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On the hunt for UK shares that may double, treble, quadruple, or even more? Join the club!
Over the past five years, the Rolls-Royce share price has soared 1,228%. That sort of performance is remarkable for a mature blue-chip company. For comparison, the wider FTSE 100 is up by 59% during the same period.
But with a market capitalization of £91bn, Rolls-Royce is clearly well known to many investors — and closely watched.
There are other UK shares that are much smaller but that have also been doing well – and that I think could potentially continue to do well in future.
Strong news flow
One of those is Journeo (LSE: JNEO).
I wrote just a few days ago that having already invested in Journeo, I was hoping the share price might fall a bit so I could increase my stake.
Since then, things have gone the other way. Journeo jumped in recent days following news of an acquisition that the City seemed to like.
That means that the Journeo share price is now up 58% since the start of the year – and 817% over the past five years.
But that still means its market capitalization, at £78m, is small enough to fly beneath many investors’ radar.
Simple business, with sizeable potential
The latest acquisition offers cross-selling potential for Journeo, potentially helping it increase its share of spend by existing clients as well as hopefully attracting new ones.
What I like about Journeo’s business model is that it is simple but effective.
With ongoing spending on public transport like trains, its potential end market is set for sustained growth. But there are a limited number of players offering the sorts of solutions it does, such as bus arrival time display boards. The more contracts it wins, the more credibility it gains to bid for new contracts – and hopefully build economies of scale.
Journeo has operations outside the UK: for example it has been supplying equipment to New York City’s subway system. Hopefully that international footprint will grow.
But, for now at least, I see that as secondary to the investment case. The UK market alone for the transportation-related products and services Journeo is marketing is sizeable and set to grow. Simply continuing to grow its market share here could ultimately be a big win for Journeo.
Looking to the long term
That helps explain why this UK share now trades on a price-to-earnings (P/E) ratio of 18.
That may not look cheap. But with recent contract wins and the acquisition potentially set to see earnings grow, the prospective P/E ratio could fall. Last year’s diluted earnings per share grew 36%.
The acquisition brings a risk that management may focus on integrating the business and neglect the existing one. However, management has been doing a sterling job lately and I am optimistic that can continue.
I think this UK share, even after growing more than 800% in five years, still looks like a possible bargain. I plan to hang onto my shareholding and see Journeo as a share for investors to consider.
