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I've been spending money on UK growth stocks which I hope will gain popularity again when the recovery finally begins. Some have had a rocky start, but I'm measuring their success in years, rather than weeks.
Sod's law seems to dictate that whenever I buy a stock, the first thing it does is fall. That's what happened to the home improvement specialist. Wickes (LSE:WIX).
I added the £411m pool to my portfolio on September 13, three days after it posted a drop in interim profits. Shares held up that day as the board predicted a better second half. As expected, they dropped 6% or 7% after I bought them. That's how it is.
I will also receive dividend income.
I bought Wickes shares because I felt they would benefit from Labour's plans to increase house building, along with a broader consumer recovery as the cost of living crisis faded and the Bank of England cut interest rates .
Personally, I think Labor will miss its ambitious housebuilding targets, but I still think the economy will recover.
Landlords are still reluctant to give the green light to big projects such as new kitchens, which has hit Wickes' Design and Installation division. But with the stock trading at 11.44 times earnings and yielding 6.29%, I think it will be a great source of long-term growth and income.
I love buying high-growth stocks once the heat has worn off, and that's why I splurged JD Sports Fashion (LSE: JD) in January. This was fifteen days after the FTSE 100The listed trainer and trackie specialist had issued a profit warning following disappointing Christmas sales.
Inevitably, the stock fell another 10% or so after I bought it – Sod's law strikes again! – but now they are flying. I'm already up 35%. In one year, the stock is up 5.87%.
What we need now is a recovery in consumption, both in Europe and in the United States. That's not guaranteed, of course. I have noticed that the giant coach Nike is going through a tough time and as a key JD Sports Fashion brand, that could have a knock-on effect.
Another action for the long term
However, trading at 12.69 times earnings, JD Sports Fashion's share price still looks good. With a yield of only 0.69%, I don't expect any income to come.
FTSE 100 listed packaging giant Smurfit WestRock (LSE: SWR) looked solid when I bought it in June last year. And once again its shares also plummeted within days, after it revealed a controversial partnership with US peer WestRock and a dual listing in New York and London. The markets felt that Smurfit had overpaid to get the deal done, and again I was facing a double-digit loss. So it is once again.
I responded by averaging down and I'm glad I did. While the Smurfit WestRock share price is up just 3.97% in 12 months, I'm up 24.4%.
I think there is still value here with shares trading at 12.67%, plus there is a solid trailing yield of 3.54%.
Once again, Smurfit WestRock needs a consumer recovery to ignite, while there is always the risk that the merger fails or we see a backlash against e-commerce packaging. But I think it will prove its worth over time.