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It has been a funny year for growth stocks. In some areas, these have been the hottest shares to buy. Yet in some other sectors, the star growth names have disappointed in performance. So when I’m thinking about which stocks to buy now for 2024, here are my selective picks.
A contrarian area to consider
The first area I’d allocate some of my £1,000 to is retail. This might sound odd, given the doomsayers talking about the death of the high street. Of course, demand from consumers is more online, but there’s no reason why a company can’t offer both online and physical capabilities and perform very well.
For example, that’s the case with Pets At Home. The UK’s go-to retailer for pet supplies is continuing to grow. The latest results for H1 showed consumer revenue up 8.6% year-on-year.
It has a good mix of generating revenue both in-store and online and I don’t see this changing anytime soon. People like to have the ability to try and see goods (particularly in the pet market), even if they then go online and buy it there. A risk is that consumers change their spending habits, or that they tighten their belts if the economy worsens in 2024
The share price is up 21% over the past year. I feel there’s more potential for this to run next year.
Time to arm up
Another area of growth I like is aerospace and defence. Let’s be real, the need for government spending on defence has stepped up several gears over the past year.
Some might think that this is a mature sector without any real potential for growth. This isn’t correct. For example, Babcock International shares are up 39% over the past year. The company specialises in critical services related to international defence.
With an increase in the order book and recent wins with new contracts, 2024 is looking like it could be very profitable for the business. Of course, I’m not in any way supporting conflicts by wanting to buy the stock. Rather, it’s a sad reality that scuffles are becoming more pronounced around the world.
This sector is competitive though, so I’d consider spreading my money around two or three stocks to diversify my risk.
Using my £1,000
I’m considering buying the two shares with a portion of my available cash. With the whole amount, I’d aim to pick four stocks from the two sectors, to allocate £250 in each.
The aim here is to have enough in each one so that should I see large growth next year, it’ll make a financial difference to me. At the same time, by splitting up the money to different shares, I reduce my risk of putting everything on black and it coming up red.
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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended Pets At Home 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.News Related