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2 beautiful bargain growth stocks I’d buy right now

XP Power (LSE: XPP) has emerged as a stunning momentum play in recent times, the share adding more than 40% in value over the past six months.

The power control component builder gained 8% on Monday alone following the release of exceptional third quarter numbers, meaning the stock is now dealing at record tops above £30 per share. And I believe there is much, much more to come from the Singapore-based business.

XP Power declared that “trading in the third quarter has been robust,” with revenues galloping 34% between July-September to £123.9m. While this reflected the positive impact of currency effects, this was by no means the whole story — at stable exchange rates the top line swelled 21%.

In the nine months ending September, orders were up 44% year-on-year at £137.5m, the business advised. And in quarter three, order intake bulged to £44.1m from £34.2m in the corresponding 2016 period. XP Power commented that “the momentum in our order intake is encouraging, particularly the continued growth we are experiencing in our North American markets.”

On the march

And the company’s bubbly assessment of its end markets suggests that sales should keep on moving higher. It noted: “The group believes it is continuing to take market share as its portfolio of industry-leading power technology products is increasingly designed-in to new equipment by our target customers,” and added that “these design wins will translate in to orders as our customers’ projects move to production phase over the coming years.”

Against this backcloth City brokers expect earnings to sprint higher, and they have forecast growth of 20% and 6% in  2017 and 2018 respectively.

While a subsequent forward P/E ratio of 23 times may indeed look toppy on paper, a corresponding PEG multiple of 1.2 — roughly in line with the bargain barometer of 1 or below — suggests that XP Power actually carries pretty good value relative to its growth prospects.

And with today’s blockbuster release likely to lead to weighty upgrades to current earnings forecasts (XP Power has juiced up its own profits expectations following the strong third quarter performance), I reckon now is a great time to plough into the tech titan.

Build a fortune

The resilience of the British housing market would also encourage me to invest in MJ Gleeson (LSE: GLE) at the present time.

I for one own shares in UK housebuilders (Barratt Developments and Taylor Wimpey while you’re asking) as I believe the country’s yawning lack of new homes should keep on supporting home values long into the future.

MJ Gleeson — whose share price marched to all-time highs above 700p on Monday — itself saw profits boom 17% in the year to June, it announced late last month, reaching £33m. And the low-cost homebuilder advised that “affordability remains very attractive and demand exceeds supply, with buyers queueing on site opening days,” suggesting that earnings should keep on booming.

City analysts certainly think so, and have pencilled in earnings expansion of 9% in the current fiscal period, resulting in a prospective P/E ratio of just 13.3 times. With the construction colossus also sporting a chunky dividend yield of 3.6%, I reckon MJ Gleeson should also be a popular pick with income seekers.

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Royston Wild owns shares in Barratt Developments and Taylor Wimpey. The Motley Fool UK has recommended XP Power. 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.