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Summary
- Growth stocks represent companies, which are at a nascent stage and are progressively working to expand their market size and revenue base.
- These stocks represent high risk high reward opportunities for investors, who have the appetite for such a level of risk
- Such investors mostly derive returns in the form of capital gains rather than dividend earnings.
- In recent times United Kingdom has seen a boom in the e- commerce and fintech sectors, with several companies showing strong potential to give their investors windfall returns.
Growth stocks represent companies that are usually belong to sunrise industries or niche sectors where the company might be having an advantage. There are tremendous possibilities for these companies to expand their business, adopt strategies for growth, and capture market share before their competitors do.
These companies display high growth rates and invest aggressively to attain their goals. However, these companies also face a greater threat of failure than larger and more mature companies, who have a stable revenue base.
Since these companies have a high growth rate the shares prices of these companies also grow rapidly on the stock exchanges, making them highly sought-after by many investors.
However, investing in growth stocks is not so easy. Due to their small business size and market capitalisation, they receive less analyst coverage than larger companies. Thus, a higher amount of research effort is required on the part of the investor to identify good investable companies in this category.
Where to find growth stocks on the LSE?
The Alternative Investment Market (AIM) segment and the FTSE Small cap of the London Stock Exchange are two prominent indices where most many growth stocks can be found. However, the FTSE Small cap index generally lists companies which are relatively more mature than the ones listed on the AIM market.
Now, we list below five growth stocks that have performed well during the past six months.
Eqtec plc (LON:EQT)- This company is a renewable energy company working in the field of waste to energy.
The company gained from the increased public awareness about environment protection and reducing carbon footprint. The company has been receiving continued support from investors who invest in businesses providing environment protection technology and green energy solutions. The company has also expanded its business and partnerships in the United States as well and it looking to suitably expand in Asia.
The green energy industry has substantial growth prospects in the United Kingdom, and Eqtec plc is likely to find a lot of opportunities to expand in near future.
The company’s waste gasification technology is getting a lot of attention lately, as it has seen an increase in its sales activity, partnership engagements, as well as contracting activities in the first half of 2020. In September this year the company had announced a co- development plan with Rotunda group plc.
Source- Thomson Reuters
As on 30 October 2020, the shares of Eqtec plc closed the day’s trading at GBX 0.48 per share gaining 1.49 per cent over previous day’s close at the LSE.
Ceres Power Holdings plc (LON:CWR)- The company is a developer of low-cost fuel cell technology.
The company’s fuel cell technology has found interested buyers locally as well as globally. The company’s revenue has grown by 21 per cent this year despite the impact of COVID- 19.
Low cost SteelCell fuel cell technology is an emerging area in the field of clean energy, with many potential applications. The company has the potential to grow significantly throughout the world.
The company recently entered into a deal with the south Korean company Doosan. As per the terms of the agreement, Doosan now has a non- exclusive license to make units of Ceres’s SteelCell Fuel Cell stack units. The company has given good revenue projections for the full year 2020.
Source- Thomson Reuters
As on 30 October 2020, the shares of Ceres Power Holdings plc closed the day’s trading at GBX 696.00 per share gaining 2.50 per cent over previous day’s close at the LSE.
GoCo Group plc (LON:GOCO)- The company runs multiple price and service comparison websites, which help people in their purchasing decision making.
The company’s price and service comparison services have helped people make informed purchasing decisions. Its dynamic content has earned it patrons who are increasing by the day.
As more and more people spend time online and purchase goods and services over the internet the acceptance of GoCo’s services will expand.
The year 2020 has been particularly good for the company. The company has reported a 13 per cent growth in its revenues in its third quarter. The company also saw its number of customers grow significantly during the period.
Source- Thomson Reuters
As on 30 October 2020, the shares of GoCo Group plc closed the day’s trading at GBX 95.10 per share losing 1.45 per cent over previous day’s close at the LSE.
Future plc (LON:FUTR) - This British company provides multi- platform media content.
The company’s offering of providing multimedia content over different platforms has seen decent growth lately. As the access to high speed internet services is expanding by the day, people are increasingly consuming multimedia content over their mobile and computing devices.
The online multimedia business is expanding very rapidly, which is expected to continue to grow at an accelerated pace in the foreseeable future. Thus, the growth prospects for Future plc remain high.
The company recently acquired the US based company CinemaBlend which is a provider of premium digital entertainment content.
Source- Thomson Reuters
As on 30 October 2020, the shares of Future plc closed the day’s trading at GBX 1988.00 per share gaining 1.53 per cent over previous day’s close at the LSE.
IMI Mobile plc (LON:IMO) - The company is an India based software and cloud communication service company.
The company’s service of providing end to end cloud-based text as well as voice-based communication has seen massive acceptance in recent times, especially with the bust corporates who fine it very handy.
The market for secured real time communications services is expanding very rapidly. The company has a wide presence across Asia, Middle East, Africa and well as Europe, where it faces massive growth prospects.
This company got clearance by the UK government to be a supplier for its G- Cloud Initiative through which public sector companies can buy services without going through a tendering process.
Source- Thomson Reuters
As on 30 October 2020, the shares of IMI Mobile plc closed the day’s trading at GBX 397.00 per share losing 1.15 per cent over previous day’s close at the LSE.
