The Motley Fool

2 Neil Woodford growth stocks I’d buy today

Neil Woodford may be better known for his acumen in picking income stocks, but sprinkled throughout his various funds are a handful of growth stocks that look interesting to me. The first of these is Burford Capital (LSE: BUR), whose stock has already risen over 125% in value in the past year but still looks attractively priced.

Burford is a pretty unique business that funds litigation battles, which can drag on for years and cost many millions of dollars, in return for a chunk of the proceeds should its client win any damages. This business has proven a hit with clients across the world and its managers have proven adept at wisely investing their capital.

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...

In the six months to June the company’s income rose from $76.2m to $175.5m year-on-year (y/y) while post-tax profits nearly tripled to $142.7m. A large portion of this astronomical increase in income and profit came from a single case against Argentina following the nationalisation of energy company YPF in 2012.

To date, Burford has invested $18m in pursuing these claims on behalf of foreign investors and has already more than recouped this through the sale of 25% of its stake for a total of $106m. And the best news is that the latest sale valued its investment at some $440m, of which it still owns a 75% stake.

And this claim is far from a one-off as the company has a positive record in many other cases and claimed 11 successful investments in H1 alone. It’s also diversifying its investments away from simple single case litigation financing into funding a portfolio of claims, financing cases where it has recourse to underlying assets should a judgement go against it. And it’s providing legal risk management where it only pays out should a claim go against its client.

Branching out into these new business lines is allowing Burford to make more investments, a record $289m was deployed in H1, and lowers overall risk. With its shares priced at just 14 times forward earnings and plenty of investments being made to fuel future growth, I believe Burford is definitely worth a closer look for growth-hungry investors.

A more familiar business 

A much different Woodford holding I have my eye on is Hostelworld (LSE: HSW). While I may have aged out of Hostel World’s target audience, it was definitely my first port of call when travelling on a budget in my younger days.

Evidently this still holds true for younger generations as bookings in H1 were up 11% y/y while an increase in average booking size led to revenue rising 17% in constant currency terms to €46.6m. Meanwhile, management’s renewed focus on the highly profitable core Hostelworld platform paid off with a 21% increase in its bookings and a 30% increase in group constant currency adjusted EBITDA to €12.9m.

Looking ahead, there is still plenty of growth potential as mobile bookings still only represent half of total bookings and the group invests heavily in expanding its brand awareness with its target audience via ads on Snapchat and the like. The company’s high margins also allow it to pay out a growing dividend that currently yields 4.1%. With growth potential and a nice yield, I think Hostelworld is still an interesting option even with its shares priced at 19 times forward earnings.

“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!

Ian Pierce has no position in any of the shares mentioned. 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.

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.