2 FTSE 100 growth heroes you should consider buying today

Royston Wild discusses two FTSE 100 (INDEXFTSE: UKX) stars with excellent growth potential.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Fear over the escalating diplomatic crisis between the US and North Korea has propelled demand for safe-haven assets like precious metals higher in recent sessions.

Gold recently rose to within a whisker of the psychologically-critical $1,300 per ounce marker, the highest since mid-June. And silver values have also stepped to their highest for around two months, the dual-role metal moving back above $17 per ounce in end-of-week trade.

The mounting concern over conflict on the Korean peninsula has played into the hands of London’s quoted gold and silver miner producers, including FTSE 100 constituent Fresnillo (LSE: FRES) whose share value has also leapt to its highest since June this week.

And the stand-off between Washington and Pyongyang looks unlikely to calm down any time soon. On Friday President Trump’s no-nonsense dialogue went up another notch, the commander-in-chief Tweeting that “military solutions are now in place… should North Korea act unwisely.”

Not only is the intrigue surrounding Trump’s White House, both at home and abroad, likely to keep the nerves of traders and investors under some strain, but a number of broader geopolitical and economic concerns across the globe, including fears that stock markets are now looking overbought, should also provide gold and silver with sustained support.

Against this backcloth, the City expects earnings to march higher at Fresnillo, helped by soaring production levels (the Mexican digger saw total silver volumes advance 11% between January-June, to 28m ounces).

The 19% profits rise currently forecast for 2017 leaves the business dealing on a forward P/E ratio of 30.5 times, sailing above the British blue-chip prospective average of 15 times. However, I reckon the strong possibility that precious metals values could really take off in the near future still makes Fresnillo worthy of serious glances right now.

Construct colossal returns

The aforementioned washout across share bourses has seen Taylor Wimpey (LSE: TW) continue to stall following July’s healthy advances. Still, I reckon the homebuilder remains an attractive pick right now, particularly given its rock-bottom valuations.

An expected 4% earnings rise in 2017 leaves the Footsie play dealing on a forward P/E multiple bang on the widely-regarded bargain watermark of 10 times. And Taylor Wimpey also offers a lot for dividend chasers to get excited about, City predictions of a 13.2p per share reward for this year creating a monumental 7% yield.

Those expecting the firm to generate the stunning profits growth of previous years are likely to end up disappointed as clampdowns on the buy-to-let sector, combined with the impact of political and economic strife on many would-be purchasers’ appetite, dents home sales. And rising construction costs are likely to dampen bottom-line growth across the sector.

Still, I am convinced the likes of Taylor Wimpey should remain reliable earnings generators in the years to come as supportive lending conditions keep buying activity for first-time purchasers ticking over. And government failure to address the UK’s shortage of new houses should prevent property values slumping.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild owns shares in Taylor Wimpey. The Motley Fool UK has no position in any of the shares mentioned. 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.

More on Investing Articles

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

How I’d invest my first £20k ISA to target £4,900 a year from dividend shares

Looking for dividend shares in a new Stocks and Shares ISA, and want diversification too? Here's how I'd go about…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »