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2 FTSE 100 growth stocks to put in your ISA

This article reveals two FTSE 100 growth greats investors may want to buy ahead of the 2017/18 ISA deadline.

Box beauty

Smurfit Kappa Group (LSE: SKG) saw its share price enter lift-off during Wednesday trading on the back of fresh takeover speculation. The share was last 6% higher on the day.

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The packaging play has been in the headlines in recent sessions after rejecting the overtures of US rival International Paper. The Footsie firm, which rebuffed an €8.6bn takeover bid yesterday, affirmed its opposition to the deal today by commenting that “the board has unanimously rejected it on the basis that it fails entirely to reflect the group’s superior prospects as an independent business and represents a valuation multiple significantly below recent comparable transactions.”

One should not be surprised if the North American giant swoops back in despite being rebuffed. As the boffins at UBS point out, a tie-up would give International Paper a far superior foothold in Europe where Smurfit Kappa is of course a major player. The US company sources just a quarter of group profits from Europe and Russia right now.

And the deal would make sense given that both businesses are giants in the production of Kraftliner packaging in their respective markets.

In demand

Smurfit Kappa hasn’t been without its share of problems in recent times as a cocktail of rising costs has hit profits growth. While revenues improved 5% year-on-year in 2017, to €8.56bn, pre-tax profit slumped 12% to €576m.

However, it is finally beginning to turn the corner. It is proving increasingly successful in recovering these higher input costs from its customers. And it is also witnessing rising demand for its products, helped by the supply crunch washing over the market.

In this environment City brokers are expecting earnings to burst higher again from this year onwards, and they are forecasting bottom line growth of 26% in 2018 and 4% next year. And I am confident Smurfit Kappa’s commitment to M&A should keep profits on an upward trajectory further out.

Investors should notice that the business can be picked up on a forward P/E ratio of just 15.3 times. This is far too low given the cardboard box maker’s bright earnings picture, not to mention the possibility of a potential suitor coming back with an improved bid.

A quality selection

Those seeking strong growth bets from the FTSE 100 should also give Intertek Group (LSE: ITRK) a close look today.

Sure, City brokers may be expecting earnings to edge just 2% higher in 2018, marking a departure from the double-digit rises of recent years. Another 8% rise is forecast for next year. But I am convinced the bulging quality assurance market (which Intertek currently values at $250m) provides plenty of opportunity for the business to keep grinding out profits progress year after year.

The company saw organic revenues at its Products and Trade-related divisions — which collectively account for more than nine-tenths of total earnings — rise 4.8% in 2017, the firm advised this week. And like Smurfit Kappa, Intertek remains committed to hunting down acquisitions to keep sales moving on.

I believe the business is worth a serious look even in spite of its high forward P/E ratio of 25.2 times.

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