The demand for EVs (electronic vehicles) is growing at a rapid rate. In just a few years, it has gone from a niche product to a dominant force in the automobile industry. It is estimated that EV sales will outstrip traditional cars by 2040. And to capitalise on this projected growth, I have identified the top UK shares that could power the EV revolution as possible additions to my portfolio. These two companies address a very specific problem in the industry right now, making it the perfect time for me to invest.

Why am I bullish on the EV industry?

It is clear to me that EVs are the future of the automobile industry. The top automobile manufacturers in the world have adopted the tech and are busy developing all-electric cars. And further mainstream adoption is already underway. 

Sweden is consistently ranked as the most sustainable country in the world. And the nation just witnessed record-breaking EV sales last month. EVs made up 50.1% of all automobile sales in July 2022. This was a big jump from 2021’s 37.6%. In fact, globally, June saw the highest EV sales in history with 913,479 new registrations in June, which is 54% more than a year ago. This could take global sales past 10m units next year.

And as manufacturing steps up pace to meet the demand, battery metals like lithium and copper have become highly valuable. There are some emerging mining UK shares with a focus on soft battery metals. And I think investing in these companies could boost my growth portfolio returns over the next decade.

UK shares to buy in the EV sector

Elon Musk stated earlier this year that the lack of battery-grade lithium is a major roadblock in EV production today. And Atlantic Lithium (LSE:ALL) is a company looking to address this issue.

The company owns and operated the Ewooya lithium project in Ghana. While still under exploration, the mine is estimated to hold 30.1Mt of Lithium ore. And recent drillings have found deposits much closer to the surface, which reduces the time required to reach extraction. 

Copper is another metal that batteries require. And thanks to the demand, copper prices have gone up by 125% since 2020. Taseko Mines (LSE:TKO) is a copper producer in Canada that owns and operates the Gibraltar Mines. The company produces an average of 130m pounds of copper and 2.5m pounds of molybdenum per year.

While most UK shares in this space are still under exploration, Taseko is an established business. It had its best quarter ever this year, amassing US$38m in revenue, up 61% from Q1 2021.

However, there are some big risks to consider. Mining is a cash-intensive operation and profits are highly dependent on commodity prices. Prices of these metals are currently high but could fall rapidly when demand stabilises, cutting profits.

Atlantic Lithium is yet to reach production, making it highly speculative. But I think its tie-up with Piedmont Lithium, a Nasdaq-listed mining giant, is a huge plus. Piedmont has a deal with Tesla that could make Atlantic Lithium a direct supplier to the most-recognised EV brand in the world.

Both UK shares are well-backed and fit right into the EV supply chain. And this is why I am willing to invest a £1,000 lump sum in these two companies if market performance is positive across 2022. 

The post 2 top UK shares I’m buying for the EV revolution appeared first on The Twelfth Magpie.

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Suraj Radhakrishnan 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.

Future

One company that’s knocked the ball out of the park has been media group Future (LSE: FUTR). Its shares have leapt 105% in the year to date as the company’s strategy of snapping up publishing assets continues to pay off and profits have soared. That’s a superb return compared to the 13% achieved by the FTSE 250 index as a whole.

At £4.5bn, Future is now knocking loudly on the door of the FTSE 100. Whether it manages to gain entry in 2022 is open to debate though. Having grown strongly during the pandemic, I wonder whether performance will moderate as we emerge on the other side. Some profit-taking looks inevitable too. 

However, I’m inclined to be optimistic. Margins are steadily improving and free cash flow is strong. Perhaps most importantly, the company announced in November that FY22 adjusted results would likely be “materially above current expectations“.

So, based on a valuation of 24 times earnings, I wouldn’t be against adding Future to my own portfolio.

Indivior

Another second-tier winner in 2021 is pharmaceuticals business Indivior (LSE: INDV). Its stock has delivered a near-150% gain — thanks to the company repeatedly raising its guidance on earnings. The supplier of medicines to treat drug abuse and mental illness has also been buying back its stock, further supporting the ascent of its share price. 

Looking ahead, analysts are expecting Indivior to grow earnings per share by 45% in 2022. This leaves the stock on a P/E of 16. Sadly, I don’t think the demand for its products is likely to fall dramatically on a longer timeline either, potentially making Indivior an ideal buy-and-hold candidate.

That said, it’s worth noting that this stock has shown itself to be highly volatile in the past. Back in 2020, for example, the price crashed 30% in just one day after news that former parent company Reckitt had filed a lawsuit against it. That’s the sort of movement we might associate with a penny stock. It also makes me doubt whether I’d want to add the stock to my own portfolio, particularly as Indivior doesn’t offer a dividend as compensation. 

Watches of Switzerland

A third FTSE 250 member that’s done extremely well for shareholders has been Watches of Switzerland (LSE: WOSG). The premium timepiece seller’s value has climbed just over 155%, serving as a reminder to me that momentum can continue for a lot longer than one may expect. Every time I’ve assumed a pullback will occur, the share price has only moved higher. Investing is hard.

Like Future, however, I do question what may happen to the stock when the pandemic has finally passed. I suspect shoppers will want to use their cash on experiences rather than posh watches. As such, I still maintain that some kind of retreat wouldn’t be a surprise in 2022. The current valuation seems to make the risky assumption that management will execute its plans perfectly.

As good as recent trading in the UK and the US has been, a P/E of 37 looks too dear to me. WOSG stays on my watchlist for now. 

The post 3 FTSE 250 stocks I wish I’d bought in 2021 appeared first on The Twelfth Magpie.

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Paul Summers 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.

Timely gains

Luxury timepiece seller Watches of Switzerland (LSE: WOSG) may not have the catchiest of names, but I’m sure investors won’t be too worried. Its share price has soared 230% higher over the last year.

With many people still working through savings amassed during multiple UK lockdowns, I wouldn’t bet against the shares continuing their ascent, especially with international travel still proving problematic. Last week’s Q1 trading update certainly didn’t contain any red flags.

At £297.5m, revenue was over double that achieved for the same 13-week period in 2020. Importantly, it was also 46% higher than that seen two years ago, before Covid-19 arrived. For me, the latter gives a better indication of just how well WOSG is doing.

As well as selling an awful lot of expensive watches, the company also logged a 99% rise in jewellery sales to £20.1m. Earnings are growing overseas too. Sales in the US were particularly strong, helped by more people visiting stores in Las Vegas and New York.  

With new stores due to open both here and abroad and the firm’s mysterious Xenia project set to launch next month, I suspect the good times might continue. Then again, a valuation of 32 times earnings is also pretty high and could come back to haunt me if general market sentiment turns.

So, while I think the long-term prospects remain solid, I wouldn’t necessarily throw everything I have at this FTSE 250-beater today. No stock rises in a straight line. WOSG remains a buy for me, albeit a cautious one, in my book. 

20-year share price high

Media company Future (LSE: FUTR) is another company whose share price has made great strides over the last year. In fact, that’s something of an understatement. Yesterday, the FTSE 250 stock rose to its highest level in two decades!

The catalyst for this rise was news that the firm would be acquiring Dennis Publishing for approximately £300m. The latter owns titles such as The Week, MoneyWeek and PC Pro. With this deal, Future intends to further diversify its revenue stream via subscriptions and increase its reach into the lucrative US market (where its brands currently reach one in three people online). 

This development follows hot on the heels of a recent, very positive trading update. Last month, the company announced that it expected its latest set of full-year results to come in “materially ahead” of what analysts were predicting.  

Future’s share price has now climbed 166% in 12 months. This is another example of just how profitable stock-picking can be for those willing to put the time and effort into fully researching specific businesses. Of course, luck can also play a not-insignificant role in short-term returns.

Like WOSG, I’d be inclined to think this momentum will continue. Again, however, this would be a cautious (rather than screaming) buy for my portoflio. On 31 times earnings, quite a bit of good news looked priced in and there’s not much in the way of dividends to compensate me for any setbacks.

The post These FTSE 250 growth stocks are crushing the index appeared first on The Twelfth Magpie.

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Paul Summers 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.

Certainly, with the index being focused on the UK there is political and economic uncertainty facing many of its members.

But when compared to the 1.5% return on a Cash ISA that is available at the present time, now could prove to be a good time to access the growth potential of a range of mid-cap stocks.

With that in mind, here are two FTSE 250 shares that appear to offer growth at a reasonable price.

Future

Global platform for specialist media, Future (LSE: FUTR), released an encouraging trading update on Monday. It reported that the positive performance it experienced in the first half of the year has continued. As a result, it anticipates that its performance for the full year will be ahead of previous guidance.

The financial outlook of the company has been boosted by strong audience growth within its Media division. It has also seen a positive contribution from recent acquisitions, while being in the process of searching for a new CFO following a change in position to Chief Strategy Officer for the current CFO.

In the current year, Future is forecast to post a rise in earnings of 16%. Despite this strong rate of growth, the stock trades on a price-to-earnings growth (PEG) ratio of just 1.3. This suggests that it could offer good value for money, and may be able to deliver further share price growth following its 118% rise since the start of the year.

G4S

Also offering an encouraging financial outlook is FTSE 250-listed G4S (LSE: GFS). The security specialist is expected to post a rise in earnings of 12% in the current year after what has been an uncertain period for the business in recent years. Since it trades on a PEG ratio of 1, it appears to be cheap relative to many of its mid-cap peers.

The company’s recent trading update showed that is has experienced strong sales wins in recent months. It is also making progress with a separation review that has the aim of creating two separate businesses in order to unlock shareholder value. This could be a sound move for the business, and could offer greater specialism and efficiency over the long run.

As well as its growth potential, G4S also has an increasingly appealing income outlook. The stock currently yields 5% from a dividend that is covered twice by profit. This suggests that there is scope for growth in shareholder payouts, which may provide an additional boost to its total return over the long run. As such, now could be a good time to buy a slice of the stock from a value, income and growth perspective.

The post Forget a Cash ISA! I’d buy these 2 bargain FTSE 250 growth stocks today appeared first on The Twelfth Magpie.

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Peter Stephens 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.

Strong financial and operational progress

Looking back, Future hit its operational nadir during 2015 with revenue, profits and operating cash flow at a low point. Since then, figures for those financial indicators have been building back up, driven by both organic growth and a string of acquisitions, many helping the firm push into new, often digital, areas of business.

The market likes today’s full-year results report, and the share price looks perky. The figures are good. Overall revenue increased 48% year-on-year with 11% of that growth being organic, which suggests the firm’s offering is appealing to its customers. The fast-growing Media division is active in e-commerce, events and digital advertising and saw revenue rise 88%, of which 40% was organic progress. But even the Magazine division increased its revenue by 20%, although that was because of an acquisition.

Adjusted earnings per share moved 33% higher than the year before and the directors restarted dividend payments at 0.5p per share, which I think is a good signal that the turnaround is robust. Around 58% of gross profit came from the exciting Media division during the year and the remaining 42% from Magazines. Meanwhile, the Media division is pushing hard into the US market. Revenue grew 109% in North America and 28% of that was organic. I think the ongoing potential for the company to expand across the pond is one of the key attractions of the stock, although UK revenue moved 38% higher too, and 6% of that advance was organic.

A big market opportunity in America

UK revenue accounted for 70% of the total and US revenue 30%, but if the company keeps growing at or near the rate it has been in America, we could see the geography becoming rapidly more significant to the firm’s overall trading results. Future’s chief executive, Zillah Byng-Thorne, was upbeat in the report and said the financial results are due to the firm’s strategy of “leveraging” its specialist media platform and diversifying its revenue streams “both geographically and across its product offering.” The company completed four acquisitions in the period, which “materially” increased the firm’s global footprint. And  Byng-Thorne said the progress of the US business presents “material opportunities to monetise our significant US online audience.” 

Current trading is ahead of the directors’ expectations, which is a phrase that investors love to hear because it suggests further outperformance to come. Indeed, the outlook is positive and the management team is “confident” that trading for the current year will “continue the trends of the last year with strong growth.”  I think Future is emerging as a robust growth proposition with a great deal of potential surrounding its so-far-successful expansion into the US. I’d be happy to buy some of the firm’s shares right now.

The post Why I’d buy this tempting growth share right now appeared first on The Twelfth Magpie.

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Kevin Godbold 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.

Although the company has experienced a difficult past, it now seems to have the right strategy to deliver an improved financial performance. Alongside another stock that reported impressive performance on Monday, now could be the perfect time to buy it.

Improving outlook

That encouraging performance reported today came from Future (LSE: FUTR). The global platform for specialist media showed trading for the full financial year ahead of previous expectations. It has seen positive performances from World Cup-related campaigns, while also benefitting from some larger-than-expected product launches. As a result, its full-year EBITDA (earnings before interest, tax, depreciation and amortisation) is expected to be ahead of current guidance.

Looking ahead, Future is forecast to post a rise in its bottom line of 16% in the 2019 financial year. This puts it on a price-to-earnings growth (PEG) ratio of just 1.3, which suggests that it offers a wide margin of safety. This could help its shares to deliver improving capital growth over the medium term, with investors not appearing to have fully priced-in its growth potential.

As such, now could be a good time to buy the stock. It appears to offer an improving business model which is focused on growth and diversity. Recent acquisitions could have a positive impact on its overall performance in future years.

Changing business

The outlook for the aerospace and defence sector seems to be improving, and this could propel the Rolls-Royce share price higher. Spending on the military by the US and other NATO members looks set to increase over the coming years, while continued growth in the global economy could help to boost demand across the civil aerospace sector.

At the same time, Rolls-Royce is seeking to make major changes to its business model. It has already announced a major cost-cutting programme that may lead to a more efficient company over the medium term. Improved free cash flow may also mean it’s able to invest more heavily in new products, with greater innovation having the potential to create a larger competitive advantage.

With the stock trading on a PEG ratio of 0.3, it seems to offer excellent value for money. It has the potential to beat the FTSE 100 over the long run, and this could help an investor to generate a higher level of income in retirement. Given the relatively low level of the State Pension, buying the stock now could be a shrewd move.

The post How the Rolls-Royce share price could help you to beat the meagre State Pension appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Rolls-Royce. 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.

Pushing into the USA

Future is well versed in the art of acquisition and integration. Chief executive Zillah Byng-Thorne said: “This deal will be earnings enhancing and drive further organic growth in revenue and profitability in the first full year.” Newbay’s business operates in TV & video, entertainment & educational technology, and music. There’s a clear synergy with Future’s existing media and magazine business, and one of the prime motivations for the firm’s move on Newbay is that the acquisition will expand its reach into the US market. The company also said that Newbay’s business-to-business (B2B) titles will increase revenue diversification and bring B2B expertise to Future’s existing titles, which provides an opportunity to ratchet up revenue across the portfolio.

Future’s trading during the first half of the year was “strong” with last year’s momentum following through. The company’s story is that of a new digital business emerging phoenix-like from the dying embers of the old, as revenues from the paper magazine division continue to decline. Revenue growth from the media division more than offset the decline, with the US putting in a strong performance for the firm. We can see why Newbay is so important to the firm — Future is building on its strengths.

City analysts expect earnings to decline 5% in the year to September 2018 and to rise 8% the year after that. The chart displays a strong uptrend, suggesting the market expects decent operational progress in the years ahead. At today’s share price around 404p, you can pick up the stock on a forward price-to-earnings (P/E) ratio close to 17, which could prove to be an attractive valuation if growth in the US takes off.

Short-term challenges?

I think Future’s growth potential would sit well in a portfolio alongside the turnaround hopes of Micro Focus International (LSE: MCRO). It’s not often that you see a FTSE 100 firm’s share price plummet so quickly, but the software company’s stock sits more than 50% lower than it did just a month ago, due to its well-reported March 19 profit warning. Sales are down because of issues arising from the firm’s gargantuan $9bn acquisition of Hewlett Packard Enterprises’ software business. The integration process is causing Micro Focus indigestion problems.

Sales may be down a bit, but is the market’s reaction to this profit warning extreme? After all, City analysts expect positive earnings growth going forward, and the directors believe the integration challenges are short term with the acquisition thesis remaining intact.

At times like this, the market can be unforgiving and may yet be correct to assign the firm its current low rating of seven times historical earnings. Such uncertainty is the meat and veg of the turnaround investor, but I reckon the first sign that the company has the integration back on track could trigger a valuation re-rating upwards.

The post Could Micro Focus International plc and this stock be millionaire makers? appeared first on The Twelfth Magpie.

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Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended Micro Focus. 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.

Specialist media company Future (LSE: FUTR) delivered pleasing full-year results today driven by organic and acquisitive progress towards what chief executive Zillah Byng-Thorne describes as an ambition to “build a global platform business for specialist media with data at its heart.”

A plan that’s working

She explains that the company aims to focus on enduring content that connects with a substantial and expanding audience base. The figures suggest that the plan is working with revenue 43% higher than a year ago, adjusted operating cash inflow shooting up 160% and adjusted earnings per share following close behind with a 144% rise.

Acquisitions during the period of Imagine, Team Rock and Home Interest serve to increase the size and range of the firm’s offering. Meanwhile, we can see pockets of vibrant growth within the company’s overall revenue performance, such as a 34% organic advance in Media Division revenue, a 107% explosion in eCommerce takings and a 21% uplift from digital displays. Turnover from the magazine division ratcheted up 43% mostly powered by the firm’s acquisitions.

It seems to me that Future is adapting well to the needs of the modern digital media consumer, managing to secure more than 53m monthly online users during the fourth quarter of the trading year. That’s an 18% year-on-year improvement, 12% of which the directors chalk up as organic growth. The share price has responded well to the firm’s progress, up more than 100% since the beginning of 2017. Yet at today’s 385p, the forward price-to-earnings (P/E) ratio works out a little over 18, which looks manageable, suggesting further progress is possible if the company keeps up its strong operational performance.

Financial restructuring boosts growth prospects

I reckon Future could sit well in my portfolio alongside onshore oil & Gas exploration and production company IGAS Energy (LSE: IGAS), which continues to generate exciting potential and is moving closer to profits. After a major financial restructuring and fundraising event earlier in the year, the directors reckon the firm has the capital to deploy on growth projects across its conventional assets and a US$240m carried work programme on its shale acreage. At current oil prices, cash is flowing into the coffers, which bodes well for continuing progress alongside an already well-funded balance sheet.

IGAS claims to be one of the leading producers of hydrocarbons onshore in Britain and in September’s interim report, chief executive Stephen Bowler told us that the capital restructuring has enabled the company to bring forward an active programme of maintenance.”  He also expects incremental projects to boost the firm’s conventional production levels over the medium term.

Mr Bowler reckons that IGAS looks set to contribute “a number” of drilling or flowing wells to what he sees as a “significant level of activity” onshore UK over the coming year or so. Such operational progress could help move the company ever closer to profits, which could result in progress with the share price to reflect the improvement. I think ‘right now’ could be a good time to focus on IGAS and to run your own analysis of the firm’s prospects.

The post Why I’d buy this hot growth stock alongside IGAS Energy plc appeared first on The Twelfth Magpie.

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Kevin Godbold 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.

Junior mining stocks have the ability to make early investors very wealthy indeed. So long as you can stand the higher levels of capital risk and possess a healthy amount of patience, I think there are a number of such opportunities on the market right now. Here are just two.

A play on clean energy

With the price of uranium at a 12-year low, it’s not all that surprising if Berkeley Energia (LSE: BKY) has been flying under many investors’ radars. However, it’s for this very reason — along with the huge potential of its wholly-owned and fully-funded Salamanca mine near Madrid — that I think the shares warrant closer inspection by those who believe the demand for clean energy can only go in one direction. 

Once up and running, the mine is expected to churn out 4.4m lb of uranium concentrate every year, making Berkeley one of the top 10 global producers. What’s even more remarkable, however, is the fact that the £120m cap still expects to make a profit even if uranium prices don’t budge. According to the company, it will have one of the world’s lowest production costs at $15/lb — far cheaper than FTSE 100 mining giants Rio Tinto or BHP Billiton.

To be sure, there’s no knowing when — exactly — the price of uranium will recover. Nevertheless, there are a number of potential catalysts. China is expected to double its nuclear capacity in two years (and double again by 2035) and Japan is restarting its nuclear programme after it was brought to a sudden halt following the Fukushima disaster in 2011. With hundreds of US and EU utilities also re-contracting up to one billion pounds of uranium over the next five years, Berkeley believes we are approaching a major demand/supply tipping point. 

Based on the notion that the only way to outperform the market is by doing the things that the majority of investors can’t or won’t, Berkeley looks a very interesting proposition at the current time.

Cop a load of this

Whether you like the idea of driving an electric vehicle or not, you’d better get used to the fact that the automotive industry is changing at a furious pace. 

One potential way of profiting from this is to buy shares in copper-focused miners such as Asiamet Resources (LSE: ARS), particularly as the current oversupply of the metal won’t last forever.

The £54m cap’s shares have rallied over the last few days following the release of an encouraging update on recent drilling near the company’s Beruang Kanan Main (BKM) prospect on the island of Kalimantan. In addition to its huge feasibility-stage copper project, Asiamet now believes it has found a standalone polymetallic deposit with tests revealing high grades of zinc, lead, silver and gold.

Aside from its assets (which also include the Jelai Gold project and part-owned Beutong resource), one other thing worth bearing in mind is the track record of Asiamet’s management team. Chairman and significant shareholder Tony Manini, for example, built up a $20m miner (Oxiana Ltd) into a £6bn commodity giant in just eight years. Sounds to me like he’s a good person to have around.

Like Berkeley Energia, Asiamet isn’t a stock for those with short investing horizons. Nevertheless, the prize for those able to sit on their hands could be worth the wait. 

The post Could these small-cap stocks help future-proof your portfolio? appeared first on The Twelfth Magpie.

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Paul Summers 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.

Despite this, there are a number of shares which have the potential to beat the wider index. Here are two prime examples which could be worth a closer look.

Improving outlook

Reporting on Wednesday was specialist media platform, Future (LSE: FUTR). Its shares gained around 10% after it announced that it expects profit for the year to 30 September 2017 to be ahead of previous expectations. Trading for the year was positive, with the group delivering strong cash conversion which allowed year-end leverage to be less than one times adjusted EBITDA (earnings before interest, tax, depreciation and amortisation).

The company’s Media division performed well, with strong revenue growth – especially in eCommerce and events. Its Magazine division benefitted from the added scale and operational efficiencies of the Imagine Publishing, Team Rock and Home Interest acquisitions. They have improved the diversity of the company and, with integrations going to plan, the outlook for the business remains upbeat.

Future is forecast to post a rise in its bottom line of 31% in the next financial year. This puts it on a price-to-earnings growth (PEG) ratio of just 0.5, which suggests it could offer upside potential. Although the prospects for the FTSE 100 may be bright due to a weaker pound, Future could outperform the index in the long run.

High growth

Also offering index-beating potential is Burberry (LSE: BRBY). The company has made significant changes to its business model and management team, with a focus on improving efficiencies and becoming better organised. This could help to catalyse the company’s growth outlook, while demand for Burberry’s products also remains high. This is particularly the case in the emerging world, where the business has a strong foothold.

With the stock forecast to deliver a rise in its bottom line of 12% in the next financial year, it could see investor sentiment improve. Its PEG ratio of 1.7 may not be the cheapest in the index, but considering the high degree of customer loyalty and brand strength which it has, it appears to be a very fair price to pay.

With dividends expected to rise by 9% next year, Burberry could also become a more attractive income stock. It may yield only 2.3% at the present time, but with dividends covered twice by profit there could be high growth in shareholder payouts over the long run.

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Peter Stephens owns shares in Burberry. The Motley Fool UK has recommended Burberry. 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.