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This growth stock has surged 10% today! I think it’s too good for ISA investors to miss

Begbies Traynor Group (LSE: BEG) has been yet another stock to suffer severe bouts of investor-selling of late.

The FTSE 250 stock recent plummeted to levels not seen since last June, as fears over the coronavirus exploded. This may seem odd, given any severe economic disruption could significantly bolster the amount of business at the corporate insolvency specialist.

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Indeed, the possible impact of COVID-19 on the domestic economy was underlined by a government report released today. It said it could take two to three months for a widespread infection to peak from first infection. It would take another two or three months for levels to decline from these highs too.

Moreover, Downing Street said that up to a fifth of the British workforce could be absent from work at the same time when the infection rate peaks. Medical experts have said a widespread coronavirus attack on these shores is “highly likely”.

The Brexit effect

Yesterday, the OECD downgraded its UK growth forecasts (to just 0.8%) on the back of the coronavirus tragedy. And it’s clear further reductions could be in the offing should the country experience a serious panedemic.

It’s not just the recent viral outbreak that threatens to send the number of company insolvencies through the roof though. The negative impact of Brexit on domestic industry has been there for all to see in recent times.

The possibility of uncertainty on this front persisting through 2020 at least — or the UK even choosing to embark on a disastrous no-deal withdrawal in the coming months — threatens to keep the domestic economy under pressure too.

Begbies Traynor’s third-quarter financials released today perfectly illustrate this Brexit effect. The firm said it continued to enjoy “strong growth in revenue and profit” during the three months to January and that, as a result, it’s “confident of delivering results at least in line with expectations for the year as a whole.”

Begbies Traynor quoted Insolvency Service data which show the number of insolvencies in the UK leap 7% in 2019, to 17,196.

A top dip buy

It’s no surprise to see the company’s share price leap following the release. It’s currently 10% higher from Monday’s close and clearly has plenty more room to rise in the weeks and months ahead.

Yet despite this strength, Begbies Traynor is still pretty cheap. It trades on a sub-1 price-to-earnings growth (or PEG) ratio of 0.8 for the fiscal year ending April. The business carries a chunky 3.3% forward dividend yield too.

City analysts believe that fertile trading conditions, allied with the contribution of its busy acquisition drive, should keep annual profits rising beyond the medium term too. They forecast an 18% bottom-line rise in fiscal 2020 and another 17% jump next year.

If you’re looking for brilliant dip buys, I reckon Begbies Traynor is one of the best in today’s climate.

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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.