In this piece, we will take a look at 11 high growth U.K. stocks to buy. For more stocks, head on over to 5 High Growth U.K. Stocks to Buy.
The United Kingdom, like the rest of the world, is facing the negative effects of the Russian invasion of Ukraine and rising inflation. The invasion disrupted global energy supply chains, and the U.K., which had come to rely on imported gas, saw prices rise as the European Union shifted away from Russian gas and started to look at other sources. This increased demand was naturally followed by a price increase to balance the market. The end result led to gas prices in the U.K., and the country's price shot up especially since it also has some of the lowest European gas storage reserves. High prices set through the U.K. National Balancing Point (NBP) to attract pricier liquefied natural gas (LNG) imports from abroad to compete with European and Asian countries also ended up increasing electricity bills, since natural gas is also the second biggest contributor to power production in the U.K. after oil.
Combined with the fact that the U.K. is a net importer and has a current account deficit that must be financed through loans, the release valve for all this pressure was the British Pound. While it was trading at close to $1.36 at the start of 2022, the currency had dropped to $1.19 by July 2022 as the dollar strengthened and would go on and sink to its all time low of $1.03 in September as the government, in an attempt to boost growth, released a generous fiscal package reducing taxes. While low taxes are good for business, they are not good for the economy if you are financing your current account deficit through foreign borrowing.
The global bond market brought down the government of former British Prime Minister Mary Elizabeth Truss as the yield for a 10-year British government bond (called a gilt) soared to 4.28% - its highest level since 2008 - on the same day that the pound plummeted. A yield on a bond is its coupon payment (the amount investors get as interest for buying the bond), and a higher yield implies a bond price drop since the price drops in proportion to the coupon. In fact, the yield dropped more in a single day than it had in 30 years, implied a stunning crisis of confidence in the government's ability to finance its massive $225 billion package.
Britain's flagship stock exchange, the Financial Times Stock Exchange 100 Index (FTSE 100), which had sunk by 30% in the wake of the coronavirus pandemic but had pared back all these losses by February 2022, went on to lose 10% again by October which was the peak period for the high energy prices. All in all, there was anarchy in the U.K. to say the least, and Britons were left feeling quite insecure about their economic prospects.
Fast forward to 2023 and things appear to be improving. The pound has recovered to $1.21 and it appears that wholesale gas prices are also falling. The British energy regulator Ofgem responded to the 2022 crisis and changed its price cap review time period to three months, indicating that today's prices can be reflected in consumers' bills soon. However, at the same time, experts warn that the reduction of Russian supply to Europe in late 2022 can also lead to bills becoming higher. The FTSE-100 is also on an upward trend and has in fact beaten the New York Stock Exchange (NYSE) in year to date returns. While as of February 21, 2023, the NYSE has delivered 3.12% year to date, the FTSE-100 has appreciated by 5.61%, to lift some economic sentiment for the British. In fact, the S&P 500 purchasing manager index (PMI) data released on February 21 showed that British firms grew for the first time since at least September, a nice surprise followed by a £22 billion surprise budget surplus in January.
Therefore, now looks to be the right time to see which U.K. companies are the most profitable, with some top picks being Autolus Therapeutics plc (NASDAQ:AUTL), Vaccitech plc (NASDAQ:VACC), and Akanda Corp. (NASDAQ:AKAN).
We used a stock screener to pick out British firms with quarterly sales growth higher than 30%. Then, the growth for the companies was verified manually, and the top 11 are listed.
High Growth UK Stocks to Buy
11. Myovant Sciences Ltd. (NYSE:MYOV)
Q/Q Sales Growth: 84%
Number of Hedge Fund Holders in Q4 2022: 21
Myovant Sciences Ltd. (NYSE:MYOV) is a biotechnology firm developing treatments for menstrual bleeding, prostate cancer, infertility, and other medical issues. It is based in London.
During its third quarter of fiscal 2022 which ended in December 2022, Myovant Sciences Ltd. (NYSE:MYOV) raked in $100.2 million in revenue, marking an 84% annual growth over the year ago quarter. 21 of the 943 hedge fund portfolios studied by Insider Monkey for the same quarter had bought its shares.
Myovant Sciences Ltd. (NYSE:MYOV)'s largest investor is Clint Carlson's Carlson Capital which owns 1.8 million shares that are worth $48 million.
Along with Vaccitech plc (NASDAQ:VACC), Autolus Therapeutics plc (NASDAQ:AUTL), and Akanda Corp. (NASDAQ:AKAN), Myovant Sciences Ltd. (NYSE:MYOV) is a high growth British firm.
10. Cazoo Group Ltd (NYSE:CZOO)
Q/Q Sales Growth: 103%
Number of Hedge Fund Holders in Q4 2022: 21
Cazoo Group Ltd (NYSE:CZOO) is a car retailer that is headquartered in London. The firm operates an online retail platform that enables customers to buy and sell cars.
Cazoo Group Ltd (NYSE:CZOO) has stopped conducting operations in Europe, and as a result, the firm's earnings report for the third quarter of last year only listed the revenue and income from its British operations as it will indicate revenues from Europe earned before the fourth quarter as those coming from discontinued operations. Cazoo Group Ltd (NYSE:CZOO) reported £347 million in revenue for its September quarter, marking a 103% annual growth. During Q4 2022, 21 of the 943 hedge funds part of Insider Monkey's survey had bought the company's shares.
Cazoo Group Ltd (NYSE:CZOO)'s largest investor is Bruce Emery's Greenvale Capital which owns 50 million shares that are worth $7.9 million.
9. Selina Hospitality PLC (NASDAQ:SLNA)
Year to September 2022 Annual Sales Growth: 116%
Number of Hedge Fund Holders in Q4 2022: 12
Selina Hospitality PLC (NASDAQ:SLNA) is a customized hospitality company that provides younger travels with unique accommodations to suit a Nomadic lifestyle. The firm is based in London.
Since Selina Hospitality PLC (NASDAQ:SLNA) only listed its shares on the stock market in October 2022, the firm's full year financial results are unavailable. However, an investor presentation made in January 2023 shared that for the first nine months of 2022, the firm's revenue grew by 116% and during the fiscal year 2021, it grew revenue by 164%. 12 of the 943 hedge funds part of Insider Monkey's December quarter of 2022 survey had held a stake in the company.
8. TORM plc (NASDAQ:TRMD)
Q/Q Sales Growth: 200%
Number of Hedge Fund Holders in Q4 2022: 11
TORM plc (NASDAQ:TRMD) is a tanker firm that transports oil products such as aviation fuel and gasoline. The firm has dozens of ships in its fleet, and it is based in London.
The oil and gas industry has been booming lately since the market shakeup due to the Western sanctions on Russia which have boosted shipping firms' fortunes as they often have to take longer routes to ship products. As a result, TORM plc (NASDAQ:TRMD)'s third quarter of fiscal 2023 saw the firm report $448 million in revenue which marked a stunning 200% annual growth. Insider Monkey took a look at 943 hedge fund holdings for Q4 2022 to discover that 11 had invested in the shipping company.
As of Q4 2022, Howard Marks' Oaktree Capital Management is TORM plc (NASDAQ:TRMD)'s largest investor. It owns 53 million shares that are worth $1.5 billion.
7. Babylon Holdings Limited (NYSE:BBLN)
Q/Q Sales Growth: 285%
Number of Hedge Fund Holders in Q4 2022: 3
Babylon Holdings Limited (NYSE:BBLN) is a healthcare platform provider that provides services such as medical care and post-care offerings digitally. It is headquartered in London.
Babylon Holdings Limited (NYSE:BBLN)'s third quarter of 2022 results, for the period ending in September 2022, revealed that the firm had raked in $288 million in revenue for a 285% annual growth. In the succeeding quarter, three of the 943 hedge funds polled by Insider Monkey had held a stake in the company.
Babylon Holdings Limited (NYSE:BBLN)'s largest hedge fund investor in our database is Chris Rokos' Rokos Capital Management which owns 106,800 shares that are worth $706,986.
6. Orchard Therapeutics plc (NASDAQ:ORTX)
Q/Q Sales Growth: 375%
Number of Hedge Fund Holders in Q4 2022: 7
Orchard Therapeutics plc (NASDAQ:ORTX) develops genetic therapies for diseases such as immune system disorders, thalassemia, leukodystrophy, and others. It is based in London.
Orchard Therapeutics plc (NASDAQ:ORTX)'s third quarter results saw the firm bring in $5.7 million in revenue, which accounted for a 375% annual growth over the year ago quarter. The firm also announced in January 2023 that it has a busy year ahead of it, as it hopes to conduct trials and outline test reports. Orchard Therapeutics plc (NASDAQ:ORTX) also expects to earn $18.8 million in revenue in 2022 when it files its earnings report, for strong growth over 2021's $1.6 million of net sales. 7 of the 943 hedge funds part of Insider Monkey's fourth quarter of 2022 survey had invested in the firm.
Out of these, James E. Flynn's Deerfield Management is Orchard Therapeutics plc (NASDAQ:ORTX)'s largest investor. It owns 3.1 million shares that are worth $1.1 billion.
Therapeutics plc (NASDAQ:AUTL), Orchard Therapeutics plc (NASDAQ:ORTX), Vaccitech plc (NASDAQ:VACC), and Akanda Corp. (NASDAQ:AKAN) are some high growth U.K. stocks.
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Disclosure: None. 11 High Growth UK Stocks to Buy is originally published on Insider Monkey.