Times of woe can be great for those prepared to take a bit of a risk when looking for growth bargains, and Ive been trawling the FTSE indices to see what potential I can find. Here are three that Im getting good feelings about:
Small oily
Invest in a small oil explorer now? Am I mad? Maybe, but Ive been looking to see whats wrong with Indus Gas (LSE: INDI) and why its shares are valued so lowly, and I cant see it. Were not looking at a loss-maker here, no: Indus has been in profit for several years and theres a near doubling of EPS expected for the year just ended, which would put the 108p shares on a P/E of just 10.
That expectation is based on the firms Indian resources, with last Decembers Competent Persons Report suggesting the presence of 872 billion cubic feet equivalent of natural gas! Thats a lot of gas, but even that hasnt pleased the punters over the past 12 months as the shares have lost 70% of their value.
Indus isnt one to bet the farm on, but I reckon a small punt could easily turn into a multibagger.
Telecoms wealth
I have to confess to taking my eye off the ball with AdEPT Telecom (LSE: ADT), which I really liked the look of a few years ago. I let it slip off my screen and the share price has rocketed by nearly 1,300% in the past five years! That included a 126% rise in the past 12 months alone, and yet at 265p the shares are still on a P/E of a modest 15 with further growth predicted.
Its growth with a good track record too. The year to March 2015 brought in the firms twelfth consecutive year of increased underlying EBITDA, with a rise of 13.5% and its that kind of steady growth that builds into the big money.
Dividends only commenced in 2013 with 1.5p paid, but by this year shareholders saw 4.75p, and 6.7p per share by 2017 is currently forecast. The early massive share price appreciation is surely over, but AdEPT looks like its set for long-term profits.
Picks and shovels
My third choice is Gulf Marine Services (LSE: GMS), which provides various sized floating barge things to the oil industry in the Gulf. Not too exciting, you might think, but Im seeing a picks and shovels business that has serious potential over the long term, especially when oil starts to recover.
Right now, Gulf Marine is on a valuation thats so low it looks silly to me, with forward P/E multiples of just 6.8 for the year to December 2015, dropping to only 5.5 based on 2016 forecasts. And its currently profitable, with H1 revenue this year up 8% on 2014, although adjusted EPS did fall a little in line with a forecast full-year drop. But forecasters expect a return to growth in 2016, and theres a unanimous Strong Buy rating on the shares from the analysts.
If these three growth ideas aren’t enough for you, try a copy of our hot new report which identifies 1 Top Small-Cap Stock From The Motley Fool.
It’s a smaller company that has already rewarded its shareholders with a stonking performance, yet the Motley Fool’s top analysts reckon there could be a further 45% upside to come.
Want to know the name of this potential small-cap winner? Just click here to get your completely free report today.
Alan Oscroft has no position in any shares mentioned. 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.