2 quality growth stocks I’d buy right now

Kevin Godbold thinks two companies that focus on supporting modern business with tech solutions could be strong long-term bets.

| 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.

We’ll have to wait until 26 July for half-year results from Quartix Holdings (LSE: QTX), but today the subscription-based vehicle tracking system provider issued a positive update on trading for the first six months to the end of June.

A broad customer base

The company reckons more than 10,000 fleet companies are using its vehicle tracking system, a figure growing at around 130 companies per month, which is a fair clip suggesting plenty of ongoing growth potential.

You’ll find the firm’s customer companies and organisations operating in sectors such as building, construction, excavation, and all the building services contractors as well as transportation-related firms such as truckers, taxis, patrol vehicles and many others. Back in the 1990s and early noughties I used to run an engineering services firm with a fleet of vehicles and it would have been useful to manage the operation with Quartix’s technology and services. I suspect demand will remain robust for some considerable time.

The firm says that trading has been “consistent with achieving market expectations for the year as a whole.” City analysts following the firm have an 8% decline in earnings per share pencilled-in for 2017 and a rise of 14% for 2018, so the firm seems to be on course to hit those figures.

Preserving margins

Underlying operational progress seems robust. New installations of tracking systems jumped up 44% to 14,300 vehicles during the past six months and the firm has 97,000 active vehicle subscriptions across its markets in the UK, France and the US. A recent shift away from low-margin insurance business to concentrate on the core fleet business is going well. The directors vow to “continue to invest in our fleet business in the second half and only add back insurance volume where our quality of service and product innovation mean that we can command attractive margins.”

With such a focus on controlling the quality of margins, I’m optimistic that Quartix can grow profitably from here and see the firm as well worth your further research as a potential long-term growth investment.

A shift to mobile delivers

Meanwhile, half-year results from Taptica International (LSE: TAP) aren’t due until the end of August, but we do know that the firm has been growing fast providing a global end-to-end mobile advertising platform for ad agencies and brands.

Back in March, the firm reported strong full-year results saying that 2016 was the first full year as a mobile-focused business. Mobile delivered 86% of revenue during the year, driving the overall figure for turnover up 66% compared to the year before, and earnings per share shot the lights out with a near 700% rise.

More to come?

Looking forward, City analysts following the firm reckon earnings per share will put on another 31% this year and 7% during 2018. The growth story remains on track and the directors reckon the company continues to gain traction with existing and new household-name clients, such as Amazon, Disney, and Expedia. Most of the company’s revenue originates in the US but a “meaningful contribution” came from the Asia-Pacific region last year too.

I think there is much more to come from Taptica and recommend you aim your investing radar in the firm’s direction for further research.

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.

Kevin Godbold owns shares in Taptica international (LSE: TAP). The Motley Fool UK owns shares of and has recommended Amazon and Walt Disney. The Motley Fool UK has recommended Quartix. 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.

More on Investing Articles

Investing Articles

How much would I need to invest in income shares to earn £300 a month?

What kind of lump sum would be required to earn £300 a month by taking advantage of some of the…

Read more »

Investing For Beginners

Up 31% in a month, could this FTSE 250 stock be getting bought out?

Jon Smith takes a look at speculation that's pushing the share price of a FTSE 250 share higher and considers…

Read more »

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 »