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ISA watch! A growth stock I’m expecting to release terrific trading news in March

It’d be a brave man to predict with any certainty that battered confidence across financial markets will improve in March. Investor appetite can be notoriously fickle but, right now, cases of the coronavirus are spreading globally. The subsequent sense of panic has been exacerbated by a spike in the number of profit warnings being issued too.

However, there are a number of companies I expect to release positive trading releases in the days ahead. These are updates that could help the share prices of some companies gain ground should broader market fears moderate. And one of them is Marshalls (LSE: MSLH).

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Good news!

While the wider UK construction market has been in the doldrums of late, landscaping products specialist Marshalls has kept on releasing robust trading statements. It’s why the company’s share price boomed 85% during the course of 2019.

The FTSE 250 firm kept the run going with a solid year-end trading update. And I’m expecting a sunny commentary on current activity when preliminaries are unpackaged on Thursday, 12 March.

Latest purchasing managers index (PMI) data for the construction industry showed a sector still in decline. A reading of 48.4 for January showed a market still shrinking below the inflationary/contractionary watermark of 50, sure. But it was a huge upgrade from a reading of 44.2 in December and was the best result since last April.

It’s quite possible the reading will be even better in January. This will be the first full month since the Conservatives won late 2019’s general election, an event which axed the chances of a destructive no-deal Brexit last month. Keep an eye on the next PMI release for construction firms due Tuesday, 3 March. This could add more fuel to the Marshalls share price prior to that upcoming annual statement.

A profits powerhouse

Marshalls certainly impressed with its pre-close mid-January trading statement. Then it advised revenues leapt 10% year-on-year in 2019, thanks to acquisition of Edenhall in December 2018. The move to buy one of the country’s major producers of concrete-facing bricks boosts its exposure to the newbuild homes market, and will likely prove a wise move given Britain’s need to turbocharge homebuilding rates during the next decade.

Even without the contribution of its blockbuster acquisition, Marshalls’ performance last year was encouraging given tough construction market conditions. Annual revenues, excluding Edenhall, rose 3% last year.

It’s no wonder City analysts expect Marshalls’ long-running record of annual growth to continue. Bottom-line rises of 7% and 6% are forecasted for this year and next respectively. The company’s recent comments that  “the underlying indicators in the New Build Housing, Road, Rail and Water Management markets remain supportive” have no doubt boosted broker confidence too.

A forward price-to-earnings (P/E) ratio of 25.3 times might make Marshalls look expensive on paper. However, I consider its resilience in tough market conditions to be worthy of a healthy premium.

It’s a brilliant buy before the likely release of more top trading news in March, in my opinion.

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Royston Wild has no position in any of the 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.