Just released: the 3 best growth-focused stocks to consider buying in October [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due to a combination of business performance and potentially attractive share valuation.

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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.

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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.

Premium content from Motley Fool Share Advisor UK

Our monthly Fire Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of growth-focused Fire recommendations, to help Fools build out their portfolios.

“Best Buys Now” Pick #1:

Nike (NYSE:NKE)

  • Nike is the world’s leading sports apparel business – though it’s currently facing some near-term challenges.
  • Sales fell by 10% in its first quarter and are set to fall again by 8-10% in Q2. The company has been tightening supply of some of its major shoe products – includingAir Force 1 and Air Jordan 1 – to prevent discounting.
  • This trend is expected to continue and, while painful from a sales perspective, should keep its brand value high and slowly deliver margin improvement.
  • In Q1, cost discipline and pricing actions helped gross margins expand by 120 basis points to 45.4%, though these benefits are expected to be offset in Q2 by higher promotions to clear excess inventory.
  • Adding to the uncertainty, the company is changing its CEO, with former president of consumer and marketing Elliott Hill rejoining the company after retiring in 2020. Hill boasts 32 years’ experience at Nike, beginning as an intern, and is expected to in his words deliver “bold, innovative products that set us apart in the marketplace”.
  • While the company is struggling due to a mix of internal and external factors, its share price reflects this (down -22% so far this year (1), compared to a buoyant S&P 500). We remain optimistic about the strength of the brand, its products, and marketing capabilities. Additionally, the new chief executive appears to be more of a“product” person that should prioritise new designs that resonate with consumers.
  • We see Nike as currently undervalued and view the recent declines in the share price as a buying opportunity for this sportswear leader.

“Best Buys Now” Pick #2:

Redacted

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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.

The Motley Fool UK has recommended Nike. Mark Stones and Ian Pierce own shares of Nike.

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