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Provident Financial plc and this growth monster could make you stunningly rich

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The rise of the FTSE 100 in recent years means that finding growth stocks at reasonable prices has become more challenging. Even after the index’s fall in recent weeks, it continues to trade at what is a relatively high level. As such, unearthing growth bargains is more difficult than it has been for a significant period of time.

However, Provident Financial (LSE: PFG) now seems to be worth buying after what has been a difficult period for the company. Its recent update showed that it is now making progress with its turnaround. But it’s not the only growth stock that could be worth buying today, with another stock delivering an impressive update on Monday.

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Strong performance

The company in question is integrated corporate e-learning services and technologies provider Learning Technologies Group (LSE: LTG). It reported strong 2017 results which showed a rise in revenue of 84% versus the prior year. Part of the reason for this was the company’s account management approach. It has caused a broadening and deepening of client relationships, which has increased average revenue per client and driven strong organic growth.

The business was able to diversify its revenue during the year. Exposure to a wider range of geographies, market sectors and technical capabilities may mean that it has a more resilient outlook. In the current financial year it is trading ahead of market expectations and seems to be well-placed to generate further growth.

In fact, Learning Technologies is expected to post a rise in earnings of 18% in the next financial year. This puts it on a price-to-earnings growth (PEG) ratio of 1.8, which suggests that it offers good value for money. With the company having a solid track record of growth in the last three years, it seems to offer upside potential at the present time.

Recovery potential

Also offering growth at a reasonable price is Provident Financial. As mentioned, the company released an update recently which showed that it may now offer an improving outlook after what has been a difficult period.

Notably, it has raised capital in order to make provision for the FCA investigations which have been ongoing in recent months. Furthermore, it seems to be making progress in turning around the underperforming parts of its business. This seems to have changed the viewpoint of a large number of investors, since the company’s stock price has gained 38% in the last month.

However, Provident Financial still offers a wide margin of safety even after its recent gains. It trades on a price-to-earnings growth (PEG) ratio of just 0.3, which suggests that it could offer upside potential. While still a long way off being fully recovered, it seems to now be on the path to a successful turnaround and could be worth buying for the long term. Although volatility may be high, its low valuation suggests that it could be one of the more attractive stocks in the index at the present time.

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Peter Stephens has no position in any 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.

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