That said, it doesn’t mean I should go out and buy every beaten-down stock. Plenty of companies are being sold off for good reasons.

But for the high-quality businesses capable of enduring short-term disruptions and thriving for the next decade, I see only opportunity. And there are two stocks already in my portfolio that I’m planning on buying more of in my next round of capital injection.

One of the best?

Volatility in foreign currency exchange rates creates a lot of headaches. But for Alpha FX (LSE:AFX), it breeds opportunity. The financial services group provides currency risk management and alternative banking solutions.

With all the volatility seen in 2022, demand for its services is rising. As a result, the group has increased its FX client base from 881 at the end of 2021 to 975 today. Meanwhile, its alternative banking division is seeing a surge in popularity, with total customers jumping from 1,746 to 3,061 in the last six months.

As such, its latest interim results reported revenue and pre-tax profits growing by 35% and 16% respectively, versus a year ago. Yet despite this impressive performance, the stock is down around 15% in the last 12 months. Why?

Profit margins have taken a hit due to increased internal investments that have yet to deliver value. Meanwhile, the surge in FX volatility, especially concerning the US dollar, does open the door to higher operating risks for this business. If its traders fail to correctly predict trends, it could significantly harm client relationships.

Nevertheless, Alpha FX’s track record of navigating volatility seems solid, in my eyes. And while its P/E ratio of 26 is certainly not cheap, it looks like a fair price to pay given the long-term potential of this rapidly expanding enterprise.

A potential return to glory?

The video game sector experienced some immense growth during the pandemic, as lockdowns provided a nice tailwind for demand. That helped propel the Frontier Developments (LSE:FDEV) share price to impressive heights.

Unfortunately, following the poorly-received Odyssey expansion to its Elite Dangerous franchise and lower-than-anticipated early sales for its Jurassic World Evolution 2 title, its market capitalisation was pounded into oblivion, falling by 50% in the last 12 months.

However, looking at its latest results, things seem to be improving. Sales of Jurassic World have caught up, delivering more than £60m in revenue since launch. Its other IPs continue to retain high popularity following the release of additional paid content. And its highly anticipated Formula 1 title was released to critical acclaim along with strong sales.

So it’s not surprising that overall top-line sales have hit an all-time high of £114m. Impairment charges relating to Odyssey have sent profits down the drain, elevating the investment risk. Even more so now that rising interest rates are making raising external capital more expensive.

Yet this is a one-time charge. And Frontier’s pipeline of upcoming titles looks impressive, in my opinion. That’s why I feel the drop in stock price makes it potentially a bargain right now.

Here, I’m going to highlight some interesting director dealing I’ve spotted recently. Should I follow these insiders into these stocks?

£99k buy from the CFO

Let’s start with asset manager abrdn (LSE: ABDN). Here, CFO Stephanie Bruce bought 66,709 shares at an average price of 148p on 5 September. This purchase cost the insider around £99,000.

I think it’s significant that abrdn’s CFO has bought stock. Finance chiefs are top-level insiders and they generally have an excellent understanding of their companies’ operating activities and financials. I also think it’s interesting that Bruce has invested nearly £100k in stock. This suggests she’s quite confident Abrdn’s share price is set to rise.

However, it’s worth pointing out that she also made large purchases in March and December when the stock was trading at much higher levels. So her track record, in terms of timing, isn’t great.

Would I buy abrdn shares today? The answer to that is no. The stock does offer a high yield. However, I have a few concerns in relation to the company’s competitive advantage.

It’s worth noting that analysts at Deutsche Bank just downgraded the stock from ‘hold’ to ‘sell’.

Purchases from the CEO and CFO

Next up is housebuilder Vistry (LSE: VTY). Here, both CEO Greg Fitzgerald and CFO Earl Sibley bought stock on 8 September when it was trading at 804p. Combined, the two insiders spent around £248,000 on stock.

So now we have two top-level directors buying stock. That’s notable, to my mind. The more insiders buying, the more powerful the trading signal.

Vistry shares do look cheap at present. Currently, they trade at just five times this year’s earnings forecast. So there could be some value on offer here right now.

Having said that, I see this stock as quite risky, given current economic conditions. In recessions, housebuilders tend to underperform.

Given the risks, I think the safest move for me is to leave this stock alone for now.

£102k buy from a clued-up director

Finally, AIM-listed Alpha FX (LSE: AFX). It saw a £102,000 buy from board member Lisa Gordon on 13 September.

This director dealing activity looks really interesting to me due to the fact that Gordon has an investment background. Earlier in her career, she worked as an equity analyst. Meanwhile, she is also Chair of stockbroker Cenkos Securities. So we can assume she knows what she’s doing here.

Alpha FX continues to grow at a strong rate. Recently, the group posted revenue growth of 35% for the first half of 2022. And founder and CEO Morgan Tillbrook was very optimistic about the future.

“Although much of the world is moving into a challenging macro environment, I have never felt more confident about the potential of the business and our long-term growth prospects,” he said.

Putting this all together, I’d buy Alpha FX shares for my portfolio today. The stock isn’t cheap, so there is some valuation risk. However, all things considered, I see the risk/reward proposition here as attractive.

The good news for long-term investors like myself is that the weakness across the AIM has thrown up some very attractive investment opportunities. With that in mind, here’s a look at three stocks I’d buy today.

A top FinTech company

One of my top picks right now is Alpha FX (LSE: FX). It’s a fast-growing, founder-led provider of financial solutions that specialises in FX risk management and mass payments.

A trading update posted last month showed that Alpha FX has plenty of momentum at present. For the six months to 30 June, revenue was up 35% to £46m. Meanwhile, the company grew its client base significantly over the period, increasing its alternative banking accounts by 239%.

After a share price pullback this year, Alpha FX shares are valued attractively, in my view. With analysts expecting earnings per share of 62.2p for 2022, the forward-looking P/E ratio is about 29. I don’t see that as high, given the strong level of growth here.

Of course, if growth slows, the share price could decline given the high valuation. I’m comfortable with this risk however, given Alpha’s track record.

A cybersecurity play

Another AIM stock I’d snap up today is GB Group (LSE: GBG). It’s a leading provider of identity management solutions that serves blue-chip companies globally (HSBC, Volkswagen, and ASOS are just some of its customers).

GB Group shares have plummeted this year and I think the fall is overdone. In the company’s recent full-year results, for the year ended 31 March, it posted record revenue of £242.5m (up 11.4% year-on-year) and adjusted operating profit ahead of original market expectations. And looking ahead, the group said it’s well-placed to successfully achieve its strategic and financial objectives in FY2023 and beyond.

A risk to consider here is that the company could be impacted by the weakening economy. With the stock now trading on a P/E ratio in the low 20s however, I think the risk/reward profile here is attractive.

Video game champion

Finally, I’d also buy Keywords Studios (LSE: KWS). It’s a leading provider of technical services to the video gaming industry. This is another AIM company that has momentum.

Recently, it said it expects to post total revenue growth of around 34% for the six months to 30 June. Adjusted profit before tax is expected to be up around 35% year-on-year. It added that it had seen “robust demand” for all of the group’s services.

“Keywords has started the year very strongly, building on the momentum achieved in 2021,” commented CEO Bertrand Bodson.

It’s worth noting that the growth of the gaming industry could slow down a bit after Covid. This could potentially impact Keywords Studios’ growth. The forward-looking P/E of 32 here doesn’t really leave a margin of safety, so this is a risk to keep in mind.

I’m thinking long term here however, and I reckon this AIM stock should do well as the gaming industry grows over time.

Eye-watering earnings growth

Alpha FX’s (LSE:AFX) share price is up nearly 10% in the last year, while over the past three months it’s down 24%. At the time of writing, the shares are trading at 1,820p.

One way I like to gauge how quickly a growth stock is expanding is by looking at its historical earnings per share (EPS) growth. Between 2017 and 2021, the company’s EPS rose from 17.5p to 58.3p. 

By my calculations, this means that the firm – a business providing financial solutions within foreign exchange – had a compound annual EPS growth rate, or the constant rate of return per year, of 27.2%. This is both strong and consistent, but it’s no guarantee of future performance, of course.

In its full-year results, the business reported that revenue had risen 68% to £77.5m, while pre-tax profits nearly doubled to £33.18m, year on year. 

It’s also interesting to note that this company is debt free, having managed to build up a strong cash balance over recent years.

In addition, client numbers increased by 27% and average revenue per customer grew by 32%. Furthermore, the dividend payment rose from 8p to 11p, from 2020 to 2021, although I’m slightly concerned about the potential impact from the broader economic climate of rampant inflation.  

Growth through acquisitions

Next GlobalData (LSE:DATA) may also offer me attractive growth. In the past year, the shares are down 44%, while in the last three months they’re down 25%. At the time of writing, they’re trading at 960p.

Its EPS grew from 17.21p to 30.8p between 2017 and 2021, resulting in a compound annual EPS growth rate of 12.35%. While this isn’t as high as Alpha FX, it’s certainly competitive.

Between 2020 and 2021, revenue increased from £178.4m to £189.3m, while pre-tax profits rose from £28.6m to £32.6m. 

The business – an industrial intelligence firm – has made two acquisitions recently, expanding its reach into the automotive and agribusiness industries for “fuller scale and capabilities”.

It also paid a dividend in 2021 of 19.3p, up 14% on 2020. There is always, however, the threats posed by wage and cost inflation.

Overall, these two companies present me with appealing buying opportunities for long-term growth. The share prices have both fallen in recent times, so it’s potentially an attractive time to load up on the shares. I therefore think I will be adding these businesses to my portfolio very soon. 

This AIM stock is cheap

First up, Volex (LSE: VLX). It’s a British manufacturing company that specialises in power cords and cables. Its products help power a range of electronic devices including computers, medical equipment, and electric vehicles (EVs).

Volex’s recent full-year results, for the year ended 3 April, showed the company has a lot of momentum right now. For the year, group revenue was up 39% to $614.6m, while EV revenue alone surged 96% to $104.2m. Underlying profit before tax rose 24% to $51.4m.

This momentum is not reflected in the company’s valuation however. Right now, the stock trades at just 11 times this year’s earnings forecast. At that multiple, I see a huge amount of value.

It’s worth pointing out that debt has risen in recent years as a result of acquisitions. This adds risk.

All things considered however, I think the risk/return proposition here is attractive.

High-growth market

Next is GB Group (LSE: GBG). It’s a leading provider of identity management solutions that serves over 20,000 customers globally.

In recent years, this AIM stock has often had a very high valuation. Today however, it’s a different story. After a big share price fall in 2022, GB now trades at just 19 times this year’s estimated earnings.

At that level, I see a lot of value on offer. GB has a good track record when it comes to revenue growth. Over the last five years, it has grown its top line by about 180%. Meanwhile, the growth potential ahead is significant, given the growing prevalence of online fraud.

It’s worth noting that GB has made a major acquisition recently. So there’s some integration risk here.

With the P/E ratio now under 20, I think the stock is worth buying though. At that valuation, I wouldn’t be surprised if GB attracted takeover interest.

Major opportunities ahead

Finally, I’d also buy Alpha FX (LSE: AFX). It’s a founder-led financial services company that offers FX risk management and payments.

Alpha FX has grown at a phenomenal rate in recent years, registering three-year revenue growth of about 230%. And looking forward, the company expects to keep growing. In March, management said it sees “major opportunities” across all of its businesses.

Yet like a lot of other AIM stocks, Alpha FX has seen its share price fall significantly in 2022 as sentiment towards small-caps has deteriorated.

I’m looking at this share price weakness as a buying opportunity as I expect the stock to rebound when the economic backdrop improves.

This stock isn’t the cheapest around. Currently, the forward-looking P/E ratio is about 25. So the company will need to keep growing at a strong rate or its share price could fall.

But I’m confident it will, as its CEO is very ambitious.

Lloyds share price potential

Despite this bank’s seemingly favourable operating environment, its recent stock performance is left wanting. In fact, the share price is down around 6% over the last 12 months. And since the start of 2022, its decline is closer to 10%. Why is this?

Rising interest rates are undoubtedly good news for lending institutions. But high inflation is not. With fears of a recession slowing down economic growth, demand for business and personal loans is expected to suffer. This means the group may not actually be able to capitalise on the opportunity created by the Bank of England.

Despite this, I still see lots of long-term profit potential. Management plans for the firm to become the UK’s largest private landlord within the next decade, creating yet another stream of theoretically reliable income for the business. This strategy does expose the bottom line to the risk of falling property prices and subsequent rent adjustments. However, with the demand for housing still not satisfied, this move seems prudent, in my opinion.

I don’t think management will have much trouble maintaining its tasty 4.4% dividend yield, even if the Lloyds share price starts to climb. That’s certainly an interesting proposition for my income portfolio. But in terms of growth, its prospects seem mild at best.

Another UK share with better growth potential

While traditional corporate banking will probably always have its place, the rise of fintech is making waves. One example is Alpha FX (LSE:AFX).

The company is best known for its currency risk management services. However, in 2019, it launched a new alternative banking solution that enables businesses to manage payments and accounts from a single platform. The service also includes access to a bespoke payment network designed to handle enterprise-scale international transactions. It’s not only cheaper than the archaic wire transfer method but also near-instant.

Needless to say, that’s quite a technological advantage to have. So, it’s hardly surprising that this division already represents a quarter of the revenue stream within just two years, growing at a triple-digit rate. What’s more, unlike the Lloyds share price, this UK stock is up just under 40% in the last 12 months.

Obviously, Alpha FX isn’t a guaranteed success. There are other fintech companies out there offering similar solutions. And currency hedging, a risky and complicated process, is still the primary source of income. But given the explosive growth potential, I believe Alpha FX is a far better buy for my portfolio today than Lloyds.

Royston Wild: BAE Systems 

The BAE Systems (LSE: BA) share price lifted off in February as tragic events in Ukraine unfolded, and it’s stayed strong since then. The war in Eastern Europe illustrates the tense geopolitical backdrop that I think will support sustained and strong demand for BAE Systems’ defence products. 

In fact, BAE Systems has grown earnings in four of the past five years as global arms spending has risen. The only reversal came in 2020 when Covid-19 disruptions hit the bottom line. City analysts expect profits to keep heading northwards this year, and next too, as the West bumps up arms spending in light of recent events.

I think BAE Systems could be a particularly strong performer in May too as rising fears over rampant inflation boost demand for safe-haven shares like defence companies. 

Royston Wild does not own shares in BAE Systems.

Zaven Boyrazian: Alpha FX Group

Alpha FX (LSE:AFX) is a financial services group specialising in currency risk management and alternative banking solutions. The firm helps businesses mitigate foreign exchange risk while simultaneously enabling almost instant enterprise-scale international transactions – something not possible with archaic methods like wire transfers.

Corporate banks offer similar solutions and are a significant source of competition. However, these are often prohibitively expensive. By charging on a per-transaction basis, Alpha FX enables its clients to overcome this barrier to entry.

With an impressive track record of double-digit growth and its 2022 performance continuing to impress, I think it’s time to add more shares to my portfolio today.

Zaven Boyrazian owns shares in Alpha FX

Edward Sheldon: Smith & Nephew

My top British stock for May is Smith & Nephew (LSE: SN). It’s a healthcare company that specialises in joint replacement systems.

There are a couple of reasons I like the look of Smith & Nephew right now. One is that there’s a huge joint replacement backlog globally at the moment due to Covid-19. So, the company appears to be well positioned for growth in the years ahead.

Another is that the healthcare sector tends to be quite defensive in nature. So, the stock could hold up relatively well if we see a recession.

It’s worth pointing out that Smith & Nephew shares are not cheap. So, this adds a bit of risk. All things considered though, I see a lot of potential here.

Edward Sheldon owns shares in Smith & Nephew.

Stephen Wright: London Stock Exchange Group

I think that my top stock for May is one of the best companies in the UK. It combines a core business that has virtually no competition with other operations that have high margins, low costs, and generate huge returns.

The stock is London Stock Exchange Group (LSE:LSEG). The company operates the exchanges on which financial market transactions take place. These have high barriers to entry. But the company also has various other operations, including data, fixed income trading, and clearing services.

Stephen Wright does not own London Stock Exchange Group.

Michelle Freeman: Wizz Air

It’s no surprise to anyone that airline shares have had a rough time over the last two years. But with Wizz Air (LSE: WIZZ) down over 30% since the start of the year, I think its shares look potentially oversold compared to others. 

Yes, Wizz has more exposure to those Eastern European travel destinations that are impacted from the on-going war. But it has been diversifying its network and increasing capacity recently, including picking up more Gatwick slots from Norwegian.  

With the WTTC reporting triple-digit growth compared to last year, I wouldn’t be at all surprised to see the share price benefit accordingly. 

Michelle Freeman does not own shares in Wizz Air.

Andrew Mackie: Anglo American

My top stock for May is Anglo American (LSE: AAL). This may seem like a strange choice, given the 20% share price fall in the three days following a disappointing Q1 production report.

However, I would look beyond the headlines. At the moment, a lot of miners are suffering with high input costs, particularly diesel, Covid-related absences and production issues. However, all this is likely to do is push up prices even further.

The business remains a cash-generating machine, with a dividend policy of returning 40% of underlying earnings to shareholders.

For me, the commodities cycle is still very much in its early innings. With such a diversified portfolio, the sell-off has presented a good entry point for long-term investors.

Andrew Mackie does not own shares in Anglo American.

Andrew Woods: Tullow Oil

Tullow Oil (LSE: TLW) is an oil and gas exploration and production firm. It operates globally, but it has larger operations in Ghana and Kenya in Africa, and Guyana in South America.

The pandemic hit the business hard, resulting in a $1.2bn pre-tax loss in 2020. It recovered, however, to post a $200m pre-tax profit the following year.

In March, it increased its stake in two oil fields in Ghana, potentially increasing production by 4,000 barrels of oil per day. With oil prices at high levels, I think this firm could be a top stock for me in May.  

Andrew Woods has no position in Tullow Oil.

Paul Summers: XP Power

Having once made a big profit on the stock, I’m starting to think about buying XP Power (LSE: XPP) again. The share price of the critical power solutions provider has tumbled in the last few months due to a resurgence of Covid-19 in Asia, higher costs, and limited component supply.

Despite these headwinds, business is ticking along nicely. XP had a record order book of roughly £260m moving into Q2.

The valuation of 17 times forecast earnings looks pretty reasonable to me. There’s also a well-covered dividend to keep investors happy while the dark clouds pass. 

Paul Summers has no position in XP Power

John Choong: Dunelm

Dunelm (LSE: DNLM) was predicted to falter after Covid restrictions were lifted. But its most recent earnings report showed a 25% increase in its profits, with total sales up 10.6% year over year. Additionally, Dunelm has managed to maintain healthy margins of 10.8% whilst boasting a stellar balance sheet with zero debt.

Although its stock has taken a plummet due to disappointing retail sales figures, the fine print proves that the British retailer remains immune for the time-being, as household goods stores saw a 2.6% increase in sales. This is backed up by Dunelm’s own numbers, with an 8.5% increase in active customer growth.

John Choong has no position in Dunelm.

Roland Head: Redrow

I am picking FTSE 250 housebuilder Redrow (LSE: RDW) as my top stock for May. I think that shares in this founder-backed group could offer impressive value.

The risk of a UK economic slowdown is the main concern here. That could hit sales. But recent trading updates have not suggested any slowdown in demand for new housing.

In Redrow’s latest results, the company increased its sales and profit guidance for 2022 and said that profit margins were rising despite higher costs.

With the stock trading on six times earnings and offering a 6% dividend yield, I think Redrow offers excellent value.

Roland Head does not own shares in Redrow.

G A Chester: Integrafin Holdings 

Integrafin Holdings (LSE: IHP) owns Transact, one of the largest independent platforms serving UK financial advisors and their clients. It may not be as well-known as direct-to-consumer operator Hargreaves Lansdown, but it has a strong record of growth. 

Revenue has increased at a compound annual rate of 12% over the last four years and earnings have advanced at a rate of 14%. Negative market movements in asset prices are a risk, and wage inflation is also currently a friction. 

Nevertheless, after recent share-price weakness, and with a tailwind of structural growth in the UK wealth-management market, Integrafin looks a quality business on sale cheap. 

G A Chester has no position in Integrafin Holdings. 

Alan Oscroft: Kingfisher

At around the 250p mark, DIY specialist Kingfisher (LSE: KGF) looks cheap to me. The owner of B&Q and Screwfix staged a strong pandemic comeback. But that’s reversed in 2022, for a 30% fall over the past 12 months. The shares are now on a trailing P/E of only around seven, with dividend yields above 3.5%.

My main concern is that free cash flow for 2021-22 fell sharply. With net debt of £1.6bn, that could bite. But the company is buying up its own shares right now. I’d do the same.

Alan Oscroft has no position in Kingfisher.

Market corrections like this one can offer excellent buying opportunities for my portfolio. And I’m following the wisdom of legendary investor Warren Buffett to “be fearful when others are greedy, and greedy when others are fearful”.

With that in mind, let’s explore two UK growth shares from my portfolio that I think have been oversold by panicking investors. I’d like to buy more of both.

A fintech disrupting corporate banking

Alpha FX (LSE:AFX) provides two main solutions to small and medium-sized businesses. The first is a currency risk management service. And the second is a suite of alternative banking tools, including the capability of completing international enterprise-scale transactions significantly faster and cheaper than traditional methods.

Over the last 12 months, this growth share has actually climbed by an impressive 30%. That certainly doesn’t sound like a stock in distress. But since the start of 2022 it’s down by almost 20% following its latest trading update.

Despite what the downward trajectory suggests, the report was actually quite encouraging, in my opinion. Revenue for 2021 is expected to come in ahead of analyst expectations at £77m – a 67% year-on-year jump. What’s more, this rapid growth has offset the expected margin pressures from increased hiring and newly acquired office space.

To me, this looks like a growth share caught in the crossfire of the current market environment. But I will admit, its valuation remains fairly lofty with a price-to-earnings ratio of 39. That could open the door to further volatility. However, given the consistent performance delivered by management so far, this is a risk I’m willing to take.

A growth share in the digital marketing space

Unlike Alpha FX, dotDigital‘s (LSE:DOTD) 12-month performance hasn’t been as pleasant. In fact, the growth share is down more than 20% over the last year. As a reminder, this company provides a cloud-based data-driven marketing platform from which companies can automate their advertising campaigns to maximise sales.

With so many new e-commerce businesses popping up, courtesy of the pandemic, demand for dotDigital’s solution seems to be skyrocketing. At least, that’s what the latest trading update would suggest, despite the lacklustre share price performance.

Going into the numbers, average revenue per customer (ARPC) increased by 19% during the second half of 2021, reaching £1,422 per month. And in turn, this pushed total half-year revenue up by 10% to £30.9m.

In my experience, when a business delivers solid results, and the share price falls, it’s usually a great buying opportunity. However, it’s not a risk-free endeavour. Scrutiny and regulations surrounding data privacy are mounting. Apple has already implemented data gathering restrictions on all devices running iOS 14. And given that dotDigital’s platform is built around analysing user data, it could create complications.

But this isn’t the first time restrictions on data gathering were implemented. And since the company was able to promptly adapt to the introduction of GDPR, I remain confident it can do the same again. That’s why I see the latest tumble in this growth share as a buying opportunity for my portfolio.

A future fintech superstar?

When it comes to doing international business, fluctuating currency exchange rates can significantly impact the bottom line. Meanwhile, moving large quantities of money across borders through standard methods like a wire transfer is both slow and expensive.

Alpha FX (LSE:AFX) is looking to change all that. By providing its services and expertise on a pay-as-you-go cost structure, the group has been able to cater to businesses of all sizes. That’s proven to be quite advantageous over larger financial institutions offering similar services that are often inaccessible to smaller enterprises.

Looking at the latest half-year report, revenue growth is exploding. Total sales over the first six months of 2021 came in at £34.2m versus £18m the year before. That’s a 90% jump! So it’s hardly surprising that the shares of this UK business are up 55% over the last 12 months.

As with any investment, especially growth ones, there are some risks to consider. Foreign exchange risk management is a complex process. And if a mistake is made, it could have a severe impact on a client’s profits. Needless to say, I doubt a customer would stick around if that happened. Meanwhile, with new fintech innovations popping up, its enterprise-scale international payment solution may soon face some sizable competition.

Having said that, I believe the risks are worth the potential reward. So, I’m definitely considering adding more shares of the UK company to my Stocks and Shares ISA in 2022.

Can these UK shares make a comeback?

One British stock that hasn’t been a stellar performer in my portfolio over the past year is Learning Technologies Group (LSE:LTG). The company provides a suite of remote learning tools for employers to train their staff from anywhere in the world.

In 2020, a remote learning solution was unsurprisingly in high demand because of the ongoing pandemic. Unfortunately, there were some initial disruptions surrounding new project launches. However, it seems those problems have been largely resolved. Looking at the latest half-year results, revenue has grown by 29% over the first six months of 2021.

Some 7% of this growth originated from organic sources. The rest came from acquisitions, which the company has a habit of making. Bolt-on acquisitions can be a source of long-term value creation, but there’s always the possibility that future performance doesn’t deliver on expectations. That’s why seeing organic growth start to materialise is encouraging in my mind.

There are some concerns that the demand for remote learning solutions will suffer once the pandemic ends. While I think there is some merit to this fear, shares of this UK business were thriving long before Covid-19 turned up. And I believe they can continue doing so long after the virus is gone. Therefore, I’ll personally be using the recent drop in the stock as a buying opportunity for my ISA.

Rupert Hargreaves: Bloomsbury Publishing

Bloomsbury Publishing (LSE: BMY) is my top British growth stock for January. A rise in the demand for reading material through the coronavirus pandemic has generated windfall profits for the company over the past two years.

Bloomsbury aims to capitalise on this newfound love of reading in the years ahead. Analysts believe this will translate into earnings growth of 11% this year and 10% in 2023.

Of course, this growth is not guaranteed. Rising inflation could cause consumers to cut back on spending on non-essential items like books. Despite this headwind, I would buy the stock for my portfolio.

Rupert Hargreaves does not own shares in Bloomsbury Publishing.

Zaven Boyrazian: Frontier Developments

Frontier Developments (LSE:FDEV) is a game development studio and publishing house. It’s responsible for a popular collection of titles, including Elite Dangerous and Jurassic World Evolution.

The stock took a significant hit in 2021 after management lowered its revenue guidance due to underperforming sales. However, its first entry of the Formula 1 franchise is coming out later this year, along with multiple other projects through its publishing arm.

Personally, I think the lineup of new releases could drastically boost sales again. And with further franchise titles coming out in 2023, including Warhammer, the stock looks like it has excellent growth potential in my mind.

Zaven Boyrazian owns shares in Frontier Developments.

Royston Wild: B&M European Value Retail 

City analysts don’t expect B&M European Value Retail (LSE: BME) to record ripping earnings growth in the near term. In fact, they’re expecting profits to reverse over the next 12 months or so as supply chain costs balloon. It’s my opinion, however, that earnings could actually surprise positively as shoppers seek out bargains in this high-inflationary environment. Indeed, B&M’s trading statement in early January showed profits exceeding analyst estimates.

This FTSE 100 share is unlikely to be a flash in the pan. Discount grocers Aldi and Lidl have grown rapidly over the past decade as consumers prioritise value. Encouragingly, B&M is expanding rapidly to make the most of this opportunity, too.

Royston Wild does not own shares in B&M European Value Retail.

G A Chester: Gym Group 

Low-cost operator Gym Group (LSE: GYM) was expanding and delivering strong revenue and cash-flow growth before the pandemic. Inevitably, government-mandated shutdowns had a negative impact on the business. 

There remains some risk from coronavirus, but I think Gym is cheaply valued on its pre-pandemic cash flows. Furthermore, it’s well funded to exploit an unprecedented growth opportunity coming out of the pandemic. 

Due to large numbers of store closures in UK towns and cities, the company has been offered dozens of high-quality sites on attractive terms. Management has never seen the property market so favourable and is taking full advantage to accelerate expansion. 

G A Chester has no position in Gym Group.

Ed Sheldon: Sage

My top British growth stock for January is Sage (LSE: SGE). It’s a leading provider of cloud-based accounting and payroll solutions with a focus on small and medium-sized businesses.

I’m bullish on Sage for a couple of reasons. Firstly, I expect the company to benefit from the ongoing global economic recovery. Better economic conditions should lead to higher demand for the company’s accounting solutions.

Secondly, the valuation seems very reasonable. Currently, Sage sports a forward-looking P/E ratio of around 32. By contrast, US rival Intuit currently trades at around 50 times this year’s forecast earnings.

One risk to consider here is competition from Intuit and other players such as Xero. I think this risk is baked into the valuation, however.

Edward Sheldon owns shares in Sage and Xero.

Roland Head: Electrocomponents

Profits at industrial and electronic parts supplier Electrocomponents (LSE: ECM) have risen by an average of 40% per year since 2016.

According to CEO Lindsley Ruth, trading was strong during the third quarter. He now expects results for the year to 31 March to be ahead of broker forecasts. My sums suggest we could see earnings growth in excess of 40% in 2021/22.

The main risk I can see is that with the stock trading on 26 times forecast earnings, any disappointment could cause the shares to slide. However, I expect further growth.

Roland Head does not own shares of Electrocomponents.

Christopher Ruane:  S4 Capital

After strong growth for most of 2021, digital ad group S4 Capital (LSE: SFOR) fell in the final quarter. It had a weak start to 2022. Like S4 boss Sir Martin Sorrell, I have increased my holding this month.

One risk is the cost of integrating acquisitions eating into profits. But the company continues to grow aggressively, acquiring another US agency this month. For 2022 it is targeting 25% growth in both gross profit and net revenue. S4 is set to benefit from growing spend on digital advertising. 

Christopher Ruane owns shares in S4 Capital.

Paul Summers: Biotech Growth Trust

Last year was pretty awful for shareholders of minnow-focused Biotech Growth Trust (LSE: BIOG). As a patient, long-term investor, however, I’ve been taking this period of selling pressure as an opportunity to load up.

Whether 2021 will see a return to form is hard to say. On an optimistic note, directors believe the valuations given to small-cap stocks in the sector are now “very compelling”. A rise in merger and acquisition activity, the passing of price legislation in the US and increased regulatory approval of drugs (held up by the pandemic) could also spark a recovery.

Paul Summers owns shares in Biotech Growth Trust

Harshil Patel: Alpha FX 

My top British growth stock for January is financial solutions company Alpha FX (LSE:AFX). It’s a founder-led British business focused on two areas: foreign exchange risk management and alternative banking. 

Trading has been strong, and the company has proven sales and profit growth over several years. I like that it has a diversified client base and client numbers are also growing.  

I’d say not only is Alpha FX a growth stock, but it’s also a good quality business with a double-digit profit margin. 

With a market capitalisation of under £1bn, I reckon it has much room to grow further.  

Harshil Patel does not own shares in Alpha FX.