Today I am outlining why CRH (LSE: CRH) could be considered a terrific stock for growth hunters.
Acquisition trail to ignite earnings
Building materials and products play CRH is one of the best-placed stocks to piggyback surging construction activity across the globe. A backcloth of accelerating building starts in the US and Europe helped push sales 4% higher during January-June to 8.3bn, a result which 
propelled group earnings 27% higher to 505m.
And CRH is currently engaged in a huge portfolio-reshaping programme to make the most of these favourable conditions and turbocharge future growth. Indeed, the firm is planning to shed between 1.5bn and 2bn worth of non-core assets in coming years with a view to investing in key growth areas.
The company spent 130m in the first half alone on 11 bolt-on acquisitions across the US and Europe, including bolstering its builders network on the continent and expanding its presence in the garden product sub-sector in the States. And CRHs already-sturdy balance sheet should keep the acquisition story rolling.
Stunning growth potential at excellent prices
The impact of the financial crisis of five years on the construction industry has caused CRHs earnings to fluctuate wildly since then, and the company has seen earnings slip three times since 2008, climaxing in last years colossal 40% drop.
But City consensus suggests that CRH has put the worst of these troubles behind it and is in line for a period of stunning earnings expansion. Indeed, the business is anticipated to punch a solid 39% improvement for 2014, to 82.5 euro cents per share, and a further 37% rise to 113 cents is chalked in for next year.
Although these figures are undoubtedly impressive, at first glance CRH does not appear to provide decent value for money. The materials specialist currently changes hands on a P/E rating of 22.4 times predicted earnings for this year, sailing above the yardstick of 15 or under which signals decent value for money.
However, next years further advance drives this down to a vastly-improved reading of 16.4, and analysts expectations of strong growth further out, in light of galloping building activity across the world should drive this still lower in coming years.
And I believe that investors should pay particular attention to the firms price to earnings to growth (PEG) through to next year, figures which really illustrate CRHs cheapness relative to its medium-term earnings prospects. These come in at 0.6 and 0.4 for 2014 and 2015 correspondingly, comfortably below the bargain benchmark of 1.
Ready to retire on a fortune?
But whether or not you believe CRH is a terrifically-valued growth prospect, I strongly urge you to check out THIS BRAND NEW AND EXCLUSIVE REPORT which reveals the seven key steps you need to take to become a stock market millionaire.
Our “How You Could Retire Seriously Rich” wealth report tells you how you can propel returns from your investment portfolio through the roof with some sage advice from the Fool’s crack team of analysts. Click here to download the report — it’s completely free and comes with no further obligation.
Royston Wild 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.
