Two high-growth small-cap stocks I'd buy today

Updated: 
Computer Keyboard

The London Stock Exchange is home to many exciting smaller companies that are growing at breakneck speed. Here's a look at two such companies that I believe look attractive right now. 

Quixant

Headquartered in Cambridge, Quixant(LSE: QXT) designs and manufactures advanced hardware and software solutions for the global gaming industry. The company generated sales of $90m last year, and currently has a market capitalisation of just £288m.

Since listing on the AIM market in 2013 at an IPO price of 46p per share, the shares have delivered an incredible return of over 800%, and now trade at around 420p. Is it too late to buy into the growth story? No, in my view.

Interim results released this morning show that Quixant still has considerable momentum. Indeed, for the six months to June 30, group revenue surged 38% higher to $56.9m, and group EBITDA increased 74% to $10.1m. Fully diluted earnings per share for the half year came in at 11.05 cents.

The company announced back on July 24 that trading had been stronger than expected, and COO Jon Jayal this morning advised that he did not expect that level of trading to continue for the full year. He did, however, say: "We are clearly well placed to achieve market expectations for the full year. We therefore look forward to the remainder of the year and beyond with confidence."

City analysts expect full-year earnings of 20 cents per share this time, which at the current share price and exchange rate, places the stock on a forward P/E ratio of 28.6. That's a premium valuation, no doubt, but looks to be warranted in my view, given the company's track record and growth prospects.

Clipper Logistics

Another company that has only been public for a few years is Clipper Logistics(LSE: CLG), which floated back in 2014 at an IPO price of 100p. Today, the shares trade just under 400p, a gain of nearly 300%.

Clipper sees itself as a "new breed" of logistics company, suited to the rapidly changing retail environment. The company employs over 3,900 people, and clients include John Lewis, Harvey Nichols, ASOS and New Look. Essentially a play on the shift to online shopping, Clipper should benefit as consumers move away from the high street and make more online purchases that require delivery.

The logistics specialist generated sales of £340m last year, up from £290m the year before, and earnings per share for the year rose an impressive 20.5% to 12.5p. That growth facilitated a dividend hike of 20% to 7.2p per share.

City analysts have pencilled in top-line growth of 17% this year, and a 30% rise in earnings per share to 16.1p. If the company can deliver on those estimates, the forward P/E ratio of 24.6 doesn't look that unreasonable in my opinion. 

The fastest way to a million   

If you're in the market to make big gains, I'd urge you to read this exclusive Motley Fool report, 10 Steps to Making a Million In The Market.

The report is FREE, comes with no obligation and can be downloaded within seconds simply by clicking here.

Edward Sheldon has no position in any 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.