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Get rich and retire early! I’d buy these growth stocks in January and hold them for life

WH Smith (LSE: SMWH) is a share I’d happily buy ahead of Christmas trading details on January 22.

It’s not that I’m expecting blowout numbers from its High Street operations, even though efforts to strip out costs and turn around the top line are progressing. With consumer confidence still on the ropes, it would be a stretch to expect sales here to improve any time soon.

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Rather, I’m excited to see if WH Smith’s Travel division has kept up its impressive momentum of recent times. Profits here surged by double-digit percentages in the last fiscal year (to August 2019), and as the company expands its footprint in airports across the globe, it’s likely that earnings will continue dancing higher.

But that’s not all. Expectations of solid air passenger growth in the years ahead are another reason why I’d happily buy the FTSE 250 firm today and hold its shares forever. The boffins over at Statista, for instance, expect the number of global travellers to rise 4.1% in 2020, despite the probability of more pressure on the global economy. And WH Smith can look forward to the number of potential customers passing through its doors heating up further once current macroeconomic turbulence passes and air traffic increases.

In the more immediate term, City analysts expect the retailer to keep its long record of earnings growth going with a 5% annual improvement in fiscal 2020. A forward P/E ratio of 21.2 times might make it look expensive on paper, but I reckon WH Smith’s aggressive expansion programme makes it worthy of a handsome rating.

In great shape

I believe that the release of pre-close trading numbers from The Gym Group (LSE: GYM) on January 17 could prompt fresh waves of buying here too. The fitness centre operator’s share price has risen 40% since its IPO back in autumn 2015 and I expect it to keep rising as the number of keep-fit junkies using its dumbbells and treadmills surge.

The low cost fitness segment populated by the likes of The Gym Group is booming at an impressive rate, and according to Statista, revenues here almost quadrupled in the five years to 2018 to £598m. This particular operator is the country’s second-largest with around 25% of the market, and it has designs on growing its share through steady expansion (it opened eight new gyms in the first half of 2019 alone to take its total to 165).

No wonder City brokers expect earnings at The Gym Group to boom 26% in 2020. The firm saw its membership grow more than 10% in the six months to June and there’s plenty of reason to expect it to keep swelling over the next decade. A bargain-basement forward price-to-earnings growth (PEG) ratio of 1 underlines its position as a top stock to buy today too.

A top stock with enormous growth potential

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended The Gym Group and WH Smith. 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.