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2 growth stocks that I would invest in today

If you catch growth stocks at the right time, you could make a lot of money and gain serious bragging rights. The importance is timing, you want to invest when the stocks are still relatively cheap and aren’t overvalued. If you wait too long, the price could shoot up and if you don’t wait long enough, the growth might come to a halt.

But here at Motley Fool we don’t try to time the market in that way. We prefer to invest in companies we believe can grow for the long term. I have my sights set on these two brilliant stocks that continuously seem to defy my expectations.

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Getting sporty

JD Sports (LSE: JD) has had a stellar 2019 and its growth shows no signs of slowing down. In fact, the shares are over 70% higher than they were at the beginning of 2019. There are good reasons for this. JD’s revenue increased almost 50% in the year to February. Pre-tax profit also skyrocketed 15.5% to a very healthy £340m.

I believe JD’s impressive growth strategy is key. The business has continuously increased its store number, adding 29 new stores in the financial year with the main focus being on international growth. Furthermore, menswear brand Pretty Green and shoe retailer Footasylum were both acquired by JD. The businesses were troubled as independent small players but could thrive under the JD umbrella and should aid its growth this year.

The company is confident it will meet its ambitious profit expectations with a predicted rise in earnings of 12% this year. I also see JD’s very modest dividend yield of 0.28% as a positive: it’s investing more in the business and working on maintaining growth before paying out larger dividends. Obviously, the company isn’t immune to the struggles of the high street or Brexit, but its growth focus in yielding rewards.

Going vegan

Greggs (LSE: GRG) has been on a huge growth spurt this year, aided by the infamous vegan sausage roll introduced to the menu in January. As thousands of people are turning to veganism or becoming ‘flexitarians’, Greggs kept up with the demand and the pastry has been selling well. The share price is up 81% already this year but there’s more to it than one product launch.

Total sales have risen by 15% in the first four months of 2019, definitely an improvement from last year’s 4.7% rise and it has been helped by the fact that it’s now more accessible than ever. It’s currently trialling home delivery on the Just Eat app in major cities. If this is a success, we could see an even larger increase in profits by the end of the year.

Greggs shares are currently priced at around 2,368p with a high P/E ratio of 28. This P/E can be explained by the rapid growth and positive net cash position. However, I don’t believe that the stock is overvalued. The current yield is only 1.6% but the company has been paying this consistently for many years, making it a reliable return. And much of Greggs’ appeal is down to its share price growth.

If you had invested five years ago, you would have tripled your money by now. With the stock rising 340% in five years, I see this as positive momentum that’s consistent and reliable. I would invest now to make the most of the ongoing growth opportunity.

Capital Gains

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fional owns shares of JD Sports Fashion. 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.