Despite occasional profit lumpiness from factors beyond its control, this FTSE SmallCap firm, which is valued at £130m, has nevertheless delivered an impressive annualised total return for shareholders of 12.9% over the last 10 years (compared, for example, with 11.7% from blue-chip luminary Unilever).

Bright outlook

After a challenging year, the 2018 outlook for Carr’s is considerably brighter. In its agricultural division, a recovery in the US started in H2 and improved farmer confidence is evident in the UK. Meanwhile in engineering, the delayed major contract has come through and with the group’s August acquisition of NuVision Engineering also providing a good foothold in US nuclear markets, strong top- and bottom-line growth is forecast.

The analyst at Edison, which counts Carr’s as a client, has upped her normalised earnings per share (EPS) forecast from 11.6p to 12.5p, representing 33% growth on 2017’s depressed EPS. This forecast puts Carr’s on an undemanding price-to-earnings (P/E) ratio of 11.4 and a price-to-earnings growth (PEG) ratio of 0.35, which is deeply on the ‘value’ side of the PEG ‘fair value’ marker of one.

A forecast well-covered dividend of 4.2p, giving a yield of close to 3%, adds to the value on offer and I rate the stock a ‘buy’.

Re-rating

Also offering great-value growth, in my view, is AIM-listed but long-established M. P. Evans Group (LSE: MPE). At a share price of 820p, this palm oil producer from plantations in Indonesia is valued at £450m.

You’ll probably recall that the market re-evaluated Unilver’s shares after the Anglo-Dutch group rejected a bid from Warren Buffett-backed Kraft Heinz earlier this year. A similar thing happened with M. P. Evans. The value of the London-listed company was markedly lower than that afforded similar firms listed in Asia and a bid came in from a Malaysian conglomerate at 640p a share, followed by an improved offer of 740p. The board, backed by major shareholders, rejected the offer, saying it “very substantially” undervalued the company.

Still undervalued

While the shares are now up to 820p, I believe M. P. Evans remains undervalued. For one thing, an independent assessment of its assets, which it commissioned at the time of the bid, gave its equity an implied value of 1,082p a share. For another, the current price looks to markedly undervalue the EPS growth in the offing. The consensus forecast is for a 39% increase to 31 cents (23.7p at current exchange rates), followed by a 52% rise to 47 cents (35.9p) for 2018. This gives a P/E of 34.6, falling to 22.8 and an attractive 2017/18 PEG of 0.44.

With additional value from a running dividend yield of 2.2% (excluding special dividends) and the board committed to paying “enhanced dividends,” this is another growth stock that looks very buyable to my eye.

The post These small-cap growth stocks could still make you incredibly rich appeared first on The Twelfth Magpie.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. 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.

Victoria designs, manufactures and distributes innovative flooring, and I see a good investment lesson there — while many folk try to identify the next hot technological or business development when looking for growth shares, there are plenty more seemingly mundane opportunities right beneath our feet (literally, in this case).

Of course, hindsight is not really much good as an investment tool as it doesn’t say anything at all about the future, so what are the prospects for more of the same from Victoria?

Solid growth

I reckon they’re pretty good as I see the company growing organically and by acquisition. Analysts have an EPS rise of 22% forecast for the year to March 2018, giving us a forward P/E of 21 — and a further 10% boost the following year would drop that multiple to 19, and I think that’s decent value for such a tempting growth pick.

On the acquisition front, Victoria has just snapped up Ceramiche Serra of Italy, a ceramic flooring manufacturer, for up to €56.5m (£50.4m). Of that sum, €20m (£17.8m) will be held back and paid over the next four years, providing the business achieves its annual targets. That sounds like a canny acquisition strategy to me.

I’ll leave Victoria with a quote from executive chairman Geoffrey Wilding from the firm’s full-year results report in July: “I suspect few shareholders truly appreciate just how big our market opportunity in the UK and overseas is.“

Oil prospects

I’m talking palm oil here, and I don’t know how many investors see that as a big growth business. But I do, and I’ve been taking a look at M. P. Evans Group (LSE: MPE), which operates palm oil plantations in Indonesia.

At 815p and on a forward P/E of 34, dropping to 23 by 2018, many will not see the shares as good value. But I do, and it appears the company does too as it’s been buying them up for cancellation all year.

EPS has been volatile and flat overall for a few years, but that doesn’t bother me too much as the long-term nature of the plantation business means earnings don’t always fit conveniently with a company’s short-term reporting calendar.

The dividend is a bit erratic too, averaging around 2% to 2.5%, but I reckon there’s a good chance of a long-term progressive policy coming to the fore.

Ready for take-off

In its interim report on 30 June, the firm spoke of the maturing of its young plantings, revealing a 26% increase in crop as that continues. Actual crude palm oil production rose by 56%, and the firm saw its operating profit almost trebling — boosted by a 10% rise in the price of the valuable commodity to $735 per tonne.

Big forecasts for a 40% EPS rise this year, followed by a further 49% next, have given the shares a very handy boost, and they’ve doubled in just over 12 months.

Palm oil is used in so many industries, including food production, soaps and cosmetics, biofuel and bioenergy, and pharmaceuticals, that I see continued growth in demand for the stuff.

I reckon Victoria is a good long-term buy.

The post A 15-bagger growth stock that could have a lot more to give appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Alan Oscroft 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.

Production and profits on the rise

Shares of KAZ Minerals (LSE: KAZ) are up 34% in October, extending their rise since the start of the year to 190%.

This FTSE 250 Kazakhstan copper miner is ramping up production at its Bozshakol and Aktogay projects. The company produced 81 thousand tonnes of copper cathode equivalent in 2015 but expects production to rise to 135,000 to 145,000 tonnes this year.

City number crunchers reckon the increased output will drive a leap in pre-tax profit from £8m to £80m, followed by a rise to £148m in 2017. KAZ is trading on a modest 12 times 2017 forecast earnings at a current share price of 296p, which suggests the shares could continue to advance.

However, I’m a little wary of the geographical concentration of KAZ’s assets and its high level of net debt — $2.6bn versus a market capitalisation of £1.4bn ($1.7bn) — although the company says it has “strong support” from its lenders.

“Substantially undervalued”

M. P. Evans (LSE: MPE) has gained 49% in October after the shares shot up last week on a takeover bid. The bid came from £5bn Malaysian conglomerate Kuala Lumpur Kepong (KLK). At 640p a share it valued the AIM-listed owner of palm plantations in Indonesia at £360m.

M. P. Evans rejected the approach, describing it as “highly opportunistic.” The board said the offer “is wholly inadequate and very substantially undervalues the company, its unique position and its future growth potential.”

Peer companies listed in Asia are valued more highly and M. P. Evans’ board has the backing of a majority of shareholders, who are reportedly looking for an offer of at least 780p.

So, this is very much a gamble on whether there’ll be a higher offer — from KLK or another party — and whether any offer that may be made will be high enough to satisfy shareholders. My hunch is there may be value in M. P. Evans at its current price of 618p, but I’m not going to commit money on a hunch.

The Kaye factor

Restaurants group Richoux (LSE: RIC), which operates the Richoux, Dean’s Diner and Villagio brands, has looked like a business lacking direction for a long time. However, that looks set to change with the company announcing that Jonathan Kaye is to be appointed as chief executive. Kaye is the founder and former boss of Prezzo and comes from a family that has successfully rolled out numerous restaurant chains, including Ask and Zizzi.

Richoux is seeking shareholders’ approval for a generous incentive plan for Kaye, which will give him 14% of the company if the shares reach 40p, rising to 20% if they reach 55p. The company also needs to get a waiver from the Panel on Takeovers and Mergers, because members of the extended Kaye family already have a sizeable shareholding in Richoux.

I’ve little doubt that the plan will be approved and the waiver granted. I also have little doubt that Kaye has the ability to deliver. The shares are up 38% in October to 29p (they spiked as high as 38p at one point) and I believe Richoux might just be a canny investment, based on its valuation of two times current sales and the Kaye factor.

The post Are there more gains to come from October’s stock market flyers? appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

G A Chester 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.