Up 153% and 48%, here are 2 top growth stocks to consider in October
These UK growth stocks have increased sharply in value over the last five years. And I’m optimistic they can continue marching higher, making them good shares to consider.
Serabi Gold
Investing in mining stocks can be a painful ordeal at times. Take Serabi Gold (LSE:SRB). Its share price struggled for traction between 2020 and 2023 as mine development issues and funding problems — common drawbacks for smaller-scale miners — weighed heavily on its share price.
But its shares have since exploded as output at its Coringa mine asset has finally come on-line. This has enabled the company to capitalise on long-running growth in gold prices, and driven the Brazilian miner’s share price 153% higher over a five-year horizon.
Company earnings soared 323% year-on-year in 2024. And supported by steady production ramp ups and a rising gold price, City analysts forecast further earnings growth, of 66% and 42% in 2025 and 2026 respectively.
These heady forecasts also reflect a strong outlook for gold prices as geopolitical and macroeconomic worries linger. Production and development issues remain a threat for Serabi, naturally. Yet I believe the cheapness of Serabi’s shares more than factors in such risks.
Today, it trades on a price-to-earnings (P/E) ratio of 5.4 times for 2025, falling to 3.8 times next year. A sub-1 price-to-earnings growth (PEG) ratio of 0.1 spanning the next two years underlines the miner’s excellent value credentials.
Games Workshop
Fantasy gaming specialist Games Workshop (LSE:GAW) has also risen strongly over the last five years. Up 48% in the period, it even claimed a place in the prestigious FTSE 100 index last December.
Its impressive ascent hasn’t been a cakewalk however, as the graph above shows. Slower sales and worries over the company’s hefty valuation forced its shares sharply lower between autumn 2021 and 2022.
But having emphatically answered questions over its growth prospects, Games Workshop shares have rebounded strongly. Not everyone is familiar with its game (no pun intended), but the company is the world leader in the tabletop gaming hobby, commanding a loyal customer base and enjoying monster margins on its products.
The niche market in which it operates has significant global growth potential. And massively successful product launches since then — including the latest version of its Warhammer 40,000 franchise in 2023 — show Games Workshop has lost none of its allure, allaying investor concerns over future earnings.
It has also worked hard to bolster licensing revenues, and is seeking further progress here through a landmark deal with Amazon to create TV and film content.
Games Workshop faces dangers of its own, such as weak consumer demand due to tough conditions. The company’s also battling rising competition and the relentless rise of counterfeit miniatures.
Yet I feel the Footsie company can continue to deliver over the long term. Due to product launch timings, analysts expect it to follow a 20% earnings rise last financial year (to May 2025) with a 2% drop this fiscal year. But it’s tipped to return to growth with a 6% bottom-line increase in financial 2027.
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Royston Wild has positions in Games Workshop Group Plc. The Motley Fool UK has recommended Amazon and Games Workshop Group Plc. 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.
