1 UK stock I’d buy now and aim to double my money

To me, the situation in the London stock market looks promising. And it’s the best time to hunt for stocks that have the potential to double your money in a reasonable time scale. In fact, I have found a British stock that works.

This company Alumasc (LSE: ALU). It provides a wide range of products related to buildings, for water management, roofing and other equipment.

In October, it posted a strong trading update. Volume and margin have “strong” and ahead of the same period as the previous year. Transportation and material costs have become “stabilization”. But energy costs and currency exchange rates remain volatile. However, the director expects the business to benefit from a “a strong platform for long-term growth”.

Vulnerable to economic downturns

I would classify the business as vulnerable to the effects of general economic downturns. But the directors seem confident that Alumasc has a strong brand and a solid position in every market niche. And he expects business to improve next year.

Meanwhile, Analysts City predict earnings will likely increase by around 4% in the trading year to June 2024. And in the current economic environment, I see that a small increase in earnings as positive.

But the price seems stingy. With the share price close to 155p, the earnings multiple is expected to be just six for the trading year to June 2024.

And one of the reasons for the low rating may be the volatile earnings record over the years. Indeed, from one year to the next, earnings are as likely to plunge as they should soar higher. For example, they increased by a three-digit percentage in the 2021/22 trading year due to the order book caused by the pandemic. And the share price increased almost 300% after the collapse of Covid 2020.

Support the winning contract

But in the past year, the stock has fallen just over 30%. And there’s a lot of potential value offered at its current price. Indeed, the company’s history of large swings in earnings and share price is part of the reason I see the stock’s potential to double.

Now, the price is low and the trade is good. But I was also encouraged by winning a new contract for the supply Because access and drainage products “in several projects for airports and ports in Hong Kong, India, the Philippines and Singapore”.

Chief executive Paul Hooper said the win demonstrated the global reputation of Gatic products. And they underlined it “important” ongoing opportunities to deliver large international infrastructure projects.

If more wins increase future earnings, investors may bid up the price. And the reassessment by the market can together with earnings grow to double the stock price from where it is now. After all, re-rating for 12 times earnings doesn’t seem too big to me.

However, positive results are not guaranteed. The business may experience operational difficulties and may lose money on the stock.

However, if I had the money to invest now, I would dig deeper into this opportunity with a view to buying the shares that will take place when the operational progress is made in the coming months.