2 FTSE 100 growth stocks that I'd buy before September
There are plenty of beautiful growth stocks across the FTSE 100 that I am considering buying right now.
Some of these brilliant shares are due to release new trading updates in the coming weeks, a number of which I am expecting to impress. With this in mind, I'm discussing two of these Footsie stars whose share values could be about to swell.
Paper tiger
If latest releases by Mondi and Smurfit Kappa are anything to go by, then expect fresh financials from DS Smith(LSE: SMDS) to send the Footsie's packaging powerhouses' share prices higher again. The latter is due to release new trading details at the time of its AGM on September 4.
These operators saw profitability crimped by higher input costs during the last year, although more recently they have been successful in passing these bloated expenses on to their clients. DS Smith in June advised that this ongoing recovery had helped pre-tax profit jump 8% at constant currencies to £292m during the 12 months to April. Another reassuring release on this front could see investor appetite for the box-maker rise again.
Its low valuation, a forward P/E ratio of 13.9 times, certainly provides the platform for another share price spurt should it announce news of additional profit progression and extra cheery details about market demand next week. Organic corrugated box volumes rose 5.2% in fiscal 2018 (the year to April 2018).
With City analysts expecting earnings progression of 10% this year and 8% next year, I don't expect anything less than another upbeat release. I would buy the stock today in anticipation of renewed share price strength.
The gambler
An upcoming trading release from GVC Holdings (LSE: GVC) could be enough to send its share price shooting higher too. Half-year trading details are slated for release on September 13.
Like DS Smith, the online gambling colossus is not rated highly by the investment community. It carries a prospective P/E multiple of 14.2 times and a corresponding, sub-1 PEG readout of 0.3. Still, this lays the base for the company to retest the record peaks of around £11.70 per share set in July.
The current record was set on the back of GVC announcing a joint venture with MGM Resorts International to establish a sports betting and online gaming platform in the gigantic US market. The FTSE 100 company has long been teasing investors with the prospect of a mega deal across the Atlantic, and through its cutting-edge technologies and popular brands it is well placed to make a fortune from this market.
I've studied the brilliant growth opportunities that it has thanks to the rapid growth of the online gambling segment, a phenomenon which the firm's latest trading update in July laid bare. Net gaming revenues (NGRs) bumped 8% higher during January-June, with online NGRs rising 18% in the period. In fact, the release showed revenues generated via cyberspace picking up the pace too, with NGRs up 22% in the second quarter.
Given this progress it's not surprising that City forecasters have been upgrading their earnings estimates in recent months. They are now predicting profits growth of 55% in 2018 and 10% next year. And I wouldn't be surprised to see further upgrades should GVC note that it has made up even more ground since the start of the second half of 2018.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended DS Smith and GVC Holdings. 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.
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