Five growth stocks to watch amid rising inflation

Highlights

• According to the Resolution Foundation inflation could go as high as 15% by the start of next year.
• The research firm Cornwall Insight has raised its forecast for energy price cap to over £3,600 annually later this year.
• The rising cost of essentials such as energy, food and clothes will increase pressure on the BoE to raise interest rates without pushing the country into a deep recession.

The Bank of England’s monetary policy committee said in June that it expected UK inflation to peak at just over 11% in the last three months of this year, but according to the Resolution Foundation, inflation could go as high as 15% by the start of next year.

This came after the research firm Cornwall Insight raised its forecast for the energy price cap to over £3,600 annually later this year and said it may continue to squeeze household budget until at least 2024. The rising cost of essentials such as energy, food and clothes will increase pressure on the BoE to raise interest rates without pushing the country into a deep recession. 

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On 4 August, the BoE’s monetary policy committee raised UK interest rates for the sixth consecutive month by 50 basis points from 1.25% to 1.75%, the most effective interest rate in 27 years. The committee also warned that inflation could hit 13% as energy prices continue to soar.

However, even though the UK economic outlook has darkened, investors may look for stocks that may offer a better return in the long term. Growth stocks are any share of a company that typically performs better as compared to average growth for the market in the long run. These stocks generally trade at a high Price-to-Earnings (P/E) ratio and are expected to generate high earnings.

Kalkine Media deep drives into three FTSE listed growth stocks that you may look for in the long run.

Telecom Plus Plc (LON: TEP)

The shares of UK-based multi-utility supplier Telecom Plus Plc were down by 2.27% and was trading at GBX 2,150.00 at 08:56 AM (GMT+1) on Friday. With a market cap of £1,744.62 million, the FTSE 250 listed company’s Price-to-Earnings ratio stood at 48.93x.

As of 5 August, Telecom Plus has given a whopping return of 36.11% to its shareholders on a YTD basis, while its return on a one-year basis stands at 112.48%. 

Compass Group Plc (LON: CPG) 

The shares of a multinational contract foodservice company, Compass Group Plc, were trading down by 0.39% at GBX 1,913.50 at 08:59 AM (GMT+1) on Friday. With a market cap of £33,982.76 million, the firms Price-to-Earning (P/E) ratio stood at 46.71x. As of 5 August, Compass Group has given a whopping return of 15.93% to its shareholders on a YTD basis, while its return on a one-year basis stands at 27.35%.

Informa Plc (LON: INF) 

The shares of British publishing, business intelligence and exhibition group Informa Plc were trading down by 1.28% at GBX 587.40 at 09:04 AM (GMT+1) on Friday. With a market cap of £8,618.43 million, INF’s Price-to-Earning (P/E) ratio stood at 190.16x. As of 5 August, Informa Plc has given a return of 13.63% to its shareholders on a YTD basis.

Euromoney Institutional Investor PLC (LON: ERM) 

One of Europe’s most prominent business and financial information company, Euromoney Institutional Investor Plc, were trading up by 0.14 % at GBX 1,456.00 at 09:10 AM (GMT+1) on Friday. With a market cap of £1,589.21 million, ERM’s Price-to-Earning (P/E) ratio stood at 173.61x. As of 5 August, Euromoney Institutional Investor Plc has given a its investors returns of 41.09% on one year basis with its EPS at 0.29. 

BH Macro Limited (LON: BHMG) 

The shares of a closed-ended investment company, BH Macro Limited, which is organized as a feeder fund that invests all its assets directly in the Master Fund, were trading down by 0.58% at GBX 4,315.00 at 09:15 AM (GMT+1) on Friday. With a market cap of £1,278.55 million, the FTSE 250 listed company’s Price-to-Earning (P/E) ratio stands at 69.43x. As of 5 August, BH Macro has given a return of 15.71% to its shareholders on a YTD basis, while its return on a one-year basis stands at 25.99%.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.