1 FTSE growth stock to buy and hold

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One FTSE growth stock I like the look of is CVS Group (LSE:CVSG). Here’s why I would add the shares to my holdings for the long term.

Growth market

Pet ownership and pet care is a huge growth market. According to the Pet Food Manufacturers Association, it is estimated that 59% of households in the UK have pets as of 2021. In 2020, consumers spent nearly £8bn on pets and related products in the UK alone, according to data compiled by Statista.

CVS Group is one of the largest veterinary services providers in the UK. CVS has over 500 practices supported by more than 1,900 vets and 2,500 nurses. Owning a pet is a wonderful thing in my opinion. Much like us, our pets need food, water, exercise, accessories, and healthcare. 

As I write, CVS shares are trading for 2,000p. This is up from 1,446p at this time last year, which is a 38% return over 12 months.

Why I like CVS Group

CVS’ recent and historic performance has been excellent. I do understand past performance is not a guarantee of the future; however, I use it as a gauge. In November, CVS provided a trading update for the start of its new fiscal year. Total sales grew by nearly 14% in the four month period to 31 October 2021 compared to the same period last year. Positive cash generation and further investment in facilities has also been a priority. Looking at past performance, I can see total revenue and gross income have increased year on year for the past four years.

With the rising number of pets in the UK, I actually see CVS shares as defensive. The need for veterinary services and animal consumer goods are essential for pets. There’s no such thing as free healthcare for pets, unlike for humans who can rely on free healthcare in the UK provided by the NHS. 

Finally, I can see insiders own shares of CVS Group. I am usually buoyed when insiders own shares of a firm I am reviewing for investment viability. This is for two reasons. Firstly, insiders could sell shares for any number of reasons but they would only buy them for one reason – they believe the shares will rise. Second, who better to know if a company is heading for success than those who run it?

FTSE stocks have risks

Despite my bullish attitude towards CVS Group, I must note two risks associated with buying the shares. Firstly, like most growth markets, there are many firms vying for market share and looking to get ahead of the competition. One competitor that springs to mind is Pets at Home Group. Competition can affect performance and shareholder returns. Secondly, there is a concern about the lack of availability of vets in the UK, which could affect operations and in turn performance and returns too.

Overall, I like CVS Group and would buy the shares for my holdings and keep them for the long term. Performance has been positive for some time and seems to be continuing on an upward trajectory. In addition to this, the market as a whole is growing in line with increased pet ownership, which bodes well for CVS as a FTSE growth stock for my portfolio.

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Jabran Khan has no position in any of the shares mentioned. 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.