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Two growth stocks I’d buy and hold for 10 years

News that trade is picking up at Tarsus Group (LSE: TRS) convinces me the international business-to-business media specialist is a growth stock worth checking out today.

The London-based business advised last week that trading during the traditionally-stronger second half of the fiscal year had been in line with expectations, “with key events performing well and buyers up 7%.”

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Tarsus lauded the strong performances of Connect Expo and Labelexpo Europe in the period, two of the firm’s biggest events, and it still has key events such as the Dubai Airshow to come. And it said that, for 2017 as a whole, like-for-like bookings are up 8%, so far, on the previous year.

Chief executive Douglas Emslie commented: “Our busier second half of the year has been strong, as expected, with our largest shows continuing to make good progress.

We are delighted by the performance of the more recent additions to the Group’s portfolio in the key markets of the Americas and China, where we are progressively scaling the business,” he added, underlining the “brilliant” long-term growth opportunities created by its ongoing expansion programme.

City brokers expect Tarsus to record a 75% earnings rise in 2017, although the bottom line is predicted to sink 32% next year.

However, I reckon today’s strong update could lead to hefty upgrades to next year’s anticipated numbers. And given the company’s ultra low valuations (it deals on a prospective P/E rating of just 11.5 times), this could provide the rocket fuel for Tarsus’s share price to head for the skies.

Warm greetings

I am also convinced that, with the pressure on Britons’ wallets likely to intensify in the months and years ahead, that splashing the cash on Card Factory (LSE: CARD) could be an extremely sage decision.

The greetings card giant saw its share price collapse late last month as a rising cost base forced profits to slump in the first fiscal half. Pre-tax profits clocked in at £23.2m between February and July, down 14.1% year-on-year, with the impact of adverse foreign exchange effects, the introduction of the national living wage, and the heavy investment the retailer is making in its store network and infrastructure all smacking the bottom line.

The City expects the aforementioned cost pressures to drive earnings 1% lower in the year to January 2018. But the steady revenues rise is expected to propel profits 4% higher in the following 12-month period.

Current projections leave Card Factory dealing on a forward P/E ratio of 16.1 times, which I consider to be pretty good value considering the retailer’s exciting growth strategy.

As I said, I expect the twin troubles of rising inflation and stagnant wages to keep revenues at the retailer bubbling higher (these increased 3.1% on a like-for-like basis during February-July). And the retailer is investing wisely to steal takings from its more expensive rivals on the high street.

Card Factory now operates around 900 stores – spanning the length and breadth of the country – and remains on course to open another 50 outlets in the current fiscal year alone. Moreover, its attack on the lucrative online market is also having great success, with sales at increasing 30% in the first half. I am convinced these steps should dole out solid profits growth in the coming years.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Tarsus Group. 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.

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