Revealed: Peel Hunt’s top growth stocks for 2018, from Asos to Just Eat
Brushing aside the warnings of a stock market bubble ready to burst, which have been flying around in recent weeks, broker Peel Hunt today released its list of top growth stocks for 2018.
Based on earnings per share and sales, over the last two years and the next two years’ predictions, Peel Hunt’s selection ranges from Just Eat to clothing retailer Asos to Nostrum Oil & Gas.
The broker noted that 2017 had been a strong year for growth stocks, with the earnings per share of its selections from 12 months ago increasing by an average of 28 per cent. Top performers included estate agent Purplebricks, support services business Restore, price comparison site GoCompare and retailer B&M.
Read more: Hargreaves Lansdown’s five stocks to watch in 2018: From life insurance to Irn Bru to that well-known heritage check
These were the top ten of Peel Hunt’s picks with the largest predicted earnings per share growth in 2018:
Company
Estimated 2018 earnings per share growth
Reasons for pick
Serica Energy
356 per cent
Around the middle of 2018, Serica is expected to complete the acquisition of reserves in three fields from BP.
MP Evans
50 per cent
The agricultural business is increasingly focused on producing Indonesian Palm oil, which analyst Charles Hall said makes it easier to understand and a more attractive acquisition target.
Nostrum Oil & Gas
48 per cent
Nostrum intends to complete the acquisition of a gas processing plant in April, which should lift production growth.
Atalaya Mining
48 per cent
Two growth projects at the company are set to make copper output jump. The first is an expansion at the Rio Tinto mine, and the second should be completed by 2020.
Just Eat
39 per cent
The takeaway delivery company has huge opportunities in the form of orders shifting increasingly online, continuing to win discounts for its restaurants by making deals with firms such as Booker and Coca Cola, and broadening into areas such as analytics and insight.
The Gym Group
28 per cent
A a strong self-financed expansion programme was Peel Hunt’s main reason for picking the budget exercise chain. The introduction of premium pricing plans could also produce positive results.
B&M European Value Retail
27 per cent
The discount retailer is one of the few adding space in the UK, and its business model is working well. It also has a new chief executive, who Peel Hunt said “looks more than capable”.
Asos
27 per cent
Asos has become almost synonymous with online fashion retail. It boasts high levels of innovation and relevant brand churn, and has recently launch ath-leisure and relaunched beauty ranges.
Charter Court Financial Services
26 per cent
The specialist mortgage bank has strong balance sheet growth and operational leverage. What’s more, Charter Court should benefit from new underwriting standards for complex landlords.
On the Beach
25 per cent
The holiday website has a structural cost advantage relative to its main tour operator competitors, which is helping it to increase market share and further reduce holiday costs. It has continued to invest and should benefit from moving into new markets.