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.
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.
Afterpay (ASX APT) – Afterpay Touch Group Limited (ASX APT) is an emerging payment company with huge potential in Australia. The group has shown strong growth over the past year and has substantial opportunities in the U.S market, which reflects a positive market expectation for future performance for the company. The company has grown over the past twelve months with revenue jumping by 1535% from $1.4 million in 2016 to $22.9 million in 2017 mainly due to a considerable rise in the number of merchants who have recently adopted the late payment method. There has been a significant increase in the number of customers with over 80% of monthly transactions made by loyal customers.
Galaxy Resources (ASX GXY) – Galaxy Resources shares (ASX GXY) is a leading lithium miner in Australia owning 100% of Mt Cattlin mine in West Australia, Sal De Vida in Argentina and James Bay in Canada. ASX GXY shares own mines, which are cash flow generated and have abundant high-quality lithium assets. The surging demand for both EV and ES will see lithium as a resource that will see immense growth in the future.
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.
A2 Milk (ASX A2M) – A2 Milk commercialises the a2 protein intellectual property and produces milk and related products like infant formula. A2M shares are poised for strong growth with high interest from Chinese consumers and have seen year on year double digit growth.
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.
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.
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.