2 top growth stocks I’d buy in August

Bilaal Mohamed reckons now could be a good time to buy these exciting growth stocks.

| 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.

Tableware specialist Portmeirion Group (LSE: PMP) this morning announced a very positive set of results for the first half of its financial year, with both revenues and profits enjoying double-digit gains. After a lacklustre performance this year, could this be the kick-start the shares need to go on and outperform the rest of the market?

World-famous brands

The group, based in Stoke-on-Trent at the heart of the world famous Staffordshire Potteries region, is engaged in providing ceramic tableware, cookware, giftware and tabletop accessories. Aside from the Portmeirion brand, the company is also home to other world-famous labels, namely Royal Worcester, Spode, Pimpernel, and newly-acquired Wax Lyrical, the UK’s largest manufacturer of home fragrances.

In this morning’s half-year report the AIM-listed group reported total sales of £33.1m for the six months ended 30 June, 16% ahead of the same period last year. Pre-tax profits for the first half came in at £1.6m, an 18% improvement on last year, with earnings (before interest, taxation, depreciation and amortisation) up 27% to £2.7m, compared to £2.1m in 2016.

Waxing Lyrical

The UK became the group’s largest geographical market this year following the acquisition of Lake District-based Wax Lyrical, and with sales in the US and South Korea, its second and third largest markets, remaining challenging, this would normally be an area of concern. But strong growth in Europe and Asia in particular means the company is reducing its reliance on its three key markets and continuing to diversify its sales to the rest of the world.

Despite its vintage image, I’m pleased to see the business isn’t standing still, introducing new products, launching new ranges, and refreshing and extending existing collections. I think the acquisition of Wax Lyrical was a shrewd one, as this should help drive sales and further diversify the company’s product range. At 14 times forecast earnings, the shares are well worth buying for the long term, in my opinion.

Ageing populations

Another London-listed firm announcing its half-year results this morning was FTSE 100 medical products business ConVatec (LSE: CTEC). I’ve been a fan of the group for some time, and indeed by the close of business yesterday, the shares were up 29% on my original recommendation at the start of 2017.

That said, this morning’s results were frankly a little disappointing. Group revenue rose 0.3% to £831.3m, but operating profit suffered a 7.4% slide to £193.5m as a result of increased expenses, offset by higher sales and margins. Mr Market wasn’t impressed and earlier in the day the shares were down by more than 9%.

But I sense a buying opportunity here, with long-term growth coming from ageing populations and the increased prevalence of the chronic conditions the company’s products help to manage. A P/E rating of 20 isn’t too demanding for a quality firm making inroads into an increasingly large market.

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.

Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended Portmeirion Group. 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

US Stock

The Nvidia share price falls! Here’s what I think happens next for the S&P 500

Jon Smith reviews the overnight results from Nvidia and explains why this could stall the S&P 500 performance through to…

Read more »

Investing Articles

Down 15% today, is this FTSE 100 share too cheap for me to miss?

JD Sports' share price has tanked after the FTSE 100 share released another profit warning. Is this the opportunity I've…

Read more »

Investing Articles

Up 8% today, is this FTSE 100 growth stock a slam-dunk buy for me?

Halma's share price is soaring thanks to another headline-grabbing trading update. Is the FTSE 100 stock now too good for…

Read more »

Investing Articles

With a P/E ratio of just 10.5 is now a brilliant time to buy a cut-price FTSE 250 tracker?

Harvey Jones says a recent dip in the FTSE 250 leaves the index trading at bargain levels. One stock in…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

To build a passive income flow, I’d follow this Warren Buffett approach

Warren Buffett has set up passive income streams most people can only dream about. Our writer sees some practical lessons…

Read more »

Growth Shares

As the boohoo share price falls, could it become a penny stock in 2025?

Jon Smith outlines some of the recent problems involving the boohoo share price and considers if things could get even…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

Here are the worst-performing FTSE 100 shares over the last 5 years

These five FTSE 100 shares have been complete duds over the last half decade. But is there potential for a…

Read more »

Investing Articles

Nvidia stock has tripled this year! Can it keep rising?

Nvidia's latest sales update showed strong growth and the stock's been on a tear so far in 2024. So is…

Read more »