1 high-growth stock I'd buy and one I'd sell

Petra Diamonds(LSE: PDL) has been an unmitigated nightmare for investors over the past 12 months, a steady stream of market updates causing its share price to halve from the start of 2017 to late last week.

And Petra was recently down an extra 18% on Monday after it downscaled its profits estimates for the full year.

The stones specialist advised that "due to due to the recent strengthening of the rand and its potential impact on Petra's cost base in US dollar terms," EBITDA for the year concluding June would likely fall 10%-15% short of market consensus.

But this was not the only scare story to come out today. The Jersey-based firm cautioned that full-year production will fall short of prior estimates -- this is now forecast at 4.6m-4.7m carats versus 4.8m-5m carats previously. Petra said that this is because of lower grades at its Cullinan mine, combined with the impact of industrial action in South Africa during the first quarter.

Jersey gore

As I said, this is not the first time it has spooked investors in recent times, and not just because of strikes in the turbulent mining territories of South Africa.

A disagreement with the Tanzanian government last year resulted in a crushing export ban, and prompted a warning in October that the company could breach its debt covenants. Petra advised today that this has banned a shipment from its Williamson mine and contributed to a 1% fall in revenues during July-December, to $225.2m. This parcel remains blocked for export, the company has said.

These operational problems and its colossal debt pile (net debt ballooned to $644.7m as of December from $613.8m three months earlier) are not the only troubling signs with the outlook for diamond prices less than reassuring too. Rough stone values dropped by 3.5% during the first half, although Petra noted that prices have improved in recent months.

Now City analysts had been expecting earnings to go gangbusters now and beyond, recent forecasts suggesting rises of 160% and 53% in fiscal 2018 and 2019 respectively. Today's update will see brokers downscale their expectations, of course, making the company's cheap forward P/E ratio of 7.1 times largely irrelevant.

Given the multitude of problems facing Petra, I would not touch the share with a bargepole right now.

Work it out

I would be much happier stashing the cash in The Gym Group (LSE: GYM) today, another share the Square Mile expects to report eye-watering earnings growth.

The fitness giant is expected to follow a predicted 34% earnings rise in 2017 with advances of 23% this year and 29% next year. And it is not difficult to see why as membership numbers soar (these leapt 35.5% last year to 607,000, due in no small part to its site opening scheme).

And thanks to its low-cost model, I expect the difficult economic environment in the UK to attract more and more people through its doors in the near term. And over a longer-term time horizon the London firm's expansion programme should deliver strong and sustained profits rises (Berenberg sees scope for the company's base to double to 250 sites eventually).

While the business carries a premium forward P/E multiple of 26.7 times, its corresponding PEG reading of just 1.2 suggests it is attractively priced considering current earnings estimates. In my opinion, The Gym Group is a growth star worthy of serious consideration today.

Don't regret ignoring this growth tip

It can be often prove difficult to find genuinely-great growth stocks, and particularly during periods of huge political and economic uncertainty like these. But we at The Motley Fool are here to help.

Our A Top Growth Share wealth report, written by the Fool's crack team of analysts, looks at a brilliant FTSE 250 stock whose global sales are expected to top the magic £1bn marker in the near future.

Click here to enjoy this exclusive wealth report.It's 100% free and can be sent straight to your inbox.

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.

///>