The Motley Fool

3 super growth stocks? ARM Holdings plc, Emis Group plc and RWS Holdings plc

One of the challenges for any company is maintaining a high rate of long-term earnings growth. Certainly, in the first few years of existence it’s possible to achieve sky-high rates of growth, but as the business matures and comparisons become more difficult, it can be challenging to maintain an above-average rate of profit growth.

This is a key reason why ARM (LSE: ARM) is such an appealing stock. It’s now becoming a more mature business, offering a relatively stable financial outlook as well as increasing dividends at a rapid rate. However, it still offers a stunning rate of growth, with ARM’s bottom line forecast to increase by 43% in the current year and by a further 15% next year. And with ARM investing heavily in new market segments such as the Internet of Things, its longer-term growth potential remains highly encouraging.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

With ARM trading on a price-to-earnings growth (PEG) ratio of just 1.5, it seems to offer substantial upside potential. Therefore, it remains a super growth stock worth buying for the long term.

Capital gain potential

Also offering upbeat growth prospects is patent translation specialist RWS (LSE: RWS). Its bottom line is forecast to rise by 27% in the current year and by a further 8% next year. Furthermore, RWS has a relatively wide economic moat and with it having a relatively consistent track record of growth, it seems to be an excellent growth play for the long term.

While RWS trades on a P/E ratio of 21, it still offers significant capital gain potential. Investor sentiment remains strong, as evidenced by its share price rise of 58% in the last year. And while RWS is expected to raise dividends per share by 6% this year so that it yields 2.4%, it remains an excellent growth play that has been able to increase its bottom line at an annualised rate of 10% over the last five financial years.

Wait and see

However during this period, connected healthcare software specialist Emis (LSE: EMIS) has been able to grow its bottom line at an even more appealing annualised rate of 12.4%. This shows that it has been an excellent growth play, with its share price soaring by 98% during the last five years.

Looking ahead, Emis is forecast to post strong growth numbers. Its earnings are expected to rise by 8% in the current year and by a further 9% next year. However, with the company’s shares trading on a P/E ratio of 20.7, Emis appears to be rather fully valued at the moment.

Certainly, with uncertainty among investors regarding the global macroeconomic outlook being high, more reliable growth stocks such as Emis could be of real value. But with other growth plays offering better value for money, it may be prudent to await a lower share price before piling-in to Emis.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Peter Stephens owns shares of ARM Holdings and RWS. The Motley Fool UK has recommended ARM Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.