UK stocks, as a whole, have made investors a decent amount of money recently. If we look at the FTSE All-Share index, for example, its five-year return to the end of October was 99%, meaning that investors with exposure to this index basically doubled their money over that period.
There are a lot of individual UK stocks that delivered much higher returns over that timeframe, however. Here’s a look at two that have made investors a big amount of money over the last five years.
A fast-growing defence company no one has heard of
First up, we have MS International (LSE: MSI). It’s an engineering company that operates in four key areas: defence, steel forgings, corporate branding, and petrol station superstructures.
Now, this may not sound like the most exciting company. But wait until you see its share price.
Over the last five years, it has risen from around 117p to 1,550p – a gain of about 1,225%. This means that anyone who stuck £5,000 on the stock five years ago would now have over £66,000 (they would have also received dividends).
Can this stock keep rising? I think so.
What looks really interesting to me here is the company’s defence exposure (70% of group turnover). This could potentially be a huge source of growth in the years ahead as NATO countries spend more on defence.
Note that last month, the company won a $34.5m contract with the US Navy to supply stabilised gun mounts. Given that it has a market cap of just £262m today, that’s a huge deal.
Zooming in on the valuation, it isn’t high. Last financial year, earnings were 90p per share, so the stock trades on a trailing price-to-earnings (P/E) ratio of just 18.
A risk here is lumpy revenues. In the defence industry, sales cycles can be long.
Taking a long-term view though, I see a lot of potential. I believe the stock is worth considering as a growth play.
Improving transportation systems in the UK and abroad
The other stock I want to highlight is Journeo (LSE: JNEO). It’s an ‘intelligent systems’ provider that offers connected solutions for the transportation industry.
With its solutions, customers (bus and rail operators, airports, etc) can reduce costs and improve efficiency significantly. Note that it operates in the UK, Europe, and North America.
Like MS International, Journeo has seen its share price surge in recent years. Over the last five years, it has climbed from 47p to 490p, turning £5,000 into around £52,000.
I wouldn’t be surprised to see it continue climbing in the years ahead. In September, the company said it had a £80m sales pipeline (its market cap is only £87m).
Now, lumpy revenues are a risk here too. These could lead to share price volatility.
Those with a long-term mindset, however, may want to take a closer look at this stock. In a world that’s rapidly undergoing digital transformation, I see a lot of growth potential.
But there are plenty of other exciting growth stocks that are also worth checking out right now.
