The FTSE, and especially the FTSE 100, has a reputation for being home to some of the highest-paying dividend stocks globally. However, that doesn’t mean that FTSE-listed stock can’t offer world-beating growth.
In fact, Schroder UK Mid Cap fund manager Jean Roche says you’re more likely to find multibaggers — stocks that surge by 100% or more — on the UK stock market than you are in the US. She has the figures to back this up too.
So, which stocks have been leading the way in the UK?
Mega returns
Over the past 12 months, a period that includes the last two weeks of 2023, the FTSE All Share index is up 7%. However, some stocks have vastly outperformed this, delivering growth in excess of 100%. Some of these stocks are household names, but others may be less familiar to investors.
Stock
One year share price growth
Funding Circle
261%
CMC Markets
167%
Metro Bank Holdings
150%
Greencore Group
117%
Hochschild Mining Plc
114%
Oxford Biomedica
113%
Trustpilot Group
111%
Rolls-Royce
103%
Just Group
89%
Curry’s
88%
A quick glance highlights that growth has come from a wide variety of companies, including financial services like CMC Markets, banks like Metro, engineering giants like Rolls-Royce, and retailers like Curry’s.
Collectively, these 10 stocks returned 131% over the past 12 months. That means £1,000 invested a year ago would be worth £2,310 today, plus any dividends received over the period.
Finding the next big winner
Finding the next big winner is easier said than done. Among UK stocks, investors could consider IAG, which offers both strong momentum and attractive fundamentals.
However, over the next years investors are perhaps more likely to find the next multibagger in the US. This is thanks to current trends in artificial intelligence (AI) and the buzz around quantum computing.
One stock benefitting from the AI revolution is Celestica (NYSE:CLS). The company’s success is driven by strong demand for its cloud and communications infrastructure products, crucial for AI development. In the last reported quarter, Celestica’s Connectivity & Cloud Solutions segment saw a 42% year-on-year revenue increase, highlighting its strategic position in the AI market.
The company’s price-to-earnings-to-growth (PEG) ratio of 0.92 suggests it may be undervalued relative to its growth potential. This is an attractive PEG ratio by historical standards, but it’s incredibly cheap compared to the broader market now. This is particularly true among companies with exposure to AI.
However, investors should consider risk factors including concentration of customers. Only 10 clients account for two-thirds of sales. Also, geopolitical tensions could affect semiconductor supply chains, and Celestica needs chips to make its products.
Despite these challenges, Celestica’s strong financial performance and strategic positioning in the AI sector make it an attractive investment option for growth-oriented investors. I’ve recently topped up on this stock, and it’s now the largest holding in my portfolio. My first investment in the stock is up 280%.
The post Here are the 10 highest-FTSE growth stocks appeared first on The Motley Fool UK.
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James Fox has positions in Celestica Inc annd International Consolidated Airlines Group. The Motley Fool UK has recommended Greencore Group Plc and Schroders Plc. 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.
