- A growth stock is the stock of a company whose earnings and revenues are likely to increase at a substantially higher rate than the industrial average.
- PGG will release its interim results for the 6 months to 31 December 2021 on 22 February 2022.
- Skellerup Holdings expects its NPAT to be 10% above pcp for H1 FY22.
Growth stocks are companies that experience growth in earnings and profits at a substantially higher rate than the industrial average. These stocks are issued by companies that show high potential for development.
Investors can accumulate wealth via capital appreciation by investing in these stocks. However, growth stocks are deemed to be risky due to the developing nature of the issuing company.
Amid this backdrop, let’s look at 3 NZX growth stocks that can be considered this month.
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Rakon Limited (NZX:RAK)
Advanced frequency control and timing solutions provider Rakon expects to attain an underlying EBITDA between $44 million-$49million in FY22, up from the previous range of $39 million to $44 million.
The Group announced on Tuesday that it has selected Sinead Horgan as its Non-Executive Director. Ms Horgan’s appointment would increase the present number of directors to 8.
The business is likely to do well through FY22 if it is able to handle supply chain risks and capacity and get away with COVID-19-related disturbances.
RAK ended the day 11.11% in green to close at $1.8.
PGG Wrightson Limited (NZX:PGW)
A key supplier to the NZ agricultural sector, PGW, witnessed a 32.8% rise in operating EBITDA at $56 million and delivered an NPAT of $22.7 million in FY21. It experienced remarkable spring trading in H1 FY22. Subsequently, the Group raised its guidance from $56 million to nearly $58 million at the operating EBITDA level.
The Group expects the outlook for the rural sector to be positive with encouraging confidence of farmers and growers. PGW remains cautious of supply chain constraints and subsequent market impacts amid the COVID-19 pandemic.
The Group notified on Friday that it would release its interim results for the 6 months to 31 December 2021 on 22 February 2022.
PGG ended the day 4.28% in red to close at $5.15.
Skellerup Holdings Limited (NZX:SKL)
A distributor and manufacturer of polymer products and vacuum systems, Skellerup, reported a record 38% rise in NPAT to $40.2 million and a 22% increase in operating cashflow of $58.8 million in FY21 on pcp. The Group purchased plastics products developer and manufacturer Tablot Technologies in August 2021 to further grow.
The Group anticipates its NPAT to be 10% above pcp for H1 FY22.
SKL will release its results for the half year ended 31 December 2021 on 17 February 2022.
SKL ended the day 0.52% in green to close at $5.76.
Investing in growth stocks require judgement through a comprehensive analysis of companies and prevailing market conditions for the company to produce profits.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)