2 top growth stocks I'd buy in August

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Portmeirion

Tableware specialist Portmeirion Group(LSE: PMP) this morning announced a very positive set of results for the first half of its financial year, with both revenues and profits enjoying double-digit gains. After a lacklustre performance this year, could this be the kick-start the shares need to go on and outperform the rest of the market?

World-famous brands

The group, based in Stoke-on-Trent at the heart of the world famous Staffordshire Potteries region, is engaged in providing ceramic tableware, cookware, giftware and tabletop accessories. Aside from the Portmeirion brand, the company is also home to other world-famous labels, namely Royal Worcester, Spode, Pimpernel, and newly-acquired Wax Lyrical, the UK's largest manufacturer of home fragrances.

In this morning's half-year report the AIM-listed group reported total sales of £33.1m for the six months ended 30 June, 16% ahead of the same period last year. Pre-tax profits for the first half came in at £1.6m, an 18% improvement on last year, with earnings (before interest, taxation, depreciation and amortisation) up 27% to £2.7m, compared to £2.1m in 2016.

Waxing Lyrical

The UK became the group's largest geographical market this year following the acquisition of Lake District-based Wax Lyrical, and with sales in the US and South Korea, its second and third largest markets, remaining challenging, this would normally be an area of concern. But strong growth in Europe and Asia in particular means the company is reducing its reliance on its three key markets and continuing to diversify its sales to the rest of the world.

Despite its vintage image, I'm pleased to see the business isn't standing still, introducing new products, launching new ranges, and refreshing and extending existing collections. I think the acquisition of Wax Lyrical was a shrewd one, as this should help drive sales and further diversify the company's product range. At 14 times forecast earnings, the shares are well worth buying for the long term, in my opinion.

Ageing populations

Another London-listed firm announcing its half-year results this morning was FTSE 100 medical products business ConVatec(LSE: CTEC). I've been a fan of the group for some time, and indeed by the close of business yesterday, the shares were up 29% on my original recommendation at the start of 2017.

That said, this morning's results were frankly a little disappointing. Group revenue rose 0.3% to £831.3m, but operating profit suffered a 7.4% slide to £193.5m as a result of increased expenses, offset by higher sales and margins. Mr Market wasn't impressed and earlier in the day the shares were down by more than 9%.

But I sense a buying opportunity here, with long-term growth coming from ageing populations and the increased prevalence of the chronic conditions the company's products help to manage. A P/E rating of 20 isn't too demanding for a quality firm making inroads into an increasingly large market.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended Portmeirion Group. 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.