Each month, we ask our freelance author traders to share their high concepts for progress shares with you — right here’s what they mentioned for August!

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FRP Advisory 

What it does: FRP helps companies in financial hassle by offering recommendation on restructuring, debt and pensions.

By Royston Wild. Discovering strong progress shares to purchase is changing into growing difficult for UK traders. Inflation is hovering and financial progress is stalling, placing company revenue forecasts beneath growing pressure. 

However FRP Advisory Group (LSE: FRP) is a inventory that’s set to learn from these deteriorating circumstances. The enterprise gives a spread of advisory providers to corporations in monetary misery, the variety of which is hovering in Britain. Increased rates of interest imply that companies are struggling to pay their money owed.

In line with tax, audit and advisory agency Mazars Accountants, the variety of company insolvencies has rocketed 70% over the previous yr, to 19,191. Sadly it has warned, too, that “the dismal outlook means extra ache for companies is probably going.” 

FRP’s share worth has slumped extra just lately. That is due to rising prices that triggered income to fall in its newest monetary yr (to April 2022). 

I contemplate this to be a fantastic dip shopping for alternative and anticipate FRP’s shares to bounce again as buying and selling exercise gathers momentum. Revenues at FRP leapt 21% year-on-year in fiscal 2022, and rose 11% on an natural foundation. 

Royston Wild doesn’t personal shares in FRP Advisory. 

Kainos

What it does: Kainos is a know-how firm that helps private and non-private organisations with digital transformation.

By Edward Sheldon, CFA. Kainos (LSE: KNOS) shares have skilled a major pullback this yr as progress shares have fallen out of favour and I feel this has created a compelling funding alternative.

Kainos is benefitting as corporations and authorities organisations embrace know-how and that is mirrored within the group’s monetary efficiency. Final monetary yr (ended 31 March 2022), income was up 29%. In the meantime, on the finish of the interval, the group’s contracted backlog was £260m – up 26% yr on yr.

Wanting forward, I’m assured that Kainos will proceed to develop at a wholesome price. That’s as a result of digital transformation can assist organisations decrease prices and beat inflation. It’s value noting that CEO Brendan Mooney just lately mentioned that demand for the corporate’s providers has “by no means been larger”.

Now, this progress inventory isn’t low-cost. Presently, its P/E ratio is within the excessive 20s. This provides danger to the funding case. Nevertheless, I consider that long-term traders within the firm, like myself, might be rewarded over time.

Edward Sheldon owns shares in Kainos

dotDigital

What it does: dotDigital is a SaaS firm offering an omnichannel advertising automation and buyer engagement platform.

By Zaven Boyrazian. The know-how sector hasn’t had a lot love in 2022. But, regardless of the volatility, there stay loads of engaging alternatives for my portfolio. One which’s caught my consideration for the time being is dotDigital (LSE:DOTD).

With the tailwinds from the pandemic slowing down, top-line progress adopted go well with, upsetting fairly just a few momentum traders. But even with out these catalysts, income continues to broaden at a decent price. In the meantime, its newest buying and selling replace confirmed a 16.8% soar in common income per buyer.

In different phrases, shoppers are spending more cash on the agency’s advertising platform. And even with an unsure financial outlook, advertising electronic mail volumes are up 22% to 29.four billion versus a yr in the past. This all bodes nicely for the corporate, particularly given its fierce competitors from different platforms.

Pairing this with a seemingly low-cost valuation makes dotDigital seem like a wonderful progress addition to my portfolio this month.

Zaven Boyrazian owns shares in dotDigital.

Domino’s Pizza

What it does: Domino’s is a UK-based pizza supply firm and FTSE 250 constituent.

By Paul Summers: On the time of writing, shares in Domino’s Pizza (LSE: DOM) are down by over a 3rd in 2022. That’s not solely shocking. The squeeze on discretionary earnings was by no means more likely to be excellent news for the agency. 

For a long-term progress investor like me, nevertheless, that is trying like a chance to accumulate the inventory at a cheaper-than-usual valuation. A forecast price-to-earnings (P/E) ratio of 14 for the present yr is beneath the 5-year common of 16. There’s additionally a 3.5% dividend yield to reinvest whereas I wait.

I’m not anticipating a rip-roaring restoration in earnings over the subsequent yr or so. Nonetheless, respectable interim numbers firstly of August coupled with encouraging information on the seek for a brand new CEO might herald a change in market sentiment.

Paul Summers doesn’t personal shares in Domino’s Pizza.

Safestore

What it does: Safestore is a number one supplier of self-storage amenities within the UK and Continental Europe

By Christopher Ruane. I proceed to see worth in Safestore (LSE: SAFE). Its shares are down 20% since April, though they’re nonetheless 7% forward of the place they had been this time final yr.

Within the first half, income grew 15% in comparison with the identical interval final yr, diluted earnings had been up 67%, working money inflows grew 25% and the dividend additionally grew 25%.

That’s wonderful progress – and I anticipate extra of the identical in future. Self-storage stays a reasonably undeveloped trade within the UK in comparison with the US, for instance. I see numerous area for progress. Safestore’s robust model and confirmed working mannequin might assist it capitalise on that. One danger I see is rivals making an attempt to woo prospects with low costs, pushing down revenue margins throughout the trade.

However I feel Safestore has a fantastic, easy method in a market with robust long-term progress prospects.

Christopher Ruane owns shares in Safestore.

CMC Markets

What it does: CMC Markets specialises in on-line buying and selling, offering publicity to a spread of various asset courses. It has a world presence.

By Andrew Woods. A look on the historic earnings information for CMC Markets (LSE:CMCX) instantly signifies speedy progress over the previous 5 years. For the yr ended March, between 2018 and 2022, earnings per share (EPS) rose from 17.3p to 24.8p.

By my calculations, this leads to a compound annual EPS progress price of seven.5%. For me, I discover this engaging in a progress inventory. Over that point interval, income additionally grew from £209m to £325m.

It’s fairly clear that the agency benefited from elevated buying and selling exercise throughout the pandemic. As prospects loved larger disposable earnings and had extra time to dedicate to investing, the enterprise noticed its revenue surge. What’s extra, larger volatility within the inventory market enabled the agency to derive extra earnings from worth spreads.

Nevertheless, income fell by round £100m between 2021 and 2022, suggesting that buyer curiosity and exercise might have declined following the pandemic. However, income and pre-tax revenue are nonetheless larger than pre-pandemic figures.  

Andrew Woods has no place in CMC Markets.