Can these FTSE 100 growth stocks keep rising? Here’s what I think

first_img Enter Your Email Address See all posts by Manika Premsingh Manika Premsingh owns shares of Rightmove. The Motley Fool UK has recommended Rightmove. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. FREE REPORT: Why this £5 stock could be set to surge Can these FTSE 100 growth stocks keep rising? Here’s what I think Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free.center_img Simply click below to discover how you can take advantage of this. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Property stocks are among the biggest FTSE 100 gainers today. Taylor Wimpey, Barratt Developments, and Persimmon are all up around 3%. After some softening in their share prices over the past few weeks, I reckon this is a good opportunity for investors to buy as the property markets continue to look positive. Robust housing demandAccording to property e-marketplace Rightmove, the housing market continued to strengthen in May. The average price of property coming to market jumped by 1.8% to a record £333,564 compared to the month before. This is the most up-to-date house price index available right now. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…This house price increase is also reflected in FTSE 100 property companies demand, as per their recent updates. Barratt Developments recently reported robust forward sales numbers, which refer to sales of homes that are still under completion. In fact, it is fully forward sold for the current financial year. Similarly, Persimmon reported forward sales for the January-April months as 23% above the same time last year and even 11% higher than those in 2019. Taylor Wimpey too has seen resilient customer demand. My concerns for the property marketMy concern, however, is that the housing market has been supported by a unique conditions. These include significant government support, low interest rates, and possibly even higher savings among UK’s households. These are about to change. Government support, like the stamp duty relaxation, will be withdrawn later in 2021. With inflation on the increase, I think it is only a matter of time before banks start raising interest rates. This means that housing loans will become more expensive. Also, as we come out of lockdowns, I reckon household savings can come off. They rose to record levels last year as a proportion of income as lockdowns limited possible spending. High savings are instrumental in buying assets like houses or stocks. But with pent up demand for leisure activities from cinemas to holidays, consumers are expected to start spending more. In other words, there could be a reallocation of funds towards higher spending.What is next for these FTSE 100 growth stocks?This means that the housing market could soften in the near future. This in turn would have a bearing on FTSE 100 property stocks, raising the question – can their prices continue to rise?I think they can. There is no doubt that their share prices have risen over the past year. Barratt Developments, for instance, has seen an almost 50% increase. Persimmon has seen a 35% increase and Taylor Wimpey is up almost 14%. But in relative terms, they are still inexpensive, with price-to-earnings (P/E) ratios ranging between 15 and 28 times. Considering that their results will only improve going forward as well as some continued bullishness in investor sentiment, I think they are growth stocks with potential.Further, economic recovery is expected to be sharp. This should soften some of the blow from the withdrawal of the stamp duty waiver and rising interest rates. I would keep an eye out for house price developments to assess the situation over time, because they reflect underlying demand. When I next buy cyclical stocks, though, I will have them on my wish list.  Image source: Getty Images. Our 6 ‘Best Buys Now’ Shares Manika Premsingh | Friday, 28th May, 2021 last_img


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