These FTSE growth stocks look like hidden gems to me

These growth stocks have been doing well for investors, but our writer thinks the best is yet to come and he’d like to buy when he has some spare cash.

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When it comes to picking growth stocks, sticking to the FTSE 100 and/or the mega-cap tech titans from across the pond feels comfortable. However, this does mean potentially overlooking many great companies from lower down the market spectrum.

Strong demand

Meat supplier Cranswick (LSE: CWK) is one example, despite having grown steadily over the years.

Based on its most recent statement, I’m confident this expansion will continue. Back in July, the company reported a near-15% rise in revenue over Q1. That’s impressive considering the Ukraine war had tightened pig supply in the UK, pushing prices up. In fact, strong demand for fresh pork and gourmet products led management to raise its forecasts for the full year.

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Looking ahead, I also think Cranswick’s decision to diversify into the lucrative pet foods business following its acquisition of Grove Pet Foods in 2022 is positive and should boost its bottom line and, ultimately, its share price.

Outperformer

While I regard this as primarily a growth stock, its income credentials can’t be overlook. Put simply, this company has consistently hiked its annual dividend for many years now. To me, that signals a very healthy business.

Of course, this is not to say that dividends won’t be cut going forward. Nothing is a given in investing.

Investors also need to be aware that Cranswick stock currently changes hands for nearly 17 times forecast earnings. That’s not ludicrously expensive, but nor is it screamingly cheap.

Due to this, I’m not expecting the share price to rocket anytime soon. Indeed, the 15% rise seen in 2023 so far vastly outperforms the index return and suggests that some decent half-year numbers — due on 21 November — might already priced in.

It might be best for me to wait and see if some profits are banked on the day.

Created with Highcharts 11.4.3Cranswick Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Slice of cake?

Spreading my money around the market is one of the best ways to reduce risk. So it makes sense to look for hidden gems in other sectors.

For something completely different, I offer up uranium buyer Yellow Cake (LSE: YCA). Readers probably don’t need me to tell them that the £1.2bn-cap has no control over the price of what it stores. So potential holders should expect a rollercoaster ride.

That said, getting direct exposure to the grey metal has been a great bet recently. Its price rose by a third over the last quarter. Consequently, the shares are up over 40% this year.

Again, contrast this with the FTSE 250‘s 7% fall. It’s another example of why stock-picking has the potential (key word) to deliver superior returns over an index fund.

Created with Highcharts 11.4.3Yellow Cake Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Constrained supply

Now, I don’t know where Yellow Cake shares might go in the near term, but I’m tempted to take a stake.

Uranium is used in nuclear power, considered to be one of the most environmentally friendly ways of generating electricity. As such, I anticipate demand to increase in the years ahead, given the green energy drive. Interestingly, supply is already constrained and could lead to an absolute scramble between buyers before long.

Throw in some geopolitical risks in producing countries such as Russia and Niger and I’d be willing to buy here when cash becomes available.

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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.

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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