any event, I see the stock as a bargain and I’m looking to add it to my ISA in April.
Growth stocks
When it comes to growth stocks, the UK isn’t the first place most investors look. And there’s clearly some justification for this. Nonetheless, I think there are some very attractive opportunities in places that are going unnoticed. That’s where I’m looking to concentrate my investing in April.
