Why I'd buy this growth stock as well as Boohoo.com plc

The Boohoo(LSE: BOO) share price is well over 40% below its high of last year. I believe this represents a great buying opportunity and I'll tell you why shortly. But first I want to discuss another stock with fast-growing earnings, which I'd also be happy to buy right now.

The company in question released its annual results this morning. It reported a record year of production and profit, with operating profit increasing 72%. The shares are trading modestly higher but I reckon the valuation remains compelling.

A different kind of oil company

MP Evans(LSE: MPE) is a producer of palm oil through the ownership, management and development of sustainable oil-palm estates in Indonesia. It also manages and develops smallholder areas attached to some of the estates.

The company reported a 9% increase in group crops for 2017 and a 23% increase in palm oil production. Revenue from continuing operations increased 39% to $116.5m and fed down to an 83% rise in earnings per share (EPS) to $0.407 (28.7p at current exchange rates), compared with City expectations of $0.31 when I last wrote about the company in November.

Highly attractive valuation

At a current share price of 760p, the trailing price-to-earnings (P/E) ratio is 26.5. Analysts are forecasting a 39% increase in EPS for 2018, which brings the forward P/E down to 19 and gives a highly attractive price-to-earnings growth (PEG) ratio of 0.5. Furthermore, earnings are forecast to continue powering higher beyond this year. This is because the group's plantings are relatively immature, "underpinning an upward trend in crop that is expected to last until the end of the next decade."

The future looks bright, with the company's strong balance sheet also enabling it to invest in further acreage, as well as paying dividends. Ordinary dividends totalling 17.75p for 2017 (up 18% on the prior year) give a running yield of 2.3% and payouts look set to continue rising strongly in the coming years.

Finally, turning from earnings and dividends to assets, I find a similarly attractive picture. Based on an independent valuation of the group's properties, the directors estimate a group equity value of 1,096p a share, putting the shares at a discount of over 30%.

Long growth runway

Online fast fashion retailer Boohoo has fallen out of fashion with investors. I put the hefty decline in its share price down to three things: general market weakness, concerns about UK consumer spending and, probably most importantly, a less scintillating profit outlook than the market was previously anticipating.

We're looking at somewhat lower profit margins ahead, with the company intending to keep prices down and spend more on promotions and marketing. I believe this is the right strategy as Boohoo continues to reel in new customers not only in the UK but also increasingly in the US, Europe and the rest of the world.

The City expects EPS of 2.8p (an increase of 27%) when the company reports results for its financial year ended 28 February later this month. At a current share price of 150p, the P/E is over 50. However, Boohoo has a long growth runway and with annual EPS growth forecast to continue at a high-20s percentage for as far as the eye can see, I believe the premium P/E is worth paying.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended boohoo.com. 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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