2 growth stocks with millionaire-maker potential?

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With concerns surrounding Brexit growing in recent months, many investors may feel it is difficult to find shares which offer upbeat earnings growth potential. However, not all stocks are set to post lower growth in 2018. There are a number of shares which have upbeat outlooks. Here are two examples of companies which offer just that. But are their valuations low enough to provide sufficient upside to help investors make a million?

Strong performance

Reporting on Tuesday was online fashion retailer ASOS(LSE: ASC). Its full year results showed  it's continuing to make strong progress with its strategy. Overall sales grew by 27% on a constant currency basis, although in the UK its performance wasn't quite so impressive. Domestic sales were up 16%, while international sales grew by 36% on a constant currency basis. This shows that the UK economy continues to offer an uncertain outlook for consumers, while market saturation and high levels of competition may also be holding the company's sales growth back to some degree.

Looking ahead, ASOS is forecast to record a rise in its bottom line of 27% in the current year. This is clearly highly impressive and shows that its continued investment in the customer experience is working well. Furthermore, the company is investing in its logistical capabilities while also seeking to innovate through new payment methods and additional language sites. These changes could help to spur its earnings to even higher levels over the medium term.

Of course, the major problem facing investors in ASOS is the company's valuation. It has a price-to-earnings growth (PEG) ratio of 2.3. This suggests that it currently offers a narrow margin of safety. At a time when many of its retail sector peers have low valuations and wide margins of safety, this could mean that the company is worth avoiding right now.

Potent mix

Offering a mix of growth, income and value potential at the present time is Bloomsbury Publishing(LSE: BMY). The company recently recorded sales growth of 19% in its trading statement, making progress in its consumer division in particular. In the next financial year, the business is forecast to report a rise in its bottom line of 7%. This puts it on a forward price-to-earnings (P/E) ratio of just 12.2, which suggests it could offer a wide margin of safety.

The company also has strong income prospects. Bloomsbury currently has a dividend yield of 4.4% from a shareholder payout that is covered 1.8 times by profit. This suggests that dividends could rise at a faster pace than profit without hurting the company's capacity to reinvest for future growth.

Since inflation hit 3% last month, stocks which are capable of offering a mixture of a high yield and strong dividend growth potential may prove popular. And, since many stocks in the index may be overvalued while the FTSE 100 is at a record high, the company's low valuation could add to its overall investment appeal.

Making a million

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended ASOS. 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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