Business & Investment

I paid attention to this UK growth stock.This is what i do now

Veterinary service provider stock CVS group (LSE: CVSG) Following the latest updates on trading, it was up again this morning.Did you buy this growth stock? The last time I wrote about it in September, I would be sitting on a 30% profit. I’m focusing on long-term earnings, which rarely get bad results in just four months.

Top growth stock

Total sales increased 9.4% to just under £ 246m in the six months to the end of December. Similar sales also increased by 7.8%. The latter may be slightly lower than the same period in 2019, but we need to consider how bad 2020 was for most businesses.

According to CVS, this resilient performance was the result of growth in key practice sectors and increased demand in online pharmacies and retail sectors (animate).As a matter of course Cry of animal companions in 2020, AIM listed companies saw an increase in new client registrations during the period. The number of members of the Healthy Pet Club Preventive Medicine scheme also increased by 3.6% to reach 430,000.

In other news, the company’s non-critical employment costs fell slightly from 51% of total sales to 48.9%. Veterinary vacancy rates have also dropped.

To conclude, the CVS Group was active at the forefront of the acquisition, purchasing four practices in six months. I think this should help further strengthen our position as one of the major veterinary service providers around us. Currently, more than 480 surgeries are performed in the United Kingdom, the Netherlands and the Republic of Ireland.

What now?

Regarding trade, I think the recent momentum will continue. All CVS practices remain open, in line with the guidance issued at the beginning of the third UK blockade. Importantly, the company is now able to provide important services related to animal welfare as well as emergency work.

But the main reason for staying bullish on this growing stock is that pet ownership doesn’t tend to reverse. We also feel that it is unlikely to cut spending on furry friends, regardless of the performance of the UK economy.

Anyway, the long-term outlook is too good for me to deposit profits in the bank so quickly. Still, I have to be aware of the risks involved.

Future volatility?

It’s a good old profit-taking match that can cause stock prices to lose momentum. This doesn’t feel unreasonable. After all, the value of CVS has more than doubled since the dark days of March. Price Earnings Ratio (P / E) Forecast 27 shows that a lot of good news is already priced.

CVS certainly has shape when it comes to violent and protracted stock price fluctuations. Between November 2017 and January 2019, the company’s reputation plummeted as it struggled to hire veterinarians in light of the results of the Brexit referendum. Withdrawal from the EU may be a one-off event, but this does not deny the fact that such a fall can occur.

So I bought it a few months ago and it didn’t sell.However, I Do Still, I think stocks can reward people with long investment periods. I will not buy this growth stock today. We are cautious about how much the price will rise in 2021 alone. As always, no matter how encouraging the outlook is, it’s important to be fully diversified elsewhere.

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Paul summers There are no positions in any of the listed shares. The Motley Fool UK does not have a position in any of the listed shares. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by considering different insights, Better investors than us.

I paid attention to this UK growth stock.This is what i do now I paid attention to this UK growth stock.This is what i do now

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