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2 of the best growth stocks to buy in 2022 – The Motley Fool UK

I’m searching for the best growth stocks to buy in 2022. Here are two top UK shares on my radar right now.

A growth stock for the e-commerce boom

The e-commerce boom has pushed the levels of online fraud to endemic levels. Lawmakers and businesses are fighting back and today, the Financial Conduct Authority announced it will be rolling out Strong Customer Authentication rules from 14 March. This will require shoppers to verify their identity when purchasing online, for example “through their banking app or a one-time passcode via text or phone call”.

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This increased focus on fraud has plenty of upside as the levels of online shopping steadily grow. It’s why I’m considering buying GB Group (LSE: GBG) shares for my investment portfolio. This UK growth stock provides retailers and product manufacturers with address and identity verification services. Organic sales here rose 12.6% in the six months to September, latest financials showed.

GB Group also has a long record of double-digit annual earnings growth behind it. And I’m expecting the company (along with City analysts) to get firmly back on the front foot following a likely profits reversal in this fiscal year (to March 2022). I’d buy the business even though the introduction of online sales taxes could hit revenues hard if e-commerce volumes subsequently slip.

A top FTSE 100 share!

House price growth has been explosive over the past year. According to Halifax, the average UK property rose 9.8% in value in 2021, the fastest rate of annual growth for 17 years. However, Halifax thinks house price growth could slow “considerably”, given the prospect of interest rate rises to curb inflation, along with rising stresses on household budgets.

I own Barratt Developments (LSE: BDEV) shares. And the big question for me is whether or not property price growth will remain strong enough for the homebuilders to increase profits by a decent amount. I sincerely believe the answer is ‘yes’. In fact, I think the pace of growth could once again surprise to the upside in 2022.

Okay, the Stamp Duty holidays that boosted home values last year is no more. But a slew of other supportive factors remain in play to keep the market buzzing. Interest rates are still likely to remain well below historical norms, even if the Bank of England does tighten monetary policy.

Significant government support via the Help to Buy equity loan scheme remains in play. And, of course, a shortage of new properties entering the market should keep home prices rising nicely too.

These elements have driven yearly profits reliably higher at Barratt for a long time now. The only profits drop came in financial 2020 when Covid-19 hit sales and build rates and caused costs to balloon. City analysts expect the bottom line to continue growing healthily following this blip too.

However, the impact of rising costs on the builder’s profits can’t be taken lightly. But, all things considered, I think this FTSE 100 share is a white-hot growth stock for me to buy more of today.

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In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

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Royston Wild owns Barratt Developments. The Motley Fool UK has no position in any of the shares mentioned. 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.


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