Five listed British stocks, chosen by Fool.co.uk contributors for their growth potential, across a variety of industries. Without further ado, let’s get to them!
The Currys
What it does: Currys is a retailer of various electronic goods, from TVs and appliances to computers and games consoles.
Written by Mark David Hartley. I just bought The Currys (LSE: CURY) shares after seeing a change in consumer behaviour, particularly in electronics. Affordable e-commerce stores remain a major threat to their profitability as they struggle to compete in this market. But consumers are increasingly looking for in-store advice as reliance on online reviews declines. That puts Currys in a good position, especially after cornering the UK market for next-generation AI laptops.
Yes, the price is still down 82% from 2016 but I think it’s a stronger company than most people give it credit for. It benefits from a well-established brand presence, a large network of physical stores, and a growing online presence. Although it has had its ups and downs, its performance has been positive and continues to show the ability to adapt to changing market conditions. Additionally, its strong focus on customer service and after-sales support helps strengthen customer loyalty.
Mark David Hartley is a shareholder in Currys.
DP Poland
What it does: DP Poland has exclusive rights to use and sub-license the Domino’s Pizza brand in Poland and Croatia.
Written by Ben McPoland. At a share price of 11p and a market value of £100m, I think DP Poland (LSE:DPP) has an outside chance of going much higher. I say “outside opportunity” because the company has a history of losses and frequent stock reductions to fund its operations. To be able to deliver shareholder value – next to pizzas – this will need to change. And that is not guaranteed.
However, the company is currently growing significantly, with group revenue jumping 26% to £26.4m in the first half of 2024. It is gaining market share in Poland, and City analysts see revenue growing to around £65.8m by 2025, which could more than double from 2021 (£30m).
Meanwhile, net losses were less than £0.5m in the first half, so profits are imminent. I expect profits to improve as DP Poland moves to a light franchise model. This will “accelerate growth and increase profitability”, according to the company.
Looking ahead, the company plans to open hundreds of stores in Poland and Croatia (it had 111 at the end of June). I think the stock can do very well.
Ben McPoland is a shareholder in DP Poland.
hVIVO
What it does: hVIVO is a small company in the healthcare sector that provides clinical and laboratory testing services.
Written by Edward Sheldon, CFA. One stock under £1 that I believe could go up in the coming years hVIVO (LSE: HVO). It currently trades at around 26p.
There are several reasons I believe this stock has growth potential. One is that the company has recently opened a new state-of-the-art facility in Canary Wharf, London. This should enable it to grow rapidly in the coming years.
Another is that the rating is low. Currently, hVIVO’s P/E ratio using next year’s earnings forecast is only 15.5. Given that the company is targeting revenues of £100m by 2028 compared to around £62m this year, I think the stock could easily command a P/E ratio in the low 20s going forward.
It is important to note that hVIVO faces unique risks. For example, clinical trials can sometimes lead to complications or even death.
All things considered, though, I think the stock has potential pockets.
Edward Sheldon has no position in hVIVO.
ITV
What it does: ITV operates a UK TV network, and produces and distributes program content around the world.
Written by Alan Oscroft. According to CEO Carolyn McCall during H1, ITV (LSE: ITV) “has been transformed in the last five years“.
ITV Studios, the review suggests, should generate record profits this year, partly due to improved margins. And that, I think, might take some pressure off the dynamic nature of advertising revenue.
Forecasts suggest that we could be looking at a 63% increase in earnings per share (EPS) between 2023 and 2026.
It could push the 2026 price-to-earnings (P/E) ratio down to as low as nine in 2026. And that’s a stock with a forecast dividend yield of 6.5% for this year, and rising.
The main risks I see are that the content delivery business is very competitive, and the advertising industry is notoriously fickle.
ITV also has a lot of debt, which could put pressure on profits. However, analysts see it declining in the next few years.
Alan Oscroft has no position at ITV.
Seeing Machines
What it does: Vision Systems provides monitoring and intervention technology for users of the automotive, mining, transportation and aerospace industries.
Written by Paul Summers. I hold a small place Seeing Machines (LSE: LOOK) for a long time. Despite the share price going up from time to time, my patience is yet to be rewarded.
However, I always believe in the story. The company is a leader in high-tech tracking software that monitors driver fatigue levels. A noble goal is to reduce accidents on the roads and elsewhere. And legislation requiring car manufacturers to fit this type of (advanced) technology in new cars is gradually being introduced.
To be clear, this is risky and the company has managed to spend a lot of money over the years. That is why I have invested money that I cannot afford to lose.
But if Seeing Machines can succeed over the next few years, I would do very well on this blue-chip growth stock.
Paul Summers is a shareholder of Seeing Machines
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