Over the past five years alone, the company’s share price has risen from under 100p per share to its current price of 424p. Of course, the pertinent question to ask is whether the group can deliver this sort of return in the future.

I have my doubts, but given management’s proven ability to consistently beat already lofty investor expectations, I’m not ruling it out. There is certainly good top-line growth potential as the company extends its relationship with key customers to manufacture even more of their products ranging from high performance aluminium foil for industrial applications to advanced wound care products for global behemoths like Convatec.

In healthcare, growth is being driven by general market expansion, deepening already long-standing relationships with customers as well as small bolt-on acquisitions. At the industrial end, top-line growth will be more dependent on good global economic growth, but there is certainly potential for substantially increased profits as the group closes less profitable factories and shifts into higher-margin businesses.

Last year, the group’s revenue growth was a sedate 3.1% in constant currency terms, but a strong focus on margin improvements saw adjusted earnings per share lift 23% to 18.2p. While the top-line figure wasn’t all that impressive, management has shown in the past it can kick start growth when need be. And with net debt of only £3.8m at year-end, there is substantial firepower to make further acquisitions.

While the company’s stock isn’t cheap at 22 times forward earnings, I think it’s well worth looking at for growth-hungry investors thanks to it proven ability to boost revenue and an increased focus on increasing already decent margins.

Nuts and bolts 

Another small-cap that’s flown under the radar but kept shareholders very, very happy is Trifast (LSE: TRI), which has seen its share price rise over 265% in the past half-decade. This terrific share price performance is unsurprising when looking at Trifast’s financial reports with the company seeing an increase in revenue over the five-year period from £129m to £197m and underlying per-tax profits jumping from £9.2m to £22.2m.

This is down to a couple of factors. One is good general economic growth, which means more demand for the high-end fasteners Trifast makes. Then there is management’s decision to wisely move up the value-added ladder by investing more in R&D and working closely with customers.

While further global economic growth is uncertain given rising trade tensions, Trifast is well-placed to survive any downturn and actually expand at the expense of rivals due to very low-cost production facilities and net debt of just £7.4m at year-end. And with revenue right now fairly evenly split between the UK, Europe and Asia, the business is well diversified and has considerable growth prospects ahead of it in the massive US market that accounted for only 3% of turnover last year.

At 16 times forward earnings, Trifast isn’t cheap for a fairly cyclical firm, but with a strong record of organic and acquisition-led growth, as well as rapidly improving margins, I think its one to consider for growth-hungry investors.

The post Two small-caps with millionaire-making potential appeared first on The Twelfth Magpie.

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Ian Pierce 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.

Working hard

PageGroup (LSE: PAGE) hasn’t had the best of it in Wednesday trading after the release of full-year numbers caused investors to hit the sell button with some gusto.

The recruitment giant was last 6% lower on the day and toiling below 500p again, erasing much of the progress made following its trading update at the turn of the year. This represents a terrific buying opportunity, in my opinion.

PageGroup has slumped after warning that difficult conditions in the UK look set to persist. Gross profits here were 3.8% lower during 2017, and the FTSE 250 company commented: “We remain cautious in several markets as we progress through the year: primarily in the UK, where we will focus on protecting margins.”

Two things to remember, however. PageGroup sources just 20% of gross profits from its home territory. And in my opinion the brilliant progress the business is making in foreign territories provides plenty of fuel for optimism.

In its core Europe, Middle East and Africa (EMEA) division — a unit responsible for close to half of total profits — gross profits exploded 22.2% last year. Meanwhile, in The Americas and Asia Pacific they jumped 21.9% and 14.6% respectively in 2017.

The strength of these overseas territories powered group gross profits 14.6% higher last year to £711.6m. And PageGroup’s global investment plan reinforces my belief that business overseas should continue to boom. Its headcount swelled by 930 last year to take the total to a record 7,029.

City analysts share my optimistic take and are thus expecting the recruiter to keep its long history of earnings creation rolling. An 11% rise is forecast for 2018, and an extra 9% increase is predicted for next year.

Today’s share price reversal leaves it dealing on a forward P/E multiple of 16.5 times. This is very reasonable given its rising might across the globe.

Stick around

I also reckon Scapa Group (LSE: SCPA) is worthy of a place in your shares portfolio today.

Like PageGroup, the business — which makes adhesive-based products for the healthcare and industrial sectors — has a proud record of annual earnings generation. And it is expected to keep the run going with advances of 16% and 11% in the years to March 2018 and 2019 respectively, or so say City brokers.

Scapa might be pricey, the firm rocking up on a forward earnings multiple of 27.3 times. This premium rating is no surprise to me, however, given progress of the company’s profit-boosting self-help scheme.

At Healthcare, margins jumped 190 basis points in April-September, to 16.1%, and at Industrial, they jumped 220 basis points to 11.5%, and they were essential in increasing group trading profit 31.5% higher in the period to £16.7m. And the tape manufacturer has plenty more margin-boosting measures ready to be unleashed.

On top of this, Scapa’s Healthcare unit, a dependable revenues builder given the defensive nature of the market, has a raft of products slated for the next 12 months to give the top line a welcome jolt.

With its robust balance sheet also giving plenty of scope for M&A, I reckon the growth outlook for the near term and beyond is pretty compelling.

The post 2 growth stocks I’d stash in my ISA today appeared first on The Twelfth Magpie.

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Royston Wild 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.

First things first, I am hugely impressed at the rate at which its long-running self help strategy continues to bolster margins, achieved through a combination of contract execution and rigorous cost-cutting. At its Healthcare division, margins rose 1.9% between April and September, to 16.1% while, at Industrial, margins improved 2.2% to 11.5%.

Secondly, I like Scapa’s broad geographic footprint which provides terrific protection against macroeconomic turbulence in one or two regions.

And thirdly, I am encouraged by the tape manufacturer’s terrific progress in the defensive healthcare sector. Sales at Scapa’s Healthcare unit leapt 7.9% during the first fiscal half, to £57.7m, and it signed contracts with three major OEMs in the period.

Stuck on you

Now Scapa has a great record of doling out double-digit earnings growth, the business having seen the bottom line swell at a compound annual growth rate of 21.9% over the past five years. And City analysts believe there’s much more of where that came from.

For the year to March 2018, forecasts point to a 16% profits improvement and, in fiscal 2019, another 11% advance is predicted.

Meanwhile, expectations of extra heady earnings growth is expected to keep Scapa’s ultra-progressive dividend policy going. The Manchester firm lifted the dividend 14.3% in the last year to 2p per share, and additional meaty increases — to 2.3p and 2.6p in fiscal 2018 and 2019 respectively — are currently being anticipated.

These payouts yield 0.5% and 0.6% respectively, but such low readings would not discourage me given the possibility of Scapa becoming a lucrative income generator in the years ahead.

In my opinion Scapa is a top quality growth stock fully worth a premium P/E ratio of 25.5 times.

Flying high

I also like the investment outlook for Wizz Air (LSE: WIZZ).

The Hungarian business is a major player in the low-cost travel market, a segment that continues to grow at a stratospheric rate. And to cotton onto this rosy backdrop Wizz Air, like many of its rivals, is rapidly expanding.

Having snapped up two slots at London Luton from the collapsed Monarch Airlines in November, it announced it would station an extra two planes at the airport in a move that would bolster its capacity at the base by 18%, to 7.1m slots, in 2018. Wizz Air has big plans for its British base and it also announced three new routes (to Keflavik, Bari and Athens) from there just last week.

So City analysts are expecting earnings at the FTSE 250 flyer to rise 25% in the year to March 2018, and to increase 18% in the following period.

And these forecasts make Wizz Air a brilliant value pick. A forward P/E ratio of 17.8 times may not appear that compelling, although a corresponding PEG multiple of 0.7 really is.

Considering its exciting growth strategy and its exposure to the lucrative emerging markets of Central and Eastern Europe, I reckon Wizz Air is a steal at current prices.

The post 2 great growth stocks I’d buy right now appeared first on The Twelfth Magpie.

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Royston Wild 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.

One is Severfield (LSE: SFR), which has gone through several partial name changes in its history. The structural steel company suffered a tough patch and recorded a few years of losses, but since returning to positive (although very low) earnings per share in 2014, all the signs have been of an impressive recovery.

After a strong year to March 2017, forecasts suggest further growth in earnings for the current year together with steadily rising (and well covered) dividends, and Tuesday’s interim results supported that nicely.

The share price gained 11% to 71.5p after the company reported a 59% rise in underlying pre-tax profit to £12.9m, after revenue grew by 16%. Underlying basic EPS came in 56% ahead at 3.5p, and the first-half dividend was hiked by 29% to 0.9p.

Outlook getting better

Crucially, the firm reported a continuing strong cash performance, leaving it with net funds of £31.4m at 30 September (from £32.6m in March, but after paying some debts.)

With strong order books in both its UK and Indian markets, full-year results are apparently “expected to be comfortably ahead of previous expectations.”

We’re now looking at a modest forward P/E of under 12 based on current forecasts, and that will surely fall when they’re upgraded after the latest results.

The firm’s progressive dividend is tipped to yield 3.5% this year and 3.8% next. Looks like a buy to me.

Stunning growth

My next subject is a classic growth stock in the shape of Scapa Group (LSE: SCPA), whose shares have seven-bagged over the past five years, to 470p as I write — with the firm bringing in double-digit rises in earnings per share for years.

And though dividend yields are still low, they’re nicely progressive and we could be looking at a long-term cash cow.

Further EPS rises of 15% and 11% are forecast for this year and next, to which Tuesday’s interim results lent support. Though revenue grew by a fairly modest 7.5% (1.6% at constant exchange rates), adjusted pre-tax profit rose 33.1% with adjusted EPS up 29.7%.

Net debt is down from £16.1m to £3.2m, even after the £7.6m acquisition of Markel Industries.

The manufacturer of adhesive-based products for the Healthcare and Industrial markets saw both divisions doing well, with strongly increasing margins — up from 1.9% to 16.1% in the healthcare sector, with industrial margins up from 2.2% to 11.5%.

Why I’d sell

Impressive, so why would I sell? As I previously said in June, I think the shares are too expensive now, on a forward P/E of 27. I reckon I’m seeing the start of that phase which hits every classic growth share sooner or later, when early EPS rises start to slow down a bit and investors start taking profits.

In fact, since a peak in early June, Scapa shares have lost 9%, and though that’s very short term, they did dip a lot lower in September — and we’re seeing those erratic ups and downs that often mean the surefire enthusiasm of early investors is wearing off and they’re starting to look for the next big thing.

Scapa is a tempting company, but I foresee better buying opportunities to come.

The post One growth + dividend stock I’d buy today, and one I’d sell appeared first on The Twelfth Magpie.

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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.

The business, which specialises in the acquisition and disposal of firms that provide critical asset maintenance services, announced on Friday that trading during the first half of the fiscal year had been “in line with our expectations.”

Marlowe said that both of its Fire Protection & Security and Water Treatment & Air Hygiene divisions had “performed well” during April-September, with the four acquisitions made in the period “proceeding to plan and synergies in line with those anticipated on acquisition.”

On top of this, the AIM company advised that net cash clocked in at £3.1m as of the close of September, putting it in good shape to continue its acquisition-led growth strategy.

This should create plenty of optimism that Marlowe can churn out exceptional profits growth in the years ahead. Its aggressive M&A programme is steadily building its list of blue-chip clients, bolstering its territorial footprint, and providing the business with exceptional cross-selling opportunities.

And as the support services star itself alluded to today, the abundance of health and safety regulations that industry must now abide by provides plenty of scope for it to deliver excellent sales growth.

Fearsome growth forecasts

City brokers are certainly predicting big things for Marlowe’s bottom line. Current forecasts are putting earnings for the period ending March 2018 at 12.6p per share, which would mark a significant improvement from last year’s result of 1.1p.

And this rampant rise is not expected to be a flash in the pan — earnings are expected to bulge again next year, a 22% rise predicted to 15.4p.

What’s more, these stunning predictions are expected to encourage Marlowe to start chucking out dividends. A 4p per share reward is anticipated for the current period, yielding a handy 1.1%. And the London business is then predicted to keep rewards moving higher at quite a lick, jumping to 5.2p next year and yielding 1.4%.

I reckon Marlowe’s bright growth and income prospects make it worthy of its conventionally-high forward P/E ratio of 28.8 times.

Sticky star

Those seeking scintillating earnings expansion should also take a look at Scapa Group (LSE: SCPA) right now.

The Mancunian business has a rich history of doling out double-digit annual earnings increases and, thanks to its impressive work to improve margins across the business, is setting itself up to continue this trend.

And the firm — which manufactures adhesive products for healthcare and industrial markets – can rely on its position as a leading provider of turnkey solutions to the defensive medical market to keep pushing group sales higher. Revenues at its Healthcare unit punched 7.9% higher (or 2.1% at constant exchange rates) between April and September.

My view is backed up by City forecasts which point to profits growth of 15% and 11% in the periods ending 2018 and 2019.

I reckon Scapa’s impressive growth record makes it deserving of a weighty prospective P/E ratio of 27.9 times.

The post 2 growth stocks that could make you brilliantly wealthy appeared first on The Twelfth Magpie.

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Royston Wild 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.

Norcros (LSE: NXR), a supplier of branded showers, taps, bathroom accessories, tiles and adhesives, flies under the radar of most investors. Over the past year, shares in the company have hardly budged, despite a positive trading performance. 

Today the company published yet another set of upbeat figures. For the first half, management expects revenue to be 12% higher at £145m, up from £129m in the same period last year. UK revenue for the period was 8.4% higher than the previous year, while its South African business revenue was up 4.8% on a constant currency basis. A focus on cash flow has helped the business reduce debt from £27m to £21m year-on-year. 

Looking forward Norcros said: “Against the backdrop of challenging market conditions, our performance demonstrates the strength of our market positions and the resilience of our diversified business portfolio delivering revenue growth.“

Following this robust first-half performance, the firm expects results for its fiscal year ending March 31 2018 to meet its expectations.

Slow and steady 

This is one of my favourite companies. While it may not be the fastest growing business in the world, the group has reported stable double-digit revenue and profit rises year after year. Growth has come from both acquisitions and organically. Cash generation is high with the business converting around 100% of net income to free cash flow on average for the past five years. This has enabled management to pay a lucrative dividend to investors (currently 4.4%) and pay for acquisitions. Pre-tax profit has expanded fourfold since 2013. 

As long as management can maintain this course for the next decade, investors should be well rewarded. What’s more, at current levels the shares are a steal. Despite its historical growth and cash flows, the shares currently trade at a deeply discounted 6.1 times forward earnings. 

Pricey but attractive

Scapa Group (LSE: SCPA) is at the other end of the valuation spectrum. The company, which is a global supplier of bonding solutions and manufacturer of adhesive-based products for the healthcare and industrial markets, said yesterday that group revenue, trading profits, and margins are all ahead of last year. 

For the full-year, management now expects to beat analyst projections. Analysts had been expecting earnings per share growth of 11%. Off the back of this forecast, the market has awarded the company a forward P/E of 28.8. 

Scapa has managed to increase pre-tax profits threefold in the past five years. Considering the group’s leading position in its key markets, as well as the defensive nature of the healthcare industry, I believe that the business is a great long-term buy for investors. 

The one downside, however, is Scapa’s dividend yield. At the time of writing, the shares only support a yield of 0.5%. That being said, the payout is covered more than seven times by earnings per share, leaving plenty of room for further payout growth, or special dividends. 

The post 2 growth stocks I’d buy and hold for ten years appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns shares in Norcros. The Motley Fool UK has recommended Norcros. 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.

Scapa Group (LSE: SCPA) was recently 2% lower on the day and moving further away from recent record peaks after an unexcited market reception to latest trading details.

The tape-maker advised on Tuesday that “trading performance for the first quarter is in line with the Board’s expectations, with both Healthcare and Industrial performing as anticipated.

“Scapa is well positioned to make further progress this year and the Board remains confident about the Group’s outlook,” it added.

While reassuring, it is clearly no surprise to see the market fail to react significantly to this information, Scapa retreating further from June’s all-time highs above 515p per share. Still, I see it as merely a matter of time before the Manchester business reaches new summits.

Sticky business

Scapa has a long record of earnings growth behind it, and the Square Mile expects the adhesives giant to make further progress this year and next — bottom-line rises of 10% and 9% are forecast for the periods ending March 2018 and 2019 respectively.

A subsequent forward P/E rating of 28.2 times may sail north of the widely-considered value watermark of 15 times or under. But I reckon this is fair value given Scapa’s ample revenues opportunities.

The company saw sales gallop 13.3% higher in fiscal 2017, to £279.6m, it advised in May, the company benefitting from solid organic growth as well as significant FX tailwinds. Consequently, trading profit stepped to £29.2m, up 37.1% year-on-year.

And investors should take confidence from the the terrific progress of Scapa’s long-running self-help programme. Group trading profit margins moved into double-digit territory for the first time last year, marching to 10.4% from 8.6% in the prior period thanks to improvements at the Industrial division. And sales at the firm’s Healthcare arm breached the £100m barrier for the first time, rising 16.5% from 2016’s levels, to £108.7m.

I reckon there is still plenty of upside left in Scapa’s growth story.

Financial favourite

Sanne Group (LSE: SNN) is another London-listed stock forecast to deliver stonking earnings expansion in the near term and beyond.

For 2017, a 34% bottom-line rise is anticipated, continuing the firm’s record of mighty double-digit rises. And an extra 16% bounce is expected in 2018.

And these projections make Sanne decent value for money, in my opinion. While a prospective P/E ratio of 27.8 times may look expensive, a sub-1 PEG multiple of 0.8 suggests that the FTSE 250 play is actually attractively priced relative to its growth profile.

The financial giant, which provides asset and corporate administration services, saw group revenues stomp 40% higher in 2016 (to £63.8m) thanks to strength across all of its core divisions.

And Sanne has been extremely busy on the M&A front over the past year to extend its reach in both established and emerging nations to keep revenues on an upward tilt. Indeed, the business has made five deals since the start of 2016 in North America, Mauritius, South Africa, Ireland and the Netherlands.

With regulation of the financial sector becoming tighter across the globe, I believe Sanne is well placed to keep growing sales at a blistering pace.

The post 2 great growth stocks that could make you rich 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. 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.

Georgia is very much a developing economy, and though Bank of Georgia is the country’s largest retail bank, it still looks very much like a growth stock in the early stages of its lifecycle. Earnings have grown modestly over the past few years, but the real growth looks like it’s yet to come — analysts are expecting a 38% EPS rise for the year ended December 2012, with double-digit rises pencilled in for the next two years too.

That puts the shares on PEG ratios that are more often found with small growth companies —  BGEO is on a ratio of just 0.3 for 2016 results, with 0.4 and 0.5 on the cards for the next two years, based on a share priced of 3,581p.

Dividends too

The annual dividend has been a little erratic recently, but predictions suggest that the 2015 payment of 79p will be boosted by nearly 70% to 133p by 2018 — with the fall in the pound contributing a little to that.

This year is going well so far, with first-quarter profit up 24.3% to GEL108.2m (that’s Georgian Lari), which is approximately £35.6m, and basic EPS rose by 25.7% to GEL2.64 (87p).

There are always extra risks to face when you invest in the less well managed emerging markets of the world’s developing economies, and that’s certainly the case here — but then, UK banking regulations didn’t do a very good job here so recently.

And I reckon there’s more than enough in growth prospects at BGEO to cover the risk.

High flyer

The growth stock I’d sell now is Scapa Group (LSE: SCPA). But first let me tell you what I like about it.

Scapa makes adhesive products for the healthcare and industrial markets — and has achieved several years of double-digit growth which has seen earnings per share soar from 5.5p to 14.8p in just four years.

On top of that, the dividend, which stood at just 0.5p per share in 2013, had quadrupled to 2p for the year ending March 2017.

This year’s results included a 13% rise in revenue, leading to a 37% jump in adjusted earnings per share, with Scapa’s industrial division achieving its target of double-digit margins (something the healthcare division already enjoyed). And chief executive Heejae Chae told us “We have set the goals for the next phase of our growth which we are confident that we can deliver.“

Too expensive

I’m convinced Scapa’s long-term future is solid, but it has that ‘top-heavy growth share’ look about it that I’ve seen so many times over the years.

Growth is impressive, investors pile-in, there’s another cracking year of growth, more jump aboard… and eventually when growth slows and one set of results comes in a little behind expectations, everyone jumps ship and a big chunk is shaved off the share price.

Scapa shares have nine-bagged over the past five years to today’s 497p, putting them on a P/E of 30 (which implies another doubling in EPS is already built into the price) at a time when forecasts are indicating slowing earnings growth for the next two years.

For me the signs of an exuberant bull run coming to an end are all there.

The post One hot growth stock I’d buy right now, and one I’d sell appeared first on The Twelfth Magpie.

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Alan Oscroft has no position in any 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.

Shares of bonding and adhesive specialist Scapa Group (LSE: SCPA) climbed by 8% this morning, after the firm said that sales and trading profit should be ahead of expectations for the year ending 31 March.

It’s the second upgrade to profit guidance in five months — expectations were also lifted in November, at the time of the group’s half-year results.

Scapa’s business is making specialist adhesive tape for industrial and healthcare applications. This may sound like a dull business, but the share price has risen by 466% over the last five years and by 18% so far in 2017.

However, today’s statement makes it clear that exchange rate movements have made a big contribution to this year’s growth. Although sales in the healthcare division rose by 16.5% last year, only 5% of this was due to increased trading. And some of this growth was the result of an acquisition made in May 2016.

My reading of this is that underlying healthcare sales growth is less than 5%. If exchange rates stay flat, then this year’s comparable figures won’t benefit from a currency boost and could be much lower.

That’s not to say Scapa isn’t a good business. Cash generation is impressive. Its net debt is expected to have fallen from £29m to £16m during the second half of last year as the firm repays borrowings used to fund the £28.3m purchase of EuroMed in May.

Scapa stock now trades on a forecast P/E of about 27, with a prospective yield of 0.6%. That’s not cheap, but recent earnings upgrades suggest to me that Scapa may beat expectations again in 2017/18.

A breath of fresh air

Ventilation firm Volution Group (LSE: FAN) sells the kind of fit-and-forget product that no modern commercial building or home can manage without. Brands you may be familiar with are Vent-Axia and Manrose, but Volution has 13 operating businesses in total, serving a mix of countries and business sectors in northern Europe.

Companies whose products are dull but essential can often make great investments. Volution certainly seems to have promise, in my view. The firm’s stock has risen by 33% since its flotation in June 2014, and it now has a market cap of £382m.

The group appears to be expanding through a mix of acquisitions and organic sales growth. This seems to be working well. Volution’s adjusted earnings per share rose by 14.1% to 12.6p last year. This rate of growth was maintained during the first half of this year, when adjusted earnings rose by 14.1% to 6.54p.

These figures match the firm’s free cash flow almost exactly. My calculations indicate that free cash flow before acquisitions was about 12p per share last year, and about 6.5p per share during the first half of this year.

I’m always encouraged when a company’s free cash flow closely matches its earnings, as this suggests that its profits are genuine cash profits that can be used to fund growth and pay dividends.

Volution shares currently trade on a forecast P/E of 14 with a prospective yield of 2.1%. Although the group would be exposed to a major downturn in the European construction market, these figures look attractive to me. I believe further gains are quite likely.

The post 2 growth stocks you can’t afford to ignore any longer appeared first on The Twelfth Magpie.

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Roland Head has no position in any 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.

Record revenues

The company benefits from its multi-brand and multi-channel approach, with each of its brands having a distinct market position and an unrivalled proposition, attracting over 50m visits to its websites and apps every month. After another year of phenomenal growth, surely it’s time to finally join the party and share in the success of this fast-growing digital media group?

Well, there’s certainly been no let-up in growth that’s for sure, with the FTSE 250-listed company announcing record levels of revenue in its full-year results for FY 2016. During the 12 month period to the end of September the group delivered revenues of £197.7m, that’s an impressive 84% jump on the previous year, with pre-tax profits climbing from £33.6m to £46.2m.

Shrewd acquisition

The £75m acquisition of Property Software Group was also hailed as transformational to the business, allowing it to offer the UK’s only end-to-end solution for property professionals, including software, workflow, CRM and marketing tools. The group now has significant cross-selling opportunities, with over 23,000 property partners taking at least one of its services.

Zoopla continues to grow its huge and highly-engaged audience, with over 600m visits to its websites and apps during the course of the last financial year. But, of course, all this comes at a price, with the shares trading at record levels earlier this month after a mammoth 66% share price surge since the start of last year. I think the shares are due a market correction, and investors should perhaps put Zoopla on their watchlist and wait to pounce on the next big pull-back.

Strong first half

Meanwhile, another UK-based firm that’s been growing rapidly in recent years is AIM-listed Scapa Group (LSE: SCPA). The group, based in Aston-under-Lyne, manufactures bonding products and adhesive components for applications in the healthcare and industrial markets. It has manufacturing plants around the world and sells mainly in countries within Europe, North America and Asia.

Scapa announced a strong set of first half results at the end of 2016, with growth in revenue, trading profit and margins. Revenue was up 13.5% to £135.4m, compared to £119.3m reported for the same period a year earlier, with trading profit up 27% to £12.7m, and margins improving to 9.4% from 8.4%.

Strong growth is forecast to continue, but the shares now look fully valued with a forward P/E rating of 24, thanks to a 65% rise over the past year. I would wait to buy on the dips for further long-term growth.

The post GROWTH! Wait – don’t buy these shares just yet… 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?

Bilaal Mohamed 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.