Picking the best stocks to buy now is hard, but if you dig hard enough, the ASX has a number of hidden gems that can provide strong growth for your portfolio.
With the correction towards the end of 2018, growth stocks have been hit hard and brought down some of the more ridiculous valuations investors have priced in. Even though the stocks have become cheaper, the narrative of the story hasn’t changed. This means with a correction comes opportunity.
Growth stocks are generally driven almost entirely by qualitative factors such as first mover advantage, quality and quantity of assets, permits and technology. Quantitative factors such as profit, revenue and so forth taking a back seat. Even though it is imperative that their financials are sound, when it comes to growth stocks, we are buying the story and perceived future value.
However, the very nature of valuing companies through qualitative factors means that there is a lot of room for error, opinion and subjectivity. This means that high growth stocks tend to be small-cap, high risk and highly speculative.
Research Is Key To Finding The Best Stocks To Buy Now
The hardest part when it comes to finding growth stocks is the ability to process the information and factors at hand to make a good judgement call. Our Research team specialises in this and has combed the ASX for some of the best growth stocks on the Australian market.
I’ve outlined 5 stocks that we have found to have a good business plan with lots of potential upside and represents some of the best that the ASX has to offer.
Pioneer Credit (ASX PNC) – Pioneer Credit Limited (ASX PNC) acquires and services unsecured retail debt portfolios that are more than 180 days overdue in terms of repayments and defaulted by those who have no default history before. PNC shares experienced four consecutive year’s growth in EPS and revenue since the company went public in 2014. There are no signs that this is slowing down, with FY18 half-yearly results showing an impressive +93% growth in NPAT and 57% growth in EPS.
Syrah Resources (ASX SYR) – Syrah Resources is dedicated to becoming the only major new supplier of graphite to battery market as China switches from an exporter to importer. Even though Syrah’s financial performance has been weak, their high-quality asset with the potential to supply the Chinese market gives them a lot of potential upside.
AVZ Minerals (AVZ) – AVZ Minerals Limited (ASX AVZ) is a mineral exploration company that acquires, develops, mines and produces lithium, tin, tantalum and other base metals. AVZ Minerals is a small cap, high risk play with Chinese backing leveraged to the growing lithium market. Even though they have no production yet, their Manono permit was recently confirmed to be the worlds No.1 lithium deposit in scale and No. 2 in grade.
PWH Holdings (PWH) – PWR Holdings Limited (ASX PWH) is an Australia-based company which produces world-class cooling solutions for motorsports and automotive industry. PWR Holdings has gone from strength to strength and continues to grow in a strong industry. With new technology developments, further partnerships with elite racing teams in a niche industry with low competition, we expect PWR Holdings shares to have strong upside in the future.
People Infrastructure Group (PPE) – People Infrastructure Ltd (ASX PPE), a workforce management company, provides contracted staffing and human resources outsourcing services in Australia and New Zealand. In FY18, its revenue increased 14% to A$219M, with pro forma EBITDA increased 30% to A$13M. With total employment and wage growth, casualization of workforce and strong growth from community sector in Australia, and its superior profitability reflected in its EBITDA and EPS, People Infrastructure shares are well positioned for long-term growth in its share price.
Make Your Money Work Harder For You
Picking the best stocks to buy now, timing the entry and having an edge in the market is not easy. Our goal at MF & Co. is to make this process more accessible and easier for our clients. Download our special report below for another 5 best shares to buy now which comes with a special strategy that we use for our clients to make your money work harder for you.
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Henry is a co-founder of MF & Co. Asset Management with over 12 years experience as a trader, investor and asset manager. Henry’s focus is on High Net Worth Wealth Management and using algorithmic quantitative trading systems to invest for his clients. Henry also trains new Interns and Advisers on trading and risk management.