3 Growth Stocks To Buy On St. Leger Day: ARM Holdings plc, Unilever plc And Banco Santander SA

Here are 3 growth plays that could be worth buying right now: ARM Holdings plc (LON: ARM), Unilever plc (LON: ULVR) and Banco Santander SA (LON: BNC)

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

city

With St. Leger Day upon us, now could be a good time to buy shares in high-quality growth stocks. That’s because, as the old saying goes, St. Leger Day is when a lot of investors return from their summer hiatus and there can be an increase in demand for shares. In turn, this can push share prices up after a summer barren of any capital growth (the FTSE 100 made no gains, for instance, between May and September this year).

Bearing this in mind, here are three high-quality stocks that appear to fit the bill as strong growth plays.

ARM

Technology tends to be a hugely unreliable sector when it comes to bottom line growth. Certainly, there are good times, but when the bad times come they can be very, very bad. However, ARM (LSE: ARM) is perhaps the one UK technology company that is a little different in this respect. That’s because it has a relatively reliable earnings growth profile, with the company delivering strong growth in each of the last four years, and also being forecast to continue to do so in the next two years.

For instance, ARM is due to increase earnings by 10% this year and by 22% next year, both of which are hugely impressive numbers. With shares in the company currently trading on a price to earnings (P/E) ratio of 41.7, it equates to a price to earnings growth (PEG) ratio of 1.5. This highlights reliable growth at a reasonable price.

Unilever

After a disappointing start to the year, shares in Unilever (LSE: ULVR) have recovered strongly to post gains of 9% year-to-date. However, there could be more to come. Certainly, 2014 is set to be something of a disappointment when the company reports its full-year results, with earnings due to be only 1% higher than they were in 2013.

However, 2015 is forecast to be a much better year for the company, with the bottom line pencilled in to increase by 9%. This shows that Unilever remains a solid growth play and, although shares in the company have a P/E ratio of 20.9, they have traded on much higher ratings in the past. This shows that, as well as earnings growth, there could be an upward rating revision, too.

Santander

The most striking aspect of Santander (LSE: BNC) as an investment is undoubtedly its yield. It currently stands at a whopping 7.2%. However, there’s much more to Santander than just a high yield. For instance, it is forecast to increase earnings at a rapid rate, with the bottom line set to rise by 23% in the current year and by 21% next year.

Furthermore, shares in Santander do not appear to be priced for growth. They currently trade on a P/E of 15.9 and, although this is a premium to the FTSE 100 (which has a P/E of 13.9) it still represents good value for money. That’s because when it is combined with the company’s forecast growth rate it equates to a price to earnings growth (PEG) ratio of just 0.7. This appears to represent growth at a very reasonable price.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended shares of ARM Holdings. The Motley Fool UK owns shares of Unilever. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Here’s how I’d follow Warren Buffett to start building passive income in 2025

Ben McPoland highlights one FTSE 250 firm with a strong competitive edge that he thinks can continue rewarding investors with…

Read more »

Investing Articles

Burberry shares: undervalued FTSE gems that are ready to rocket?

Burberry shares soared at the beginning of the week as the takeover rumour mill went into overdrive. Is Paul Summers…

Read more »

US Stock

Here are the latest share price forecasts for S&P 500 giant Amazon

Amazon has generated monster gains for investors over the last decade. And Wall Street analysts believe the S&P 500 stock…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

2 high-yield FTSE 250 shares I’d buy today — and 1 that I’d avoid

UK markets have felt some volatility after last week’s Budget and the FTSE 250 was no stranger to it. Our…

Read more »

Investing Articles

3 reasons the Rolls-Royce share price could soar over the next decade

Sustainable aviation fuel, narrow-body aircraft, and small nuclear reactors could all keep the Rolls-Royce share price climbing over the next…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Here’s how much income I’d get if I invested my entire £20k ISA in cheap BT shares

BT shares are on the up but still cheap, while the FTSE 100 telecoms stock offers a good yield too.…

Read more »

Investing Articles

2 FTSE dividend shares yielding more than 6% with P/Es of less than 9!

Harvey Jones picks out two brilliant FTSE 100 dividend shares that yield more than 6% but are selling at strangely…

Read more »

Investing Articles

Up 105% in a year! Is this rocketing FTSE bank the perfect pick for my Stocks and Shares ISA?

Harvey Jones is drawing up a shortlist of stocks to purchase inside his Stocks and Shares ISA allowance. This FTSE…

Read more »