I’m searching for the best UK growth stocks to buy for my ISA in June. Here are two on my radar right now.
FRP Advisory Group
What it does: Provides a range of financial services to business including debt advice.
Price: 160p per share
Buying UK shares that thrive during tough times is a good idea. It’s why I’m considering adding FRP Advisory Group (LSE: FRP) to my portfolio right now.
The distress signals coming from British business are unfortunately becoming much louder. Latest Office for National Statistics data for example showed that 40.2% of small-to-medium-sized businesses have cash reserves that will last three months, or less.
With inflation tipped to keep rising and consumer confidence sinking, the pressure on UK business is set to grow. Companies that provide debt advisory services like FRP could become very busy in the months ahead, and possibly beyond.
This explains why City analysts think earnings at the company will rise 20% in this fiscal year (to April 2023). They also believe the bottom line will improve by an extra 17% year-on-year in financial 2024 too.
Fresh government support for struggling businesses could hit new activity levels and put these forecasts in jeopardy. Still, as things stand today, I think buying this growth share could be a great way for me to diversify my portfolio and protect my wealth.
Springfield Properties
What it does: Builds residential properties in Scotland.
Price: 131p per share
Concerns over what soaring inflation means for housebuilders like Springfield Properties (LSE: SPR) continue to mount. Fears over weakening buyer confidence and the impact of rising interest rates to cool price rises have the potential to derail the domestic housing market.
Data this week from Zoopla hasn’t calmed these worries either. Average annual home price growth slowed to 8.4% in April, down from 9% in March. Zoopla thinks annual growth could slow to 3% by the end of the year too.
The risks to builders like Springfield Properties are growing. But then I think the dangers caused by rocketing inflation are reflected by recent share price falls and some seriously-low valuations.
Springfield, for instance, now trades on a price-to-earnings (P/E) ratio of 6.8 times for the new financial year. This is created by City predictions that earnings will rise 19% in the period (to May 2023), speeding up from a projected 13% for last year.
I also like Springfield Properties’ dividend yield which has rocketed after recent share price falls. This now sits at 5.4% for financial 2023.
Over the long term, I believe housebuilders like Springfield will remain highly profitable UK shares to own. I expect interest rates to remain well below historical levels, keeping demand healthy. Meanwhile, weak build rates mean that property prices should keep growing strongly too.
I think growth stock Springfield Properties is a brilliant bargain for me to buy on the dip in June.