Capital growth remains my key goal with any investment, and it is from this perspective that I’m focusing on the prospects for Boohoo.Com PLC (LON:BOO) (BOO.L), easyJet plc (LON:EZJ) (EZJ.L), IQE plc (LON:IQE) (IQE.L) and Fevertree Drinks PLC (LON:FEVR) (FEVR.L).
The growth prospects for Boohoo.Com appear to be relatively impressive. Yesterday’s update by the company showed that it continues to build capacity so that it has the potential to expand sales to £3 billion annually.
With the Boohoo share price continuing to underperform, investor sentiment appears to be weak. However, with a strong business model which has a history of growth, it could deliver improved share price performance in the long run.
easyJet’s outlook may be relatively uncertain at the moment due in part to the rising fuel costs that are affecting the airline industry. This may squeeze margins to some degree, and cause prices to firm-up across the industry.
However, with the company being a dominant player in the sector, it may benefit to some degree from rivals being required to raise unsustainable fares. This could lead to stronger margins, higher earnings growth and an improving easyJet share price.
IQE’s growth potential remains high in my view, with the company expected to report a 40% rise in EPS in the next financial year. This could act as a catalyst on its valuation and lead to further growth after what has been a stunning performance in recent years.
With the IQE share price continuing to trade on a PEG ratio of less than 1, the investment potential of the company still seems to be high. As a result of this and what seems to be an evolving strategy, I remain upbeat about its investment potential.
Fevertree’s growth prospects continue to be high in my opinion. The premiumisation of the beverages sector looks to set to remain in play, and this could lead to a further tailwind for the business.
While Fevertree may have a relatively high valuation, I feel that the company could generate further EPS growth over the medium term. This may lead to a performance which merits its current valuation over the coming years.