2 growth stocks I’d buy and hold for the next 50 years

Searching for great growth stocks to buy now and forget about? You could do a lot worse than taking a look at these two health plays.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

The Gym Group (LSE: GYM) is a stock that has what it takes to deliver titanic profits growth long into the future.

The modern obsession with always being ‘beach body ready’ and living a healthy lifestyle is here to stay, and going to gym for an increasing number of people is as natural as going to work or cleaning your teeth.

This was reflected in The Gym Group’s latest set of brilliant financials in which it advised that revenues jumped by almost a quarter year-on-year during 2017, to £91.4m, while the number of members on its books grew 35.5% during the period to 607,000.

Should you invest £1,000 in Convatec Group Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Convatec Group Plc made the list?

See the 6 stocks

These brilliant numbers were helped by strong underlying demand as well as the fruits of the company’s fizzy expansion drive, the firm turbocharging the number of sites it operates to make the most of the strong environment for such businesses. It opened 21 sites in 2017 and acquired a further 18 from Lifestyle Fitness, and it plans to cut the ribbon on an additional 15 to 20 gyms in the current year alone.

As I said, it is difficult to see fitness-crazed Britain rowing back and gym demand slumping in the years to come. But The Gym Group has an added layer of protection as, unlike its more expensive competitors, the company’s low-cost and no-contract membership model should ensure reliable footfall even in the event of economic conditions toughening further down the line.

City analysts are predicting blistering earnings growth of 25% and 29% in 2018 and 2019 respectively, projections that produce a PEG reading bang on the bargain benchmark of 1. This suggests the business is exceptionally priced relative to its anticipated growth trajectory, and I reckon it should provide plenty of upside for long-term investors.

Medical marvel

I also reckon ConvaTec Group (LSE: CTEC) should churn out exceptional earnings expansion in the years ahead.

Like The Gym Group, the FTSE 250 firm — which provides a range of medical products from wound bandages to stoma bags — is no stranger to doling out double-digit profits growth in recent times, and it is expected to keep going with rises of 9% in 2018 and 7% next year.

It may deal on a slightly-toppy forward P/E ratio of 17.2 times, but I believe the promise of reliable earnings expansion long into the future makes ConvaTec a worthy stock for a slight premium. Indeed, the firm can look to favourable demographic trends like ageing populations, lifestyle choices and increased access to healthcare to keep its products well bought in the future years. Indeed, UBS puts organic sales growth for its underlying markets at between 4% and 6%.

The company has encountered severe manufacturing issues that has seen it fail to keep up with orders. However, this is unlikely to have a significant long-term impact on demand for its products, and measures like boosting its salesforce in the US and Europe, allied with an improvement in its market strategy, should lay the groundwork for strong revenues growth in the medium-to-long term.

But what does the head of The Motley Fool’s investing team think?

Should you invest £1,000 in Convatec Group Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Convatec Group Plc made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the 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.

More on Investing Articles

Mature black woman at home texting on her cell phone while sitting on the couch
Investing Articles

Prediction: in 12 months the recovering Vodafone share price could turn £10,000 into…

Harvey Jones has been watching the Vodafone share price slide for so long that he can't come to terms with…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

Down 35% with a 5% yield! Is this the cheapest dividend stock on the FTSE 250?

Mark Hartley considers the income potential of a FTSE 250 dividend stock that looks to be trading well below its…

Read more »

Black woman using smartphone at home, watching stock charts.
Investing Articles

£10,000 invested in Lloyds shares 6 months ago is now worth…

Lloyds shares appear to be plateauing after surging beyond market expectations over the past year. Dr James Fox takes a…

Read more »

Portrait of pensive bearded senior looking on screen of laptop sitting at table with coffee cup.
Investing Articles

This old-school tech stock is beating all Magnificent 7 shares in 2025, including Nvidia

Shares in this old technology company are soaring in 2025, outperforming Nvidia stock and many other popular tech investments.

Read more »

This way, That way, The other way - pointing in different directions
Investing Articles

Prediction: in 12 months the under-achieving Legal & General Group share price could turn £10k into…

Harvey Jones expected better from the Legal & General share price, but he has no complaints about the FTSE 100…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

See the latest BP share price and dividend forecasts

Harvey Jones examines the outlook for the BP share price after what's been a tough year. The yield's climbed nicely…

Read more »

A GlaxoSmithKline scientist uses a microscope
Investing Articles

What are the most common FTSE 100 shares top UK investors put into a Stocks and Shares ISA?

Mark Hartley reveals the three most popular FTSE 100 shares found in Stocks and Shares ISAs — and why so…

Read more »

Mature black woman at home texting on her cell phone while sitting on the couch
Investing Articles

£10,000 invested in Greggs shares would deliver this much passive income…

Dr James Fox takes a closer look at Greggs' shares. He hasn't been a fan of the sausage roll maker…

Read more »