Three British growth stocks that are ready to boom
Professional investor Chris Ainscough of the Charles Stanley Monthly High Income Fund picks three UK growth stocks for the long term.
At Charles Stanley we seek out top-quality British growth stocks: highly profitable companies with consistent earnings growth. Over the long term, these businesses should be able to reinvest their earnings and cement dominant market positions.
Such companies do come with a valuation premium, but time has shown that these premiums are justified, maintained and often grow in line with the businesses themselves.
We do allow ourselves scope to invest in shares that we consider to be misunderstood and therefore mispriced, or in assets that we deem highly specialist or unique. This ensures our portfolio isn’t entirely dominated by one factor.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
We have not reaped the full benefit of the “reflation/cyclical rally” triggered by the vaccine announcements last November, but take comfort in our performance through the pandemic correction and over the longer term. Committing to your strategy is crucial in investing and we did not want to flip the portfolio to chase the value factor through the early stages of this year.
We are fortunate to have a broad mandate within the Charles Stanley Equity fund, which allows us to look for attractive companies with different market capitalisations.
Cashing in on e-commerce
Boku (Aim: BOKU) is a relatively new addition to our portfolio; it offers online mobile-payment services. Many readers may not have come across the company, given the prevalence of banking and credit and debit-card transactions in the UK. Boku has spent recent years building up an impressive, market-leading payment platform that allows users to pay for goods through their mobile phones.
It has invested heavily in its network and is now poised to capitalise on its expenditure. Profitability and sales look set to rise, with the latter underpinned by the spread of digital wallets. Boku is a promising play on e-commerce and digital payment systems.
A successful transition
Auto Trader Group (LSE: AUTO) has long been a favourite of ours. This is a rare example of a print magazine making the transition to the digital world while vastly broadening its horizons.
The platform it offers both retail buyers and forecourt sellers is excellent and it boasts attractive opportunities for expansion. Auto Trader Group is not a cheap stock, but the margins are fantastic and the firm has consolidated its market position through the concessions it offered clients during the pandemic.
Revamped and ready to deliver
Occasionally, we see an already excellent business seeking to reposition itself for the future. This is not always straightforward. LSE Group (LSE: LSEG) seems to be in this category at present and investors are waiting for the new strategy to pay off.
LSE Group has dominated the market-infrastructure and capital-markets arena for many years. Its acquisition of financial market-data provider Refinitiv shows that it has thoroughly embraced a data and analytics-driven future.
The transition has come with teething problems. However, LSE Group now has all the necessary components to become a financial-market infrastructure and data provider, which bodes well for the company’s long-term prospects.
Chris Ainscough, FP Matterley Regular High Income Fund.
-
Barclays warns of significant rise in social media investment scams
Investment scam victims are losing an average £14k, with 61% of those falling for one over social media. Here's how to spot one and keep your money safe
By Oojal Dhanjal Published
-
Over a thousand savings accounts now offer inflation-busting rates – how long will they stick around?
The rate of UK inflation slowed again in March, boosting the opportunity for savers to earn real returns on cash in the bank. But you will need to act fast to secure the best deals.
By Katie Williams Published
-
The industry at the heart of global technology
The semiconductor industry powers key trends such as artificial intelligence, says Rupert Hargreaves
By Rupert Hargreaves Published
-
Three emerging Asian markets to invest in
Professional investor Chetan Sehgal of Templeton Emerging Markets Investment Trust tells us where he’d put his money
By Chetan Sehgal Published
-
What to consider before investing in small-cap indexes
Small-cap index trackers show why your choice of benchmark can make a large difference to long-term returns
By Cris Sholto Heaton Published
-
Why space investments are the way to go for investors
Space investments will change our world beyond recognition, UK investors should take note
By Merryn Somerset Webb Published
-
Time to tap into Africa’s mobile money boom
Favourable demographics have put Africa on the path to growth when it comes to mobile money and digital banking
By Rupert Hargreaves Published
-
M&S is back in fashion: but how long can this success last?
M&S has exceeded expectations in the past few years, but can it keep up the momentum?
By Rupert Hargreaves Published
-
The end of China’s boom
Like the US, China too got fat on fake money. Now, China's doom is not far away.
By Bill Bonner Published
-
Magic mushrooms — an investment boom or doom?
Investing in these promising medical developments might see you embark on the trip of a lifetime.
By Bruce Packard Published