UK stocks have been volatile recently. This is particularly true in the small-cap area of the market. Here, many shares have experienced wild swings over the last couple of months.
Personally, I love this kind of volatility. That’s because it tends to throw up fantastic buying opportunities for long-term investors like me. With that in mind, here’s a look at three ‘high-growth’ UK stocks I’d buy today.
A top UK FinTech stock
One UK stock that strikes me as a buy right now is Alpha FX (LSE:AFX). It’s a fast-growing FinTech company that specialises in foreign exchange management and corporate payment solutions.
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There are two main reasons I like AFX. The first is that the company’s growing at a phenomenal rate. Revenue for the six months to 30 June, for example, was up 90% year-on-year.
The second is that the company’s ‘founder-led’. Research shows that founder-led companies quite often turn out to be good long-term investments. To date, AFX CEO Morgan Tillbrook has certainly shown to be an adept leader.
This stock does sport a higher valuation. Currently, it has a P/E ratio of around 42, which adds risk. I’m comfortable with this though, given the company’s rate of growth and historical track record.
Under-the-radar tech stock
Another stock I like the look of right now is Cerillion (LSE: CER). It’s an under-the-radar technology company that offers billing, charging and customer relationship management software solutions.
This company’s also growing rapidly. Between FY2016 and FY2020, for example, revenue increased nearly 150%. For the year ended 30 September, analysts expect revenue growth of 23%.
Earlier this week, Cerillion posted a very encouraging trading update. This told investors it has a “strong pipeline” of new business opportunities from both existing and prospective new customers and remains well-positioned as it enters the new financial year. This leads me to believe the outlook for the stock is attractive.
As with AFX, there’s some valuation risk here. Currently, the stock sports a forward-looking P/E ratio of about 30. So if growth slows, the stock could fall.
I don’t see this valuation as a deal-breaker however, as Cerillion appears to be a high-quality business.
Poised for strong growth
Finally, a third UK stock I’d buy right now is Impax Asset Management (LSE: IPX). It’s a niche investment firm that specialises in sustainable strategies.
The reason I like this stock is quite simple. Today, interest in sustainable investing is booming. All over the world, investors have decided that they want to invest in companies that make a positive contribution to society. Impax is benefitting from this trend.
The increased interest in sustainable investing is reflected in Impax’s recent results. For the year to 30 September, the group saw record inflows of £10bn.
“Asset owner interest in the transition to a more sustainable economy continues to build. As an authentic, specialist investor with global reach, Impax has a strong foundation for further expansion,” said CEO Ian Simm recently.
A key risk here is that earnings could take a hit if global equity markets fall. This could hit the share price.
But with the stock currently more than 20% off its recent highs and now trading on a forward-looking P/E ratio of around 25, I think the risk/reward proposition is attractive.
