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This FTSE 250 growth stock just hit an all-time high. Here’s why I’m not selling yet

Shares in FTSE 250 stock Avon Rubber (LSE: AVON) have been setting fresh all-time highs in recent weeks. That’s because investors have become increasingly convinced the company is a safe destination for their cash. Based on today’s half-year numbers from the high-tech, gas mask maker, this confidence doesn’t look misplaced.

On a roll

At a time when most investors are scrambling for cover as companies begin reporting on trading over the coronavirus pandemic, the latest news from Avon really stands out. Revenue hit £94.7m in the six-month period. This was a rise of 28.7% on that achieved over the same period last year.   Roughly two-thirds of this growth came from the company’s acquisition of US conglomerate 3M’s ballistic protection business (Helmets and Armour) in January. Interestingly, this deal was part of the reason Terry Smith decided to jettison the latter from the highly successful Fundsmith Equity fund late last year.

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Elsewhere, decent market conditions also led to a strong revenue performance from the company’s milkrite/InterPuls business. On top of all this, the FTSE 250 stock has inked two big body armour contracts with the US Department of Defence over the period. Adjusted pre-tax profit came in a superb 67% higher at £14.7m.  Given the above, it’s perhaps no surprise the interim dividend has been raised. Even so, a 30% increase to just over 9p per share reflects just how confident management is on the company’s progress. 

Naturally, Avon’s quality is reflected in its valuation. A price-to-earnings (P/E) ratio of 30 for the current financial year means new investors will need to dig deep.

Nevertheless, the bullish tone of today’s statement and robust balance sheet mean I’ve no intention of selling my stake just yet.  

Another rising FTSE 250 star

Another FTSE 250 stock also experiencing great trading at the moment is Computacenter (LSE: CCC). A company perhaps unfamiliar to many private investors, the business provides IT infrastructure services to firms. Like Avon, recent updates from the company have been very positive. 

Having already informed investors that trading over the coronavirus pandemic had been better than expected, the £1.8bn-cap announced it had also secured “some substantial Technology Sourcing contracts” in recent weeks. As a result, Computacenter believes the first half of its financial year will now be “considerably ahead of the same period of last year.” 

This surely bodes well for the share price. Despite bouncing hard recently, the FTSE 250 stock still trades 17% below the all-time highs it hit in February. 

The valuation isn’t excessive either. Right now, Computacenter can be yours for 18 times forecast earnings. That looks a good deal to me. There’s net cash on the balance sheet. It also makes consistently great returns on the money it invests in the business.

If you can look past the company being “unable to provide meaningful guidance” on business over H2, I think Computacenter could be a great long-term buy for growth-focused investors.

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Paul Summers owns shares of Avon Rubber. The Motley Fool UK has recommended Avon Rubber. 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.