The StatPro Group (LSE: SOG) share price has doubled over the past two years, to 154p, albeit with some ups and downs. A little bit of that came on Thursday, on the back of an upbeat third-quarter update.

The company, which bills itself as a “cloud-based portfolio analysis and asset pricing services provider for the global asset management industry,” says all is in line with expectations. Annualised recurring revenue (ARR) at 30 September was up by 40% to £52.9m, including a contribution from Delta which was acquired in May.

Cloud-based software

‘Software as a Service’ is by far the biggest contributor to ARR, providing 83% of the total (up from 75% at the same time last year).

With the firm moving all of its software delivery to a cloud-based distribution, operating costs should be about as low as they can get, and that gives me confidence in its ability to generate cash.

The full year is forecast to bring in a 40% rise in earnings per share (EPS), with a further 45% pencilled in for 2018. That’s excellent, but whether to buy all depends on the valuation of the shares — and they look good to me.

P/E multiples of 30, dropping to 21, might seem a bit stretching, but I think they’re within a reasonable range for a growth prospect like this. And that’s supported by PEG ratios of 0.7 this year, falling to 0.5 next — anything around 0.7 or less is enough to excite me.

EPS did fall between 2012 and 2014, and the dividend has been held flat as a result and should yield around 2% this year, but I can see that picking up again in the next few years.

Chips, but not cheap

IQE (LSE: IQE) is a great company, supplying advanced semiconductor wafers made using an advanced crystal growth technology known as epitaxy, to companies fabricating leading-edge chips.

EPS has gone from 1.47p in 2012 to 3.17p by 2016 — and forecasts would see that rising to 3.9p by 2018. But I fear one downside — the typical growth share price spike, which I have seen happen so many times in my investing career.

When a stock like IQE is showing early promise and the share price is starting to pick up, many short-term investors pile in, hoping to make a quick profit. And that so often pushes the shares to early overvaluation, followed by either a sharp crash or a prolonged period in the doldrums.

Five-bagger

IQE shares have more than five-bagged over the past 12 months, to 135p, and those who bought early with a long-term view will be happy with that. But the price is already down from its peak of 160p in September, and those forecasts still give us a P/E multiple of over 40 for this year, dropping only as far as 35 in 2018.

That looks a bit pricey to me right now, and I’m also concerned that IQE is in a fickle business — it’s great at what it does, but so are others in a very competitive market.

Apple is one of IQE’s customers, and hopes that it will supply the new generation of iPhones seem high. But Apple is known for changing suppliers at the drop of a hat, and that’s a risk that should not be overlooked.

I like the company, but I think the shares are too expensive.

The post A small-cap growth stock I’d buy ahead of IQE plc appeared first on The Twelfth Magpie.

More reading

• 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?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Alan Oscroft has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Apple. The Motley Fool UK has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. 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 rather than reflecting a less-than-enthusiastic reception to the latest update, I reckon this signals nothing more than light profit-taking following recent hefty gains. The Wimbledon-based firm rose 16% in value in the three weeks to today’s release, topping out at 137p per share in the process.

Statpro, which provides portfolio analysis and asset pricing services to the global asset management sector, announced that revenues detonated 23% during the six months to June, to £21.62m. As a result, adjusted EBITDA rose 35% to £2.78m. And free cash flow registered at £3.52m versus an outflow of £2.44m a year earlier.

The company saw organic revenues edge 2% higher during January-June, although this was an improvement from the first half of 2016 when organic sales flatlined. And the software star saw demand for its standout StatPro Revolution product continue to swell — sales here rose 16% in the period.

Statpro also had sterling weakness to thank in large part for the half’s revenues improvement, with positive currency effects boosting the top line by 11%.

On cloud nine

City analysts certainly believe it has a very bright future, and this comes as little surprise to me. Not only does the firm’s transformation into a ‘Software as a service’ (or ‘SaaS’) star continue apace, but the acquisition of UBS Delta during the spring provides it with a better product suite, while the increased scale should also help margins to trek northwards.

So the Square Mile is predicting earnings increases to the tune of 41% and 44% in 2017 and 2018 respectively.

Many share pickers may be put off by the company’s elevated forward P/E ratio of 27 however, a figure that sails above the broadly-considered value benchmark of 15 times. I would argue though that a sub-1 prospective PEG reading of 0.7 suggests that StatPro is actually very-attractively priced relative to its growth prospects.

Growth giant

Intertek Group (LSE: ITRK) is another stock anticipated to report blistering bottom-line growth by the City’s army of analysts.

The product testing play is predicted to report an 8% earnings advance in 2017, and to follow this with a 7% improvement next year.

Intertek has been no stranger to rampant price strength in recent sessions either, the share shooting to new summits just short of £47 yesterday after brilliant half-year numbers of its own. The London company announced that revenues rose to £1.37bn during January-June, up 13.7% from the same 2016 period.

The FTSE 100 company continued to enjoy solid organic growth across its core divisions, it noted, with sales at its Products and Trade arms — collectively responsible for more than 90% of group revenues — rising 5.8% and 4.6% in the period.

It is hard to argue that Intertek can be considered decent value going on conventional metrics, the firm currently changing hands on a prospective P/E ratio of 25.4 times. Having said that, I believe the testing titan remains a very-attractive stock right now thanks to the brilliant revenues opportunities as the global quality assurance market continues to expand at a titanic rate.

The post 2 growth stocks that could make you stinking rich appeared first on The Twelfth Magpie.

More reading

• 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?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Intertek. 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.

Moneylender

Non-Standard Finance (LSE: NSF) is a sub-prime lender, only listed on the stock market in February 2015. Since then the shares have lost 39%, but they’re up 9% today to 66.7p after the release of first-half results.

The doorstep lender reported a normalised adjusted operating profit of £3.9m, compared to a £0.9m loss at the same stage last year. We still saw a reported loss per share of 1.67p, but that didn’t stop the company offering a maiden interim dividend of 0.3p per share. The firm’s loan book had risen to £146.8m by 30 June, including the effect of acquisitions.

Chairman John van Kuffeler said that “we remain on-track to achieve our targets of 20% annual loan book growth and a 20% return on assets in 2017.” The P/E drops to 10 on forecast 2017 earnings, so it could be a profitable punt if you’re happy investing in this kind of business.

Farming profits

NWF Group (LSE: NWF), a specialist agricultural and distribution business delivering feed, food and fuel, reported a 5.4% drop in first-half revenue today, to £465.9m, but got from that a headline pre-tax profit of £8.3m (up 2.5%) and headline earnings per share pf 13.6p (up 3%). Net debt in the period rose sharply, by 67.8% to £9.9m, though the agricultural and distribution firm did invest £10m “in development capital including three acquisitions.“

Chief executive Richard Whiting told us: “We continue to see opportunity for further strategic and operational progress and performance to date in the current financial year has been in line with our expectations.“

That suggests a modest full-year EPS fall close to the market forecast of 2%, putting the shares on a P/E of 12.4 and with a dividend of 3.6%. The shares were down 1% to 164p at the time of writing, and could well provide a steady long-term investment.

Financial services

Shares in StatPro Group (LSE: SOG) have soared by 44% since the middle of May, including a 7% hike today to 106p on the back of first-half figures. The “leading provider of portfolio analysis and asset pricing services for the global asset management industry” reported a 14% rise in revenue to £17.55m, with its StatPro Revolution service seeing a 64% revenue rise to £4.02m. Adjusted EBITDA is up 19% to £2.05m, leading to a 10% rise in adjusted earnings per share to 1.1p and an interim dividend of 0.85p per share.

Chief executive Justin Wheatley said: “Our strategy to convert our portfolio analytics and risk services to the cloud has secured us a significant technological lead in our market,” as the firm reported a 19% increase in its order book of contracted revenue to £44.13m.

After today’s price rise, StatPro shares are on a forward P/E of 37, dropping only to 29 based on 2017 forecasts, so we’re looking at a seriously demanding growth valuation for this £73m company — but it could be on the verge of great things.

The post Should you buy these three after today’s updates? appeared first on The Twelfth Magpie.

More reading

• 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?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Alan Oscroft 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.