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- For growth stocks, investors need to understand the nature of business along with company's long-term growth drivers.
- Companies with strong growth potential and capable of generating strong returns would be the most sought-after investment options.
Growth investing usually outpace the market as these companies tend to reinvest their earnings rather than distributing it to shareholders in the form of dividends. Filtering growth stocks can be a tad challenging as one needs to understand the nature of business along with the company's long-term growth drivers. Therefore, an investor must seek advice from a professional or consult their financial adviser before putting their money into businesses.
Though in recent times a lot of growth stocks have seen volatility, however, in the longer term, growth stocks have the potential to pack a punch. As we head deeper into the post vaccine world, interest rates might rise as the world is returning towards normalcy every passing day. Smart investors are constantly seeking companies with strong growth potential and can generate strong returns for investors.
In this article, we would put our lens through some growth stocks listed on the LSE.
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DFS Furniture PLC (LON: DFS)
Listed on the FTSE All shares index of the London Stock Exchange, DFS is a UK-based furniture retailer which specialises in designing, manufacturing, delivering, and carrying out after sales servicing of furniture.
The company has strengthened its position in the market by putting across a resilient performance for the first half of FY 2021 ended 27 December 2020. The total revenue posted by the group for the six months period was up 17.3 per cent to £572.6 million, driven by factors such as a pent-up demand of furniture from the first lockdown as well as the shift in consumer spending to the home and gains in market share.
The shares of DFS closed on 12 March at GBX 241.00. The shares of furnishing retailer have posted a 42.94 per cent return in one-year period.
Dunelm Group PLC (LON: DNLM)
Headquartered in Syston, England, Dunelm Limited is one of the leading homeware retailers in the UK. The company has demonstrated strong performance and has progressed strategically with a 23 per cent increase to £719.4 million in the half-yearly results for the period ended 26 December 2020. Dunelm has witnessed an exceptional growth of 111 per cent in digital sales because of the ongoing development of digital capabilities.
The company has also resumed dividend payment by declaring an interim dividend of 12.0 pence per share, driven by strong half-yearly performance. The shares of DNLM closed at GBX 1,305.00 on 12 March. The shares of furnishing retailer have achieved a 40.32 per cent return in one-year period.
Also Read: How Dunelm generated high profits in H1 2021
Games Workshop Group PLC (LON: GAW)
Incorporated in 1991, Games Workshop is a British company that is engaged in designing, manufacturing and selling fantasy miniatures. The company has been consistent in delivering robust progress and profitable growth with revenue up by 25.9 per cent at £186.8 million (2019: £148.4 million), driven by 26 per cent growth in sales for the six months period ended 29 November 2020.
The company announced 80 pence per share (2019: 100 pence per share) of total dividends in the period along with 60 pence per share of additional dividend that was declared on 7 December 2020. The shares of GAW closed at GBX 9,875.00 on 12 March. The FTSE 250 shares have achieved 87.03 per cent return in one-year period.
Boohoo Group PLC (LON: BOO)
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The well-established online fashion retailer of UK is listed on the FTSE AIM 100 and has been serving its customers across the globe since 2006. In the trading update provided by the company recently for the four months ended 31 December 2020, Boohoo demonstrated a 40 per cent (CER) surge in the total group revenue to £660.8 million. The net cash position of the company stood at £386.9 million (31 August 2020: £344.9 million).
In recent months, Boohoo has strategically acquired brands such as Dorothy Perkins, Wallis and Burton for cash consideration of £25.2 million. The shares of BOO closed at GBX 316.30 on 9 March. The shares of the online fashion retailer have posted a 33.01 per cent return in one-year period.
GNS PLC (LON: GNS)
Headquartered in Basingstoke, UK, the FTSE 250 constituent is a leading animal genetics company, which is engaged in producing genetically superior breeding animals. The company has performed strongly, making good strategic progress with 11 per cent increase (constant currency) in the revenue to £ 285.7 million for the H1 2021.
The shares of GNS closed on 12 March at GBX 5,035.00. The shares of the biotechnology company have garnered a 70.33 per cent return in one-year period.