Sunday, May 19, 2024

August’s Top British Growth Stocks

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Technology equities and brick-and-mortar experts were among the top growth shares that our freelance writers revealed they would purchase in August.

Here are their top growth stock picks for August, which we ask our contributor investors to share with you each month.

FRP Advisory

What it does: FRP offers guidance on debt, pensions, and restructuring to enterprises experiencing financial difficulties.

Through Royston Wild. For UK investors, finding high-quality growth stocks to buy is getting harder. Forecasts for corporate profits are becoming increasingly strained due to rising inflation and stagnant economic development.

However, FRP Advisory Group (LSE: FRP) is a stock that stands to gain from these worsening circumstances. The company offers various advising services to struggling businesses, the number of which is rising in Britain. Higher interest rates make it harder for businesses to repay their loans.

Mazars Accountants, a tax, audit, and consultancy organisation report that the number of corporate insolvencies has increased by 19,191 or 70% in the last year. Sadly, it has also issued a warning, stating that “the bleak prognosis means more hardship for businesses is expected.”

More lately, FRP’s stock price has fallen. This is due to growing costs that resulted in declining profitability in its most recent fiscal year (to April 2022).

Kainos

What it does: As a technology provider, Kainos aids both public and commercial organisations in their digital transformation efforts.

By Edward Sheldon, CFA. As growth shares have lost popularity this year, shares in Kainos (LSE: KNOS) have undergone a considerable downturn. I believe this has produced a compelling investment opportunity.

As businesses and government agencies use technology, Kainos benefits, and this is reflected in the group’s financial performance. Revenue increased 29% over the previous fiscal year, which ended on March 31, 2022. The group’s contracted backlog stood at £260 million at the end of the year, up 26% from the previous year.

I believe Kainos will keep expanding at a healthy rate in the future. This is so that businesses may reduce expenses and outpace inflation thanks to digital transformation. It’s important to note that Brendan Mooney, CEO, recently claimed that demand for the firm’s services has “never been higher.”

This growth stock isn’t cheap, mind you. Its P/E ratio is currently in the upper 20s. This increases the investment case’s risk. I think the company will eventually pay off long-term investors like me.

DotDigital

DotDigital is a SaaS provider of a platform for omnichannel marketing automation and client engagement.

From Zaven Boyrazian. In 2022, the technology industry hasn’t received much support. There are still many exciting prospects for my portfolio, despite the volatility. DotDigital has attracted my interest recently (LSE: DOTD).

Top-line growth slowed down due to the pandemic’s tailwinds, surprising many momentum investors. However, income still grows at a decent rate even without these drivers. The company’s most recent trading update revealed an average revenue per customer increase of 16.8%.

Consequently, customers are spending more money on the firm’s marketing strategy. In addition, marketing email volumes are up 22% to 29.4 billion from a year ago, despite the uncertain economic outlook. The corporation will benefit from all of this, especially considering the stiff competition it faces from competing platforms.

DotDigital looks like a great growth addition to my portfolio this month when combined with what, at first glance, appears to be a low value.

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