Greatland Gold’s blazing trailing 12-month performance leaves the FTSE AIM in its wake (click chart to enlarge): 

Credit: London Stock Exchange

Bushveld Minerals trails the index in this regard. However, excluding its 2018–19 outlier year, the vanadium miner is trading at prices it’s not seen since 2012.

Every investor wants to buy stocks that perform above the average over time. Indeed, growth stocks such as these miners could be one way to do exactly that.

But, can these two mining stocks be expected to maintain this performance in the future?

Greatland Gold

One person who believes in Greatland Gold’s prospects is its CEO, Gervaise Heddle. Back in March, Heddle bought enough shares in the gold miner to bring his ownership stake to 1.5%.

Some investors believe that putting all your eggs in one basket is a good way to make a fortune. Judging by the optimal timing of his share purchase, this could be true for Heddle, who has intimate knowledge of Greatland’s business.

Not having that intimate knowledge, I’d personally be more hesitant to make a bulk purchase in Greatland, especially after the recent share price hike. Currently trading at around 12.5p, Greatland Gold has no price to earnings (P/E) ratio. This is because it hasn’t reported any previous earnings or any profits with which to calculate a ratio. The current share price is based purely on future optimism.

However, the future could be gold. Greatland’s Havieron gold-copper discovery in Western Australia looks promising. And on Monday, the firm announced a series of agreements, which are now in place, relating to the exploration of the region with partner organisations. These will help with obtaining a mining lease to enable Greatland to begin mining operations. But it will still be a while before the firm begins revenue generation from any gold found.

Bushveld Minerals 

Bushveld Minerals is another stock where the majority broker consensus is to buy. The firm produces Nitrovan vanadium, an additive for high-strength, low-alloy steel that can lower steel production costs.

The Bushveld share price is currently reflective of the trade-off between low vanadium prices and good business management. The former reduced revenue while the latter produced the lower overheads that compensated for that drop.

Although the effects of the Covid-19 pandemic are concerning for the firm, its Vametco mine’s first-quarter vanadium production rose despite the lockdown. Indeed, many analysts are expecting an increase in production for 2020.

As for Bushveld’s future, the recent three-year wage agreement with Vametco’s workers gives stability. Moreover, the firm hopes that the recent addition of the Vanchem plant will turn Bushveld Minerals into one of the most significant low-cost, and most vertically integrated, miners.  

I’m not convinced a portfolio of growth stocks will yield a better return than a more balanced one. It also comes with greater risk, as does gold mining. Greatland Gold’s current price is too speculative for me as its future is too uncertain. But, I am tempted by Bushveld as a speculative purchase in an otherwise balanced portfolio.

The post Greatland Gold and Bushveld Minerals. Could this be the future? appeared first on The Twelfth Magpie.

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Rachael FitzGerald-Finch has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Today, I’m looking at a rarely-discussed firm that has done seriously well for those that were willing to back it. 

Outperformer

In the last 12 months, shares in self-storage business Safestore (LSE: SAFE) have climbed 40% in value. For comparison, the FTSE 250 index — of which the company is a constituent — is up ‘just’ 15%. 

Can this form continue? Quite possibly. 

This morning, the company revealed an 8.3% rise in total revenue (at constant exchange rates) over the three months from November to January. Like-for-like revenue for the quarter was up 5.9%.

Broken down, trading in the UK was particularly stellar. Aided by new acquisitions and store openings, revenue here was 8.2% higher (to £30.3m) compared to over the same period a year earlier. The firm’s operations in Paris also did well with revenue rising 6.7% to €11.1m.

Based on these numbers, CEO Frederic Vecchioli stated that the company is on course to meet its expectations for the full year. With new locations in Gateshead and Sheffield scheduled to open in the next few months (and another being unveiled in central Paris before the end of 2020), I certainly wouldn’t bet against this happening.

The only issue is that Safestore’s stock now looks expensive, trading as it does on 27 times forecast earnings. This — combined with lack of reaction in early trading — leads me to think that gains might be less impressive going forward.

So, while our penchant for accumulating more and more stuff makes this an area of the market worth following, the relatively low barriers to entry (listed competitors include Big Yellow and Lok ‘n Store) highlights the importance of not paying too much to get exposure. 

One for the watchlist, perhaps?

Bull in a china shop

Another example of a ‘boring’ company that’s been doing all the right things for its shareholders is ceramic tableware supplier Churchill China (LSE: CHH). The Stoke-on-Trent-based firm’s customers range from pub, restaurant and hotel chains to contract caterers to health and education organisations. 

Again, this a company that has outperformed its index. In the last year alone, the valuation has climbed 64%. The FTSE Small-Cap is up 11% in comparison.

January’s trading update for the whole of 2019 was encouraging with the company stating that it had seen decent trading in the UK and its overseas markets. Indeed, things have been going so well that management reported operating performance would likely be “slightly ahead of current market estimates“. 

With decent margins, rising returns on the capital it puts to work, no debt and consistent dividend hikes, Churchill ticks a lot of my boxes when looking for great potential investments. The fact that a decent proportion of its shares are still owned by the Roper family — some of whom serve on the board — also gives me confidence that the business will continue to be managed with its shareholders in mind.   

Like Safestore, however, Churchill’s shares now trade on a lofty valuation (23 times expected earnings). Although short-term movements in the market are pretty much impossible to predict, this at least suggests to me that the share price may need to cool down a bit before moving higher.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Churchill China. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

But, of course, these companies often carry a higher level of risk, so it goes without saying that a more cautious approach is required when looking to invest in lesser-known firms.

Juicy dividends

One such firm that recently caught my eye is Connect Group (LSE: CNCT). The Swindon-based distribution firm operates a number of diverse businesses in areas such as news & media, parcel freight, education and books. These include Smiths News, the UK’s largest newspaper and magazine wholesaling business, and Tuffnells, a parcel delivery business.

Last month the group agreed to sell its Education & Care division to RM plc, the education resources and software group, for £56.5m. The disposal is consistent with the group’s strategy of focusing on growth opportunities within its News & Media and Parcel Freight businesses. Personally I think it’s a good move, as the division has been suffering from a decline in revenues, and was likely to be impacted further by an increase in teacher pension and National Insurance costs that will need to be absorbed by school budgets.

Connect Group also happens to be one of those rare smaller companies that actually rewards its shareholders with generous dividends, rather than ploughing all the profits back into the business. In fact, management has been increasing shareholder payouts for a number of years in line with a progressive dividend policy. Forecasts currently suggest a full-year dividend of 9.8p per share for the current year, equating to a juicy 7.3% yield, with payouts covered two times by expected earnings.

Transformation

If I’m picking out Connect Group for income seekers, then here’s one for growth investors. McBride (LSE: MCB) is the leading European manufacturer and supplier of ‘private label’ products for the household and personal care markets. In essence the company develops and supplies products for sale under retailers’ own brands, variously referred to as white labels, store brands, own labels, distributor brands and discount brands.

After a number of disappointing years, the group entered a transformational phase in 2015, with a new management team taking the business into a fresh strategic direction. The aim now is to maximise McBride’s market-leading position and size to deliver greater value and develop opportunities for further growth.

The strategy seems to be working ,with the Manchester-based business delivering double-digit earnings growth in each of the last two years. Market consensus suggests that there will be more of the same over the medium term. The shares look undervalued trading at 14 times forecast earnings for the current year, dropping to just 12 times for FY 2018.

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Build to last

For a group the size of Balfour Beatty a pre-tax profit of £60m may not sound like a lot, but add to that a £300m uplift in underlying revenues, and I think the group’s transformation programme may be beginning to bear fruit. Management embarked on its ‘Build to Last’ transformation programme at the start of 2015 to address issues with all its stakeholders, including customers, suppliers, employees, and subcontractors.

By its own admission, the group had become overly complex after more than a decade of acquisition-led forced growth. I think it’s refreshing to see a company finally admitting its own failings and embarking on a mission to turn things around. Having simplified the group, Balfour is now focused on its core markets in the UK and US, where governments are more committed to large-scale expenditure on infrastructure.

Healthy order book

Things certainly seem to be moving in the right direction, with the UK construction business returning to profitability in the second half of 2016, and a much healthier order book up 15% at £12.7bn. City forecasters also seem to be optimistic about the company’s prospects, with consensus estimates suggesting a £419m jump in revenues to £7.35bn for the current year, and a massive surge in pre-tax profits to £127m.

With revenues and profits expected to climb even higher in 2018, I think Balfour’s turnaround has well and truly begun. And with the forward P/E ratio dropping to 12 by the end of next year, I believe there’s plenty of growth left in the share price too.

Landmark year

Meanwhile, another London-listed company celebrating a successful 2016 is Jimmy Choo (LSE: CHOO). The London-based luxury fashion brand may be best known for its designer shoes, but it also specialises in high-end handbags, accessories and fragrances.

According to its CEO Pierre Denis, 2016 was a landmark year for the firm, as it celebrated 20 years in business with record levels of revenue and profitability. Total revenues grew 14.5% to £364m for the year, thanks mainly to the weaker pound, with adjusted earnings (before interest, tax, depreciation and amortisation) up 15.7% to £59m.

I believe the outlook is positive for Jimmy Choo as it continues to deliver its long-term growth strategy with sustained expansion of its distribution network, particularly in areas such as Asia where it remains under-penetrated. Asia has been a key target for luxury accessories brands. But while many have over-extended themselves and had to scale back in recent years in markets like China, for Jimmy Choo there is still lots of potential to grow.

I think the shares offer good value too, with the P/E ratio dropping to 17 next year, much lower than its three-year average of 26.

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However, in the cases of printer St Ives Group (LSE: SIV) and distributor Connect Group (LSE: CNCT), City analysts watching the firms collectively rate the stocks as ‘strong buys’, so it’s worth digging a bit deeper. 

Robust dividend records

I can’t fault either firm on its dividend record. Over the last five years, St Ives has raised its dividend by 49% and Connect by 32%. Forward estimates are for Connect to increase its payout by 2.4% for 2017 and 2.8% in 2018. Analysts expect St Ives to hold the dividend flat for the next two years.

Forward earnings will likely cover Connect’s 2017 dividend just over twice and the St Ives dividend around 2.3 times. So no concerns about support from profits. But firms pay dividends with cold, hard cash and not with profits that can disappear at the stroke of an accountant’s pen. 

On that front the news is good. Connect has a record of generally rising operating cash flow per share, which supports earnings per share well. The St Ives cash flow is a little more patchy but averages out to decent support for earnings.

Are these stocks cheap?

At first glance, both firm’s share prices put a low valuation on the underlying businesses. There’s that tempting 6%-plus yield in each case, but also a low-looking forward price-to-earnings (P/E) rating. At a share price of 159p, Connect’s forward P/E ratio for 2017 runs around eight and at 129p, St Ives’ is just above seven.

However, I’m not getting too excited about that because both firms have a high level of cyclicality to their operations and deserve their low ratings, in my opinion. The market as a whole will likely be trying to anticipate the next cyclical collapse in earnings for these firms. So I’m not expecting a valuation re-rating with these two. 

Borrowings seem to be manageable in each case with Connect’s net debt sitting almost three times the level of operating profit and that of St Ives around 2.5 times operating profit. However, I would be happier if debt levels were lower at this mature stage in the macroeconomic cycle. Right now, when business is good, I reckon cyclical firms should be well on the way to paying down all of their debt so that they’re financially strong in order to survive the next downturn.

Outlooks

Back in October, Connect’s chief executive said that 2016 had been a year of both strategic and operational progress and he had confidence in the firm’s ability to succeed in the click-and-collect market in 2017 onwards.

Meanwhile, the St Ives chief executive said the firm is alert to possible deterioration in business confidence as an outcome of the Brexit process. However, assuming no change in current market conditions St Ives is well positioned to make further progress with its growth plans.

Overall, I reckon these two firms are interesting dividend payers, but their cyclical operations mean I would keep a close eye on them for signs of a deterioration in trading if they were in my portfolio.

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4Imprint saw sales of its branded T-shirts, pens and other nick-nacks shoot 17% higher during January-June, to $270.2m. Total like-for-like trading was 15% ahead of the corresponding period in 2015. And in a promising update last month, the firm announced that “further organic revenue growth has been achieved” since the beginning of August.

The marketing giant generates 96% of total sales from North America, making it relatively immune to any adverse Brexit-related troubles in the months and years ahead.

City analysts certainly expect earnings at 4Imprint Group to keep shooting higher, and expect earnings growth of 23% and 11% for 2016 and 2017. While these readings create slightly-heady P/E multiples of 21.3 times and 19.2 times, I believe this is a snip considering 4Imprint’s exceptional revenues momentum.

Building beauty

But for those seeking hot growth at bargain-basement prices, I reckon building products provider Tyman (LSE: TYMN) more than fits the bill.

A sleepy US residential market is showing signs of finally cranking into gear, with construction spending hitting seven-month tops in October and driven by a 1.6% rise in residential-related expenditure. And Tyman is banking on recent acquisitions, new product lalunches and organisational improvements to keep driving the top line, even if macroeconomic turbulence troubles its other regions.

Tyman’s broad geographic diversification has already made it a reliable deliverer of sizeable earnings growth year after year, and the City expects this to continue with bottom-line expansion of 12% in 2016 and 13% next year.

Not only do such projections create modest P/E ratios of 11.6 times and 10.2 times — well below the benchmark of 15 times widely considered attractive value — but this year’s PEG rating is bang on the value yardstick of one. And this slips to an even-better 0.8 for 2017.

A shoe in

I’m convinced that electric demand for Jimmy Choo’s (LSE: CHOO) fashionable footwear should also underpin stunning earnings growth in the years ahead.

The company continue to face up to the difficulties enveloping the global luxury market, and commented last month that “Jimmy Choo is seeing revenue growth driven both by new store openings and by improving retail trading in all regions.” And the label is looking to capitalise on huge pent-up demand in Asia by aggressively expanding its shop network there — regional sales of its shoes (excluding Japan) climbed by almost a quarter during January-June.

The number crunchers share my optimistic view of Jimmy Choo’s bottom line, and have pencilled-in a 33% earnings rise in 2016. And an extra 24% bump is predicted for next year.

These projections  push a P/E multiples of 20.3 times for the current year to 16.4 times in 2017. Meanwhile, PEG ratios of 0.6 and 0.7 for 2016 and 2017 suggest that Jimmy Choo is great value at current prices.

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One company that fits this description perfectly is specialist filter producer Porvair (LSE: PRV). Shares of Porvair are up over 300% in the past five years as sales of the company’s industrial filters for planes, power plants and base metal smelters have grown by double-digits.

The key to Porvair’s success is finding a niche need and becoming the market leader through organic growth or acquisitions. This not only gives the company a wide moat to entry for potential competitors, but also ensures considerable pricing power and hefty 9.1% operating margins as of H1.

Porvair’s balance sheet remains strong with net cash of £6m at the end of August due to impressive cash generation and a sustainable expansion and capex policy. Shares are pricey at 24 times forward earnings but a market-leading position, recurring revenue from happy customers and growing dividends make Porvair one to watch in the future.

Nuts and bolts

Another stellar performer in an equally unsexy industry is industrial fastener manufacturer Trifast (LSE: TRI). Making and distributing the nuts, bolts and screws that go into your car, oven and electronics has boosted share prices by over 370% in the half decade.

Trifast has grown quickly due to a strategy of winning contracts with large multinational manufacturers that need a consistent supply of identical fasteners for plants across the globe. Working with these large multinationals means a steady stream of revenue as well as growth opportunities by cross-selling to other divisions and plants.

In the six months through September revenue grew 8.1% if you strip out the positive effects of the weak pound. And like Porvair, an industry-leading position, great customer satisfaction and economies of scale lead to impressive operating margins of 9.7% in H1. Trifast’s balance sheet is constantly improving and with management on the outlook for bolt-on acquisitions to complement strong organic growth, Trifast looks set to continue its strong run of success.

Printing profits

Another incredibly successful small-cap that may be more familiar is promotional materials marketer 4imprint (LSE: FOUR). Shares of 4imprint are up over 600% in the past four years as customers clamour for umbrellas, notebooks, coffee mugs and anything else they can have made with their name or logo on it.

In the six months through June alone sales grew a whopping 17% year-on-year driven by increased orders from its main market in the US. Aside from its dominant position in America, future growth prospects are bright in the UK. In H1 only 4% of group sales came from Britain, which leaves a massive market open for it to target. The company will need this growth if shares are to live up to their 22 times forward P/E, but a healthy balance sheet leaves plenty of room for acquisitions to go alongside continued double-digit organic growth.

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Ian Pierce has no position in any shares mentioned. The Motley Fool UK owns shares of Porvair. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Diversified dynamo

I reckon support services play Cape’s (LSE: CIU) exposure to a broad range of industries should allow it to keep revenues moving skywards. And although the energy and mining industries remain in peril, investors should take heart from the firm’s chunky £862m order book as of March.

The City expects Cape to maintain the dividend at 14p per share in both 2016 and 2017, figures that yield a splendid 7.1%. And dividend cover of 1.8 times for these years is pretty robust, even if it falls just short of the safety benchmark of 2 times.

Staffing star

I also believe SThree’s (LSE: STHR) terrific sector and geographic diversification make it a terrific bet for those seeking reliable earnings — and consequently dividend — growth in the years ahead. And the recruitment specialist is undertaking shrewd restructuring to mitigate weakness in key segments such as the oil and gas markets.

SThree is expected to pay a dividend of 14.1p per share for the year to November 2016, up from 14p last year and yielding a decent 5.8%. And this figures moves to 5.9% next year thanks to a predicted 14.4p reward.

Dividend coverage stands at 1.5 times through to the close of next year.

Marketing marvel

I’m backing the impressive international footprint of Communisis (LSE: CMS) to help it avoid the worst that Brexit kicks up. The company currently operates in almost 30 global territories, and is expanding its presence in order to keep winning business with major blue chips — it counts AXA, Barclays and BT Group among its clients.

The marketing play has a long history of hiking the dividend, and is predicted to raise it to 2.4p per share this year, up from 2.2p in 2015 and yielding 6.6%. And next year’s anticipated payout of 2.5p pushes the yield to 6.9%.

Meanwhile, dividend cover of 2.6 times and 2.5 times for 2016 and 2017 respectively should satisfy even the most cautious of investors.

Make healthy returns

I believe healthcare facility provider Primary Health Properties (LSE: PHP) is a great long-term pick for investors. Not only should government investment in primary care keep boosting PHP, but bubbly acquisition activity should also help to drive the bottom line.

Primary Health Properties’ dividend is predicted to rise from 4.91p per share last year to 5.1p and 5.3p in 2016 and 2017, yielding a splendid 4.7% and 4.9% respectively.

It’s true that dividend coverage for the period is poor — payouts are covered just 1 times by estimated earnings for 2016 and 1.1 times for next year. But I reckon the firm’s defensive operations and solid balance sheet should soothe the nerves.

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Services star

Technology, payment and admin services provider Equiniti Group‘s (LSE: EQN) share price has exploded in recent months, the company’s ability to secure business from both new and existing clients continuing to excite the market.

Indeed, Equiniti commented in April that it expects organic sales to rise 5% this year alone as contract wins with blue chips like Barclays, Tesco and Lloyds pay off.

The City shares this cheery outlook, and predicted earnings rises of 13% and 10% for 2016 and 2017, respectively, produce exceptional P/E ratings of 12 times and 11.3 times. I reckon Equiniti is a steal at these prices.

Shopping giant

Home shopping and education supplies provider Findel (LSE: FDL) has fallen out of favour with stock pickers in recent times, the firm slipping to three-year lows as fears over the retail sector have gathered pace.

But I believe these concerns are overblown — indeed, Findel advised in March that sales at both its Express Gifts and Findel Education arms had improved more recently. And the recent sale of its Kitbag division should allow the firm to double-down on its key areas looking ahead.

The number crunchers expect Findel to enjoy an 11% earnings bump in the period to March 2017, resulting in a bargain-basement P/E ratio of 6.7 times — any reading below 10 times is considered ultra-cheap.

And predictions of a 21% bottom-line rise in 2018 drives the multiple to a mere 5.9 times.

Tech titan

Recent trading news from filtration and environmental technology play Porvair (LSE: PRV) helped propel the stock price to fresh record highs around 342p per share. And I expect this uptrend to continue.

Porvair said that it expects sales to shoot 10% higher at constant currencies during December-May, adding that profits “will be ahead of those reported in 2015.” On top of this, Porvair described its order book as “healthy.”

The tech play has a solid record of generating earnings expansion year after year. And extra advances of 3% and 5% chalked-in for the years to November 2017 and 2018, respectively.

I reckon subsequent P/E ratings of 20.9 times and 19.8 times can be defended given Porvair’s exceptional earnings record and improving sales outlook.

Construction corker

Land, property and construction play Henry Boot (LSE: BHY) also furnished the market with a bubbly trading update in recent weeks.

The firm advised that trading since the start of 2016 has been “encouraging.” And critically Henry Boot noted that “we are seeing improvements in both construction activity and the size of opportunities coming to the market” despite reports of significant cooling in the British construction sector.

The City expects Henry Boot to print an 8% earnings rise in 2016, resulting in a P/E multiple of 10.9 times. And the multiple slips to a terrific 10.5 times for next year thanks to an estimated 7% advance.

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Marketing marvel

I reckon investors should take advantage of heavy share price weakness at Communisis (LSE: CMS) and pile into the marketing services play.

Communisis boasts an enviable client list featuring the likes of Barclays, Centrica and Legal & General, and is steadily expanding its global footprint to keep business renewals and new contract wins from major blue chips flowing in.

With earnings tipped to keep rising, and Communisis generating shedloads of cash — free cash flow doubled in 2015 — the City has pencilled-in dividends of 2.4p and 2.5p for 2016 and 2017.

Consequently Communisis sports giant yields of 5.8% and 6.2% for these years.

Gadgets great

Despite current market difficulties, I believe that TT Electronics (LSE: TTG) is also a sound pick for dividend chasers as its transformation strategy clicks through the gears.

The electronics specialists has seen business pick up in recent months, with revenues 4% higher during January-April on a constant currency basis. And the December acquisition of Aero Stanrew provides plenty of reasons to be cheerful — TT Electronics said that integration of the electromagnetic component specialist “has progressed well.“

The number crunchers expect dividends to turn higher again from 2016, resulting in a reward of 5.6p per share. This figure yields an impressive 4.5%.

And further earnings growth next year is expected to propel TT Electronics’ dividend to 5.8p, yielding 4.6%.

Dividends driving higher

With demand for new vehicles continuing to explode, I reckon shareholder payouts at financing specialists S&U (LSE: SUS) should keep pounding higher.

The company has seen motor finance transactions at its Advantage Finance division accelerate in recent months, and its customer base registered at an impressive 35,600 as of mid-May, up 3,000 from the end of 2015.

And helped by a robust UK economy, I expect earnings at S&U to rev higher from this year onwards, a promising omen for dividend seekers.

This view is shared by the City, and S&U is anticipated to pay dividends of 89.8p and 106.8p per share for the years to January 2017 and 2018, respectively. The finance play subsequently sports juicy yields of 3.9% for 2017 and 4.6% for the next year.

Paper play

I believe newspaper and magazine distributor Connect Group (LSE: CNCT) is also in great shape to deliver solid returns.

The company — formerly known as Smiths News — is gearing up to embrace the fast-growing online retail segment, and Connect is now a major ‘click and collect’ service provider for heavyweights such as Amazon and ASOS.

On top of this, a five-year contract extension inked last month with publishing giant Northern & Shell provides Connect’s outlook in its traditional markets with a welcome shot in the arm.

Boosted by its solid earnings picture, the company is expected to fork out dividends of 9.5p and 9.9p per share in the years to August 2016 and 2017. These figures create exceptional yields of 5.9% and 6.2%.

The post 4 dividend stars you probably haven’t heard of! appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.