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With Summer holidays now but a distant memory for many investors, like others I have been adding shares to my portfolio over the course of September. I bought shares in four different companies for my SIPP over the past month.
Here they are.
Long-term growth story
Two of the shares are UK companies I think have strong long-term business growth prospects.
One was new to my SIPP — Anpario (LSE: ANP).
The company makes animal feed additives. Going back a few years, Dechra Pharmaceuticals was a great stock market success story before being taken private.
Dechra’s price ended up being too high for me to invest, but I continue to like the economics of animal nutrition. Customers are willing to pay to keep livestock healthy and demand is resilient.
Anpario shares are up 28% in five years, but have more than doubled since September 2023.
Interim results this month showed year-on-year sales growth of 34% and a 62% jump in pre-tax profit. The US business performed much better than it had been doing but an uncertain market outlook there remains a risk.
Full steam ahead
Another share I already owned in my SIPP but bought more of this month is Journeo (LSE: JNEO).
I thought its interim results this month showed strong growth prospects. But the market sent the Journeo share price down sharply, perhaps because of a slight fall in revenues.
With both selling for 17 times earnings, neither Anpario nor Journeo may look obviously cheap. But, like Anpario’s sharply stronger profits, I am hopeful that Journeo can turn a strong sales pipeline and growing list of contract wins into higher earnings.
A recent acquisition should help boost earnings in coming years and I think Journeo’s focus on public transport products and services puts it in line to benefit from strong spending on this area in both the UK and other European markets.
But integrating an acquisition is never easy and can distract management. Notwithstanding that risk, I think the Journeo share price – up 880% in five years – may hopefully still have further to run.
Retailers with work to do
Two other shares I bought for my SIPP are very different retailers, with the same challenge — keeping sales growing.
B&M has seen its share price tumble 26% so far this year. Recent weakness in fast-moving consumer goods sales is a concern, but I see the profitable business as being in strong underlying condition.
I bought some more B&M shares for my SIPP this month – and the company’s chief executive has also been spending on the shares.
The other retailer may seem worlds away from B&M — on-trend yoga outfit hotspot Lululemon Athletica (NASDAQ: LULU).
Not trendy enough though. Lululemon’s profit warning this month pointed to tired product lines in its key North American market meanings some shoppers are looking elsewhere.
But a 54% fall in the Lululemon share price so far this year looks overdone to me.
The company has a powerful brand, large customer base, attractive profit margins and extensive international growth opportunities.
Management is candid about the work to be done in the firm’s North American business. Meanwhile, overseas sales look set to keep growing strongly.
On a price-to-earnings ratio of 12, Lululemon shares look cheap to me.
