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Two growth stocks that could soar once volatility subsides are right movement (LSE: RMV) and Group 4Printing (LSE: FOUR).
Here's why you'd be willing to buy some shares as soon as you have cash on hand!
right movement
Rightmove is the UK's largest online property portal, with an enviable market share. It is like car dealer for properties! It makes money from the fees it collects from real estate agents who list properties for sale and rent.
The shares are down 7% in a 12-month period from 591p this time last year to current levels of 546p.
The recent turbulence has seriously damaged the real estate market. Rising interest rates and inflation have made it difficult for people to buy and sell property. In fact, homebuilders have also been hit by fewer completions and sales, as well as reduced margins.
However, recent murmurs that interest rates have peaked and could be falling could be good news for Rightmove and the sector as a whole. Once activity recovers, the company should benefit.
The obvious risk is continued volatility. As demonstrated by recent unexpectedly rising inflation numbers, we are not out of the woods yet. However, I think some short-term issues will be offset by some potentially lucrative times ahead for both the company and shareholders.
Rightmove shares offer a dividend yield of 1.5%, which could grow in line with the business. However, it should be noted that dividends are never guaranteed.
Overall, Rightmove's management team appears confident in its long-term aspirations and the direction of the business. They recently announced a share buyback plan. I think this is a sign of confidence that its operations are strong and that the company should continue its upward trajectory once the turbulence cools.
Group 4Printing
Direct marketing company 4Imprint has already come a long way in recent years. The shares are up 23% in a 12-month period, from 4,364p this time last year to current levels of 5,390p.
A recent pre-lockdown update returned an excellent reading, with profit levels expected to increase by 35% compared to the previous year. Full results will be delivered next month and I will be looking forward to seeing them.
Whenever I review 4Imprint stock, I often wonder if the gravy train is over and it may have peaked, but it continues to defy my personal expectations. The business continues to generate high levels of performance and growth.
I have two concerns right now. First is 4Imprint's valuation on a P/E ratio of 19. Is growth already built into the price? Could any negative news or trading bring the stock down? The other side of the coin is that sometimes you have to pay a fair price for a good company.
My other concern is the fact that rising costs and volatility could impact margin levels, which underpin profitability and growth. Continued turbulence could affect performance.
On a bullish note, the stock offers a well-covered dividend yield of over 6%. This is higher than the FTSE 100 average of 3.8%.
To me, the pros outweigh the cons and 4Imprint's investment case seems pretty strong to me at the moment.
