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Conditions in the UK stock market look promising to me. And I think we’re in one of the best investment environments in years. So now is a good time to look for UK stocks that can double my money in a reasonable amount of time.
Last year’s bear market for stocks pushed down the price of many stocks. And general economic and geopolitical conditions caused many businesses to experience operational difficulties. But some companies have been healing. And several companies have released upbeat business updates and positive outlook statements recently.
Prospects have been improving
The market has been catching up on the news. And in recent weeks we’ve seen many stocks rise when companies beat investors’ prior expectations.
Therefore, there is plenty of scope for various stocks to return to their former glories. And there’s also great potential for companies with previously-suppressed operations to generate earnings growth in the future. So I expect some UK stocks to deliver close to 100% returns for shareholders through 2023 and beyond. All I need to do is find them.
And on that front, one company that I’ve been looking at is victorian plumbing (LSE:VIC). The directors describe the company as “The UK’s leading online specialist bathroom retailer.” And that’s a good start, for me, because I’ve always found the plumbing supply industry to be resilient.
The company went public in June 2021 and the share price at the time was around 330 pence. However, today it is close to 90p. And 2022 was a bad year for business profits.
Recovery and growth on the move
However, analysts in the city have pointed to a strong recovery with double-digit profit increases for this year and next. And Victorian published an upbeat annual report in December. The results for the year until September 30, 2022 arrived “ahead of expectations”. And the directors said that the income in the second half of the year grew, thus demonstrating “continued business momentum and further market share gains.”
In addition, the directors believe that the macroeconomic and operating environment is an opportunity to further strengthen Victorian’s market position. And if the business can expand as expected, I think there’s a chance that the strong double-digit earnings gains will continue.
Nothing is certain, but rising earnings could push the share price up, perhaps even double it.
Meanwhile, the balance sheet looks strong and there is a solid net cash position in the bank. The directors underscored their confidence in the business and forward-looking outlook by announcing an ordinary dividend to inaugural shareholders of 1.1 pence per share. But they did not stop there. They also announced an additional special dividend of 1.7 pence per share.
It seems to me that the business is running full steam ahead. However, over the last year, the share price has fallen by around 20%. Meanwhile, the valuation looks fair with a prospective earnings multiple close to 16 by 2024.
My optimism may be misplaced. And Victorian’s growth trajectory could stall in the coming months. But if I had some extra money to invest now, I’d dive deep into researching this opportunity. And I would like to buy some of the shares to hold for the long term if I am satisfied with the result of my further investigations.
