3 top stocks you've been overlooking

The Motley Fool
Total Produce
Total Produce

Fresh fruit and veg grower and distributor Total Produce(LSE: TOT) is an easy company to overlook, but shares of this under-the-radar large-cap are up over 350% in just the past five years. Now, the fresh produce industry isn't exactly a high growth one, so what has been behind this massive increase in share prices? Total's insistence on expanding at a rapid clip beyond its core European markets.


The primary focus for recent expansion efforts is the massive North American market and through a combination of organic growth and acquisitions it's targeting $1bn in sales in the coming years. This number will only grow as the company redirects retained earnings into further acquisitions in the US as well as in operations further afield, including India.

The fresh produce market is a sector with very slim margins, which means economies of scale are incredibly important. With over EUR3.4bn in annual revenue, this works in Total Produce's favour by creating a wide moat to entry for competitors. Likewise, the defensive nature of the sector gives it room to breathe during any economic downturn. The shares aren't super cheap at 15 times forward earnings, but with a long history of successful acquisitions and a healthy balance sheet, I reckon there's more growth on the cards for Total Produce.

Cashing in on cashless trend

Having only gone public in late 2015, card payment processor Worldpay Group (LSE: WPG) has flown under many investors' radar despite a solid history of growth. Worldpay is benefitting from the global shift towards non-cash payments and in just the first six months of 2016 processed over 7.2bn payments worth over £200bn.

Taking a cut of these transactions provided Worldpay with net revenue of £539m during the period, a 16% increase from the same period a year prior. This is a highly cash generative business and the company has been ploughing proceeds back into growing its online payments business, as well as expanding into new countries. This is a growth tech stock with a commensurate lofty valuation, currently 23 times forward earnings. But with plenty of growth potential from the core UK market as well as new regions and platforms, Worldpay isn't a stock to sleep on.

Margin marvel

One fast growing tech stock that may escape investors' attention due to its ubiquity is online property platform Rightmove (LSE: RMV). With a 77% market share Rightmove is the dominant platform in the UK, a position that management has leveraged into high prices from the estate agents that list on it.

High prices combined with an asset-light business model equals high margins. In the first half of 2016 operating margins hit an astounding 74.6%. The low-cost nature of running a property portal also means it's been relatively cheap and easy for Rightmove to expand overseas. In H1 it saw over 50m searches for homes overseas, which is a fraction of the total 750m searches in the period but is growing quickly.

With overseas growth presenting a huge opportunity, unbelievable cash generation from core UK operations and very high dividends and share buybacks, I believe Rightmove is worth a closer look, even with the shares trading at 27 times forward earnings.

Can investors beat Rightmove's 200%+ five-year returns?

The Motley Fool's Top Growth Share of 2016 certainly has. Shares of this classic British brand are up over 250% in the past half decade as the company's stunning record of increasing sales every year since going public in 1997 shows no signs of stopping.

The Fool's Head of Investing believes that with international expansion just heating up, the shares have the potential to triple again in the coming decade.

To read your free, no obligation copy of the report on this stellar growth stock, simply follow this link.

Ian Pierce has no position in any shares mentioned. The Motley Fool UK has recommended Rightmove and Worldpay. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.