The Motley Fool

2 Footsie growth stars to supercharge your stocks portfolio

While Wolseley (LSE: WOS) dipped after the release of latest quarterlies, I reckon this further retracement from recent all-time highs (the stock has hit peaks above £50 per share in March) represents a chance for dip buyers to pile-in.

Wolseley said sales detonated 16.7% during February-April, to £4.27bn. While favourable exchange rates boosted the top line by £423m, the plumbing play still witnessed a strong uptick in like-for-like revenues. These rose 6.6%, speeding up from 3.2% in the prior six months.

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...

As a result, Wolseley trading profit was £254m for the third quarter, up 9.5% year-on-year.

Chief executive John Martin noted that “revenue growth in the quarter was good with US residential and commercial markets [were] growing well and industrial markets improving.” Indeed, Wolseley’s Stateside division again proved the group’s strongest performer, and like-for-like sales here jumped 8.5% in the period.

The Nordics moved back into growth, Martin added, although sales in the UK were broadly flat.

And Martin announced that sales have continued rising, commenting that “since the end of the period revenue growth has been broadly in line with the third quarter,” while noting that “gross margins and cost control have been good.”

The company said it therefore expects full-year results to meet current market expectations.

Strong and stable

Wolseley has made no secret that it expects North America to drive profits growth in the years ahead. Indeed, the plumber is about to take the symbolic step of rebranding itself as Ferguson after its US division in the coming months.

This optimism comes as little surprise as construction activity in the world’s largest economy remains robust. While latest data from the Commerce Department showed construction spending fell 1.4% month-on-month in April, the sector remains pretty strong.

Not only was March’s spending figure revised up to show growth of 1.1%, but the Commercial Construction Index released last week came out at 76 for the second quarter, up from 74 for the prior three months and indicating an improving outlook.

The City certainly believes Wolseley is on course to keep generating solid earnings growth, with analysts predicting rises of 20% and 8% for the years to July 2017 and 2018 respectively.

And such projections make it blistering value, in my opinion. Although a forward P/E ratio of 16.5 times nudges above the value benchmark of 15 times or below, a sub-1 PEG reading of 0.8 really suggests that Wolseley is hugely cheap relative to its growth prospects.

Toast this growth titan

A stable North American economy also bodes well for the earnings outlook at Diageo (LSE: DGE). The territory is the drinks giant’s largest single marketplace and is responsible for 37% of total revenues, and the London firm is doubling down on product investment  and  marketing spend to maximise returns from this expanding territory.

Diageo’s recent upward stride (the company’s share price hit fresh record peaks above £24 per share just today) leaves it looking pretty expensive on paper, the company sporting a prospective P/E ratio of 22.8 times.

But I believe the prospect of sustained profits growth, boosted by the benefits brought by sterling’s trek lower, fully justifies a premium rating.

The City has chalked in earnings rises of 18% and 8% in the years to June 2017 and 2018 respectively, and with the firm investing vast sums into market-leading labels like Johnnie Walker whisky and Captain Morgan rum, I reckon healthy growth can be expected long into the future.

“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!

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Diageo. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his 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 click below to discover how you can take advantage of this.