It looks like the first part of that has already happened to Veltyco Group (LSE: VLTY), whose shares have quadrupled in the past 12 months — but are they expensive now?

Veltyco, which is in the business of marketing for the online gaming, lottery and binary option businesses, only came to market in June 2016.

At the time, it was already profitable — but only just, with a mere £60,000 pre-tax profit reported by December 2016. So it’s understandable if investors were wary at that early stage.

Cracking results

But first-half results were seriously impressive, after revenues tripled to €6.4m and beat the entire previous year, and EBITDA five-bagged to €3.8m (which was 80% up on the whole of 2016).

At this stage I think we’re looking at a potential cash cow, with the company reporting interim net cash of €1.3m and telling us it’s considering paying a maiden dividend in 2018, depending on how 2017 full-year results turn out.

And that share price… it picked up 10% in morning trading Wednesday after Veltyco revealed a new partnership with video game competition site Esports.com, and said it has taken a small stake in the company too.

With the shares at 94p, as I write, what about valuation?

Even after such a meteoric rise, full-year forecasts are so strong we’re still only looking at a forward P/E of around 12, dropping to 11.6 on 2018 expectations.

I can only see further growth here.

Finally got it right?

After years of volatility and no overall price gain in nearly 20 years, shares in Games Workshop Group (LSE: GAW) have taken off like a rocket over the last year — they’ve more than trebled in value in 12 months to 2,030p.

After a gradual climb, June’s trading update ahead of full-year results inspired a spike, and since then it’s just been up and up. In the end, the year to May 2017 saw a 127% rise in pre-tax profit coupled with an 84% hike in operating cash generation.

Earnings per share more than doubled to 95.1p, and the dividend was lifted by 85% to 74p per share.

Chief executive Kevin Rountree described the year as a “fun and exciting” one, suggesting that “prospects for the business are good” — and at least the second part of that seems modest.

Strong margins

A sales boost from the fall in sterling has certainly helped, as most of the company’s sales are overseas, but I see another long-term cash cow here too. Games Workshop’s margins are high, with a very impressive gross margin of 72.4% for 2017, and it really doesn’t require a lot of capital expenditure to keep it going.

And though it’s taken a long time for the share price to get moving, the company has been paying out handsome dividends for years.

This year is already off to a good start, with Q1 sales and profits “well above the same period in the prior year” and the firm telling us we should be seeing expectations-busting results this year.

Forecast dividends of 100p would provide a yield of 4.9% with the shares on a P/E of 15, and that looks good to me.

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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 stock has gained 350% in value since last September, and added 14% in Monday business alone following a buoyant response to half-year numbers.

Veltyco — which provides marketing services to the gaming, binary options and lottery sectors — advised that revenues tore 202% higher between January-June, to €6.36m, a result that exceeded total sales worth €6.08m punched in the whole of 2016.

As a result, EBITDA in the period exploded 410% in the six-month period, to €3.8m,

Commenting on the interim results, chairman David Mathewson said: “It has been an exciting first half year of 2017 for the group and we are very happy to see such a strong trading performance during this period, which produced very good results for the period reported.”

And this fizzy first-half result was not the only reason for Veltyco to celebrate. Indeed, Mathewson noted that “trading in the third quarter of 2017 continues to be strong and we now expect the business will exceed current market expectations for the full year.”

The Isle of Man-based firm completed the acquisition of 51% stakes in both the Bet90 online operations and Tippen4you.com operations in the period. And the Veltyco chairman advised that the company “[continues] to review potential acquisition opportunities which fit into the company’s profile.”

Profits ready for lift-off?

So it should come as no surprise that the City expects earnings at Veltyco to shoot higher in the near term and beyond. In 2017 earnings are predicted to swell to 7.1 euro cents per share from fractional earnings last year. And another further meaty increase, to 8.1 cents, is forecast for 2018.

Moreover, current forecasts make the marketing star great value for money — a prospective P/E ratio of 15.5 times falls just roughly in line with the widely-considered value yardstick of 15 times. I reckon this makes Veltyco worthy of serious attention given the titanic revenues potential of its M&A strategy.

Another growth great

4Imprint Group (LSE: FOUR) is another ‘under the radar’ share that has continued marching skywards in recent times. Indeed, the marketing products producer has seen its share price surge by around a quarter during the past six weeks following a bubbly reception to half-year results back at the start of August.

4Imprint advised that revenues rose 11% between January and June, to $298.1m, a turnout that propelled underlying pre-tax profit 15% higher to $16.5m. Stock pickers piled in on news that “organic revenue growth in both North American and UK markets continues to outpace the growth rates of the industry as a whole,” with both customer numbers and orders continuing to steadily rattle higher.

And City analysts expect earnings to keep galloping northwards. Bottom-line rises of 10% are chalked in for both 2017 and 2018, and while current forecasts may produce a slightly-hefty forward P/E ratio of 24 times, I reckon this still represents decent value given 4Imprint’s terrific sales momentum.

The post 2 little-known growth stocks with exciting momentum 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.