FTSE 100 growth stocks are on my radar to buy right now. A number of such stocks have underperformed the index’s 9% rise so far this year. I think this could be a chance for me to invest in some quality businesses while they’re out of favour.
Here are five blue-chip companies that appeal to me today.
My FTSE 100 growth stocks to buy
Let’s begin by looking at the underperformance of their shares. The table below shows the performances of the FTSE 100 and the five stocks for the year to date and the last 12 months.
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|
|
Year to date (%) |
Last 12 months (%) |
|
FTSE 100 |
+9.0 |
+10.3 |
|
Avast |
-13.8 |
-7.4 |
|
Experian |
-3.5 |
-7.1 |
|
Hikma |
-4.5 |
-0.6 |
|
Intertek |
-5.5 |
-3.8 |
|
Reckitt |
-3.2 |
-10.6 |
As you can see, my FTSE 100 growth stocks to buy have significantly underperformed the index over both periods. This is because investors have flocked to value and recovery plays.
Of course, growth stocks may remain out of favour for a while yet. But I expect the quality of my five picks to shine through in due course. As such, they’re businesses I’d like to buy a slice of for the long term.
Two technology-based companies
Avast is a major player in consumer cybersecurity and privacy. It doesn’t have a long history as a public company (little more than three years) which I see as something of a risk. However, I’ve been impressed by its performance and I like its significant market opportunity. A rating of 18 times forecast earnings looks good value to me for the potential long-term growth on offer.
Experian is the world’s leading credit reference agency. It has valuable data and analytical technology at its heart. There’s a risk the company could suffer reputational damage if its data is breached or misused. But I’m content to accept the risk to own a slice of this high-quality market leader. I’m also content to pay a relatively high 32 times forecast earnings.
The other FTSE 100 growth stocks I’d buy
I reckon healthcare is an attractive sector for me to invest in. Ageing populations and rising health spending in developing economies provide a backdrop for growth. I like Hikma Pharmaceuticals for its significant exposure to generic medicines and emerging markets. There can be difficulties in gaining regulatory approval for generics, but Hikma has a good record. I see value in its rating of 18 times forecast earnings.
Intertek is an industry leader in Total Quality Assurance. That’s to say, it helps ensure the quality and safety of companies’ products, processes and systems. Rising demand for quality assurance worldwide has helped put Intertek on my list of FTSE 100 growth stocks to buy. There’s some risk in the company’s acquisition strategy, but I’m prepared to accept both this and a rating of 28 times forecast earnings.
Finally, I’m a big fan of hygiene and health brands powerhouse Reckitt. Its true that the digital world has lowered the barriers for new brands to enter the market. However, I think Reckitt’s brands, like Dettol and Gaviscon, can continue to be popular and trusted. The company is investing for growth and I’m happy to pay 21 times forecast earnings.
