Can you afford to miss these two cheap growth stocks?

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The AXA Framlington UK Mid Cap fund is one of the UK's best performing equity funds. Over the past five years, the fund has returned a total of 139.2% compared to 71.1% for the UK All Companies Index.

Chris St John, who has managed the fund since 2011, knows how to pick small and mid-cap growth stocks. His equity picks over the years have helped the fund achieve these lofty gains, although there has also been a healthy dose of volatility along the way.

Still, despite the volatility, over the long-term the strategy has clearly yielded results. So, which companies is the AXA Framlington UK Mid Cap betting on right now?

Profits from plastic 

The fund's top holding, coming in at 3.4% of the equity portfolio, is RPC Group(LSE: RPC). RPC is plastics packaging business, a relatively boring business that flies under the radar of most investors. 

RPC's business may be boring, but the company is extremely good at it. Since 31 March 2012, the end of the company's 2012 financial year, revenue has expanded from £1.1bn to £1.6bn. Pre-tax profit has grown by around a third over the same period and earnings per share have risen from 31p to 43.3p.

Next year RPC's growth is expected to take off following yesterday's news of two acquisitions, which are set to transform the business. 

First off RPC is buying ESE World B.V., for a consideration of EUR262m. ESE is Europe's largest temporary waste storage solutions provider, with targeted revenues of EUR200m for 2016. The second acquisition is Astrapak, a leading South African manufacturer of rigid plastic packaging products and components. RPC is paying 1,370m Rand for the business (around £79m).

After these acquisitions, City analysts are now expecting RPC to report earnings per share growth of 39% for the financial year ending 31 March 2017, with earnings per share growth of 14% in the year after. Based on these figures, shares in RPC look undervalued to me. Specifically, the shares are currently trading at a forward P/E multiple of 17.5 and a PEG ratio of 0.4. A PEG ratio of less than one indicates the shares in question may offer growth at a reasonable price.

Growth at a reasonable price 

Another of the AXA's funds top holdings is online payments processor Paysafe(LSE: PAYS). Shares in Paysafe lost more than 30% of their value at one point earlier this week, when US firm Spotlight Research issued a damning report on the company claiming the business was facilitating illegal gambling in China and faces "material risks" from regulatory action. The research outfit also claimed that up to 50% of Paysafe's revenues were in danger. Paysafe's management has responded to these allegations by stating that all information was "either factually inaccurate or had previously been disclosed." Since this rebuttal, shares in the company have recovered.

That said, even after the recovery, shares in the company still look cheap to me. Paysafe is expected to report a pre-tax profit of £168m this year, up from £11.8m last year. The City is expecting the company to report earnings per share of just under 32p, which translates into a forward P/E of 11.7. Next year earnings per share growth of 14% is pencilled in. This kind of growth may be too hard for some investors to pass up. 

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