Growth stocks grabbing investors’ attention (PGW, SCT, RAK: 3 NZX)

 Highlights:

• Growth stocks are equipped with high-growth potential
• Rakon posts a record earnings performance for FY22
• PGG Wrightson lifts its operating EBITDA guidance for FY22

Growth stocks are those companies that have high-growth potential and are expected to grow their earnings at a relatively faster pace than their peers. These companies often have a high price-to-earnings ratio and continue to grow rapidly, thereby witnessing an increase in their share prices.

Further, Best Growth Stocks in NZ are characterised by having more efficient technology than the existing one, thus giving a company an edge over others.

With this overview, let us skim through the three NZX-listed growth stocks- Rakon Limited (NZX:RAK), PGG Wrightson Limited (NZX:PGW) and Michael Hill International Limited (NZX:MHJ).

Rakon Limited (NZX:RAK)

Rakon Limited is one of the leading manufacturers of timing solutions and frequency control products across the world, having a market cap of about NZ$344 million. It has a one-year return of 63.04%.

Last month, the Company released its FY22 results, reporting a record earnings performance, with underlying EBITDA rising 132% and NPAT climbing 244% on FY21, majorly on account of continued demand growth in 5G networks and industrial positioning applications along with new opportunities stemming from chip shortages across the world.

RAK maintains a strong balance sheet position and boasts a strong forward order book which will accelerate its growth in its core markets.

At the time of writing on 8 June, RAK was down 2.00% at NZ$1.470.

PGG Wrightson Limited (NZX:PGW)

Functioning as an agricultural supply business, PGG Wrightson Limited has a market cap of nearly NZ$342 million and 35.22% as its one-year return.

In its H1FY22 results, the Company posted revenue of NZ$552.4 million, up 11% on pcp, and on NPAT, up 32%, amounting to NZ$22.5 million, majorly attributed to the diversified nature of its businesses and strong performance of all its business units.

Further, based on its strong Q3 performance, PGW has raised its operating EBITDA guidance for FY22 from NZ$62 million to nearly NZ$66 million, and the demand for its horticulture exports remains buoyant.

At the time of writing on 8 June, PGW was trading flat at NZ$4.530.

Michael Hill International Limited (NZX:MHJ; ASX:MHJ)

NZ’s renowned fine jewellery retailer is Michael Hill International Limited, having a market cap of about NZ$447 million and 25.84% as its one-year return.

The Company revealed to sell its Canadian credit receivables to Flexiti, a consumer credit provider based in Canada, to enhance its customer base as well as to strengthen its balance sheet.

MHJ has recorded an 11.1% and 4.8% increase in its all-store sales and same-store sales, respectively, in FY22Q3 as compared to the prior year. Also, its digital sales grew almost 32% on a year-to-date basis, reflecting continued store growth and the progression of its international digital expansion strategy.

Michael Hill International continues to pivot from transformation to growth despite facing pandemic uncertainties, lower foot traffic, and challenges with staff rostering.

At the time of writing on 8 June, MHJ was gaining 2.68% at NZ$1.150.

Bottom Line

Investing in growth stocks often gives a substantial boost to the capital invested over time. However, investors must conduct thorough analysis and research before investing in the stock market.