- Investors looking for the investment opportunity in growth stock should look for companies with a strong business model and excellent cash flow.
- Growth oriented stocks are anticipated to grow at a faster pace than their peers.
- Investors should look for stocks with good management, with excellent business model and strong cash generation ability.
Growth oriented stocks are those businesses that are anticipated to grow at a faster pace, generally above the average growth of the industry. The growth companies deliver higher growth outpacing their peers in earnings and stock performance due to multiple reasons like operating in the sunrise industry like renewable energy or electric vehicles where people are actively adopting company’s product and services.
While investing in growth-oriented stock, investors should do proper due diligence as investing in risky growth-oriented stocks can erode the investors’ wealth. Investors’ should look for stocks with good management, with excellent business model and strong cash generation ability.
Let us look at FTSE listed growth stocks and explore the potential of growth in them:
Alpha FX Group Plc (LON: AFX)
The company provides foreign exchange risk management and alternative banking solution to those business entities which are exposed to currency market risk. The company’s stock is constituent of FTSE AIM 100 index.
During the first six month, ended 30 June 2021, the company reported 89% increase in revenue of £34 million (H1 2020 revenue: £18 million). Except for the tourism and hospitality sector, all other sectors reported a rise in forex activity which led to revenue growth for the company. The company’s alternative banking solutions, which launched a new technology platform in April 2021, achieved higher volumes of payments and subscriptions during the period.
The company’s current market cap stands at £733.03 million as of 26 August 2021. In the last one year, the stock has given a 92.22% return to shareholders.
AO World Plc (LON: AO.)
The company operates the online retailing of home appliances and delivers them via its in-house logistics network.
Company’s total group revenue was up by 62% at £1661 million during the year ended 31 March 2021, with the UK market contributing a major part of the revenue. The group’s adjusted EBITDA, which is a major indicator of company’s profitability was up by 191% at £64 million, driven upward mainly due to consumers pent-up demand and shift towards online shopping.
AO World Plc’s current market cap stands at £1,085.61 million as of 26 August 2021. In the last one year, the stock has given a 14.49% return to shareholders.
AB Dynamics Plc (LON: ABDP)
The company designs develops and supplies the products which are used in safety testing and verification of autonomous vehicles. It also offers testing tracks and various driving simulation software to evaluate different vehicle parameters.
AB Dynamics Plc is the only UK-listed company that operates in a very niche segment of passenger safety vehicles and autonomous driving, which is a sunrise industry within the automobile industry. With the growth of the car safety industry, the company is anticipated to benefit. AB Dynamics Plc reported revenue of £27.3 million during the six-month ended 28 February 2021. The company’s revenue has slightly declined compared to the second half of 2020 due to Covid-19 impact.
The company’s current market cap stands at £412.86 million as of 26 August 2021. In the last one year, the stock has given a 4.29% return to shareholders.
Experian Plc (LON: EXPN)
Experian Plc is a global information company that provides a technology platform for businesses and customers. The company provides data services and tools to understand the customer’s creditworthiness while lending and minimise the risk of fraud. The company has operations in over 37 countries.
The company is one of the leading credit reporting agencies, which has consumer data of over one billion people and businesses, which is used by the banks and financial institutions while lending money to individuals. The company also sells decision analytics and access to credit history and marketing assistance.
Experian Plc’s current market cap stands at £29.35 billion as of 26 August 2021. In the last one year, the stock has given a 14.00% return to shareholders.
Also Read: 5 top FTSE growth stocks for August
Avast Plc (LON: AVST)
The company provides digital security products under the Avast and CCleaner brand name. It operates through two key segments the consumer business and small/mid-sized businesses.
The company is one of the leading consumer cybersecurity brands. It’s revenue and margins are accepted to grow at a faster pace as more people adapt to digital technology. The company’s products are basic essential to protect a large organisation against hackers. Avast Plc has agreed to USD 8.6 billion mergers with the US-based Nortonlifelock Plc creating the largest cybersecurity firm globally.
The company’s current market cap stands at £6,226.42 million as of 26 August 2021. In the last one year, the stock has given 11.10% return to shareholders.
Avon Protection Plc (LON: AVON)
The company manufactures the protective gas mask and other respiratory protection products for defence, and other industrial clients.
The company is a leading manufacturer of protective gear with total order book of USD 221 million as of 31 July 2021. It operates in a very niche segment with very a smaller number of companies manufacturing similar kind products as Avon Protection plc does.
Avon Protection Plc’s current market cap stands at £572.07 million as of 26 August 2021. In the last one year, the stock has given a negative return of 49.57% to shareholders.
CMC Market Plc (LON: CMCX)
The company provides online financial trading services to retail, and institutional client. The company’s platform allows trade in contract for difference and financial spread betting on a range of underlying shares, indices, and forex market.
During the first quarter ended 30 June 2021, the company’s monthly active users remain at the same levels as in 2021. As a result, the board remains confident in achieving net operating income in excess of £330 million for FY 2022.
CMC Market Plc current market cap stands at £1,232.70 million as of 26 August 2021. In the last one year, the stock has given a 29.40% return to shareholders.
Hilton Food Group Plc (LON: HFG)
The company operates in the food packaging business. The company offers various fresh meat products and has main operations in the UK and European countries.
During the half year ended 18 July 2021, the company witnessed higher demand for its products, with the UK red meat business reporting strong growth. Also, the company expects to start a meat and fish plant in New Zealand in the third quarter of 2021.
Hilton Food Group Plc’s current market cap stands at £971.15 million as of 26 August 2021. In the last one year, the stock has given a negative return of 2.70% to shareholders.
B&M European Value Retail (LON: BME)
The company operates the grocery and general merchandise stores under the B&M and Babou brand. It has the main operations in the UK and France.
During the first quarter ended 26 June 2021, the company reported £1188.8 million in group revenue, which is a rise of 3.1% compared to the same period last year. During the period, the company opened seven new B&M stores, and its total stores’ count stand at 1097.
B&M European Value Retail’s current market cap stands at £5,762.84 million as of 26 August 2021. In the last one year, the stock has given a 19.31% return to shareholders.
Dunelm Group Plc (LON: DNLM)
The company offers various home furnishing products. It operates 173 superstores along with two distribution centres; the company also has an online website for its customers.
The company reported total sales of £380.1 million, which is a 43.9% rise for the fourth quarter ended 26 June 2021. The company expects higher consumer demand going forward and hence plans to increase its investment in digital and data capabilities and in-store experience.
Dunelm Group Plc’s current market cap stands at £2,626.90 million as of 26 August 2021. In the last one year, the stock has given a negative return of 3.22% to shareholders.