Think the FTSE 100 has no good growth stocks? Think again…

In terms of development shares, the S&P 500’s in all probability the primary place traders look. The UK inventory market doesn’t have something that matches as much as Amazon, Nvidia, and Microsoft.

Regardless of this, there are some high quality development corporations within the FTSE 100. And looking out the place different traders aren’t paying consideration is an efficient technique for locating a discount.

UK tech shares

Rightmove (LSE:RMV) doesn’t have the identical scale as the large US tech corporations. However I don’t assume the standard of the enterprise is in any manner inferior.

To begin with, the corporate’s been rising steadily. During the last 10 years, revenues have greater than doubled and working margins have persistently been above 70%. 

By any customary, that’s spectacular. However the actually spectacular factor in regards to the enterprise is that it’s managed to attain this with out having to reinvest the money it generates. 

Rightmove’s largely an internet operation, which implies it doesn’t have to make use of its earnings for changing equipment or upgrading properties. And it is a huge optimistic for shareholders.

This implies 90% of the money the corporate generates via its operations turns into obtainable to traders. And the agency retains rising whereas paying dividends and shopping for again shares.

That’s a strong mixture. And whereas the share value has largely gone sideways over the past 5 years, I feel the enterprise continues to be in a robust place. 

Dangers and rewards

Rightmove’s attractiveness is constructed on its aggressive place. It’s the UK’s largest on-line property market by far and this enables it to keep up such large margins.

Traders ought to observe nevertheless, that the aggressive risk has been ramping up not too long ago. CoStar Group – the US property knowledge and analytics agency – has set its sights on the UK market. 

Rightmove received’t be straightforward to disrupt. Because the UK’s largest platform, it ought to proceed to enchantment to patrons and sellers and rivals have beforehand discovered it laborious to draw one with out the opposite.

Regardless of this, I don’t assume both the corporate or its traders ought to be complacent. CoStar’s a a lot larger enterprise and its information and assets ought to be taken severely.

Nearer to residence, there are additionally different points to think about. Inflation appears prefer it’s selecting up once more and this might dampen exercise within the property market, which is the place the agency will get its revenues.

It might be unwise to fake investing in Rightmove doesn’t include dangers. However whereas it retains its market-leading place, I feel the enterprise has good scope for development.

One for the watchlist

At a price-to-earnings (P/E) ratio of 26, Rightmove shares aren’t precisely being missed. However they’re clearly higher worth than they have been 5 years in the past.

Even in comparison with the likes of Alphabet and Meta, the enterprise has maintained large working margins. And it’s proven the flexibility to develop whereas distributing money to its shareholders.

This all comes from Rightmove’s dominant market place. Whereas this stays intact, I feel it ought to a minimum of be on the ‘into account’ listing for traders seeking to for shares to purchase.