With stock markets tumbling around the world, now is the time to bag a bargain. In particular, there are a wide range ofgrowthcompanieswhich are as cheap as chips. So here are my three small-cappicks.
Globo
Globo (LSE: GBO) is a technology company thatprovides mobile apps and services to business. This is a fast-growing area, and the company has seen animpressiveincrease in its earnings, as the eps progression below shows:
2011: 3.26p, 2012: 4.22p, 2013: 6.2p, 2014: 8p, 2015: 10p
When a company grows as quickly as this, there can be a lot of volatility, but choose your momentwell and you can bag a growth company at a value price.
I think this is one such moment: the 2014 P/E ratio is 5.6, falling to 4.5 in 2015. Considering how quickly this companys profits are growing, that is astonishingly cheap.
Plus500
Plus500 (LSE: PLUS) provides an online platform thatallows customers to trade shares, commodities and currencies, with a particular emphasis on CFDs and derivatives. This business is also experiencing amazing growth, as the earnings per share numbers show:
2011: 9.65p, 2012: 10.46p, 2013: 28.50p, 2014: 56.33p, 2015: 62.52p
So this company is growing even more quickly than Globo, yet its current rating is surprisingly cheap. The 2014 P/E ratio is 9.3, falling to 8.4 in 2015. Whats more, theres an added advantage:this is also an income share, with a dividend yield of 6.4%, rising to 7.0%. So this company is rapidly growing, with a high and rising dividend yield, yet itis priced likea value investment.
Quindell
I have written about Quindell (LSE: QPP)many times. But I am still convinced that this is one of the buys of the moment.
Stung by criticismfrom the nowinfamous report by Gotham, this insurance outsourcing company has adjusted its focus, trimming its ambitious growth targets and increasing its cashflow. I think this is a sensible move, and does not affect my view that this company is too cheap.
Despite the ups and downs of the share price, Quindell is pressing ahead with its expansion. Last weeks announcement of a contract with a leading insurer in Canada is one of many contract announcements it has made this year.
Of the three companies in this article, Quindell is the fastest growing just look at its earnings per share progression:
2011: 5.14p, 2012: 14.97p, 2013: 29.28p, 2014: 53.89p, 2015: 80.41p
Yet it is also the cheapest:the 2014 P/E ratio is 2.7, falling to 1.8 in 2015. Personally, I think all three of these companies are well worth buying into.
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Prabhat Sakyaowns shares in Globo, Plus500 and Quindell. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
