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3 top (and cheap!) growth stocks I’d buy right now

UDG Healthcare (LSE: UDG) is a share that’s delivered some pretty great double-digit-percentage earnings growth in recent years.

City analysts expect growth to slow in the current period. In the 12 months to September 2019, a 3% rise is being predicted. But the FTSE 250 firm is expected to crank up the pace again from 2020. A 10% advance is pencilled in for then.

UDG is a pretty great growth share to snap up, in my opinion. As a provider of a broad range of outsourced services, like distribution and packaging production, to pharmaceutical and healthcare companies, it has strong exposure to the kind of defensive sector that allows earnings to grow almost each and every year. And thanks to its strong balance sheet, it has the capabilities to build its global base via more M&A to give profits growth that extra boost.

Build a fortune

Right now UDG trades fractionally above the benchmark forward P/E ratio of 15 times that indicates decent value. That’s stunning value for a firm with such a robust growth outlook, in my opinion, but if you’re looking for even cheaper then Grafton Group Units (LSE: GFTU) is worth a serious look.

This FTSE 250 firm deals on a prospective earnings multiple of 12.1 times and, like the aforementioned medical star, also has a history of hot bottom-line growth over the past several years. It’s been able to prove itself as a reliable profits generator thanks to its exposure to foreign climes, the building materials supplier offsetting weakness in the UK with strong growth elsewhere.

Indeed, on these shores Grafton saw sales rise just 3.4% in the three months to December, but in The Netherlands and Belgium these increased 3.6% and 7.4% respectively. And in Ireland these jumped by a staggering 9.8% because of the ripping expansion in the country’s construction industry.

A breath of fresh air

It’s little wonder then that City brokers are predicting additional earnings expansion of 4% in 2018 and 6% next year. And I’m confident that its broad geographic base and strong market conditions therein can keep profits bounding higher.

Another great growth pick to load up on today is Porvair (LSE: PRV). The filtration technologies expert is going from strength to strength and in the last fiscal year (the 12 months ending November 2018), revenues hit record highs of £128.8m, up 11% year-on-year and a result that reflected the quality of its specialist products.

Another reason why the small-cap’s profits column has ripped relentlessly higher, and is expected to continue to do so with rises of 5% predicted for both fiscal 2019 and 2020, is the company’s appetite for acquisitions. It made two major purchases last year, taking total spend on capital projects and M&A over the past five years to £42m, and it has the financial strength to keep its chequebook glowing.

An admission: Porvair’s forward P/E ratio of 20.7 times isn’t exactly cheap on paper. I would argue, though, that the firm’s highly-successful, aggressive growth strategy makes it a steal even at current prices.

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