Today, we’ll look at the best Australian shares to buy on the ASX in 2023 that we think are the best growth stocks.
Some of these best growth stocks have already made strong gains and have a lot more upside potential to go.
Table of Contents
We’ve outlined the 5 best growth stocks to buy that we have found to have a good business plan with lots of upside potential and represents some of the best that the ASX has to offer.
Corporate Travel Management (ASX:CTD)
Corporate Travel Management (ASX:CTD) is a travel services provider based in Australia with operations across the globe.
After being one of the worst-hit sectors during the COVID pandemic, the sector is finally showing a strong rebound after a couple of false starts through 2021 and 2022.
The company is well-placed to capitalize on demand surpassing pre-COVID levels with excess capacity on hand to meet demand and synergies from acquisitions on the cusp of kicking in.
Corporate Travel Management (CTM) is a travel services company that provides corporates with a bouquet of travel services such as travel/itinerary planning, event travel planning, etc.
The company’s operations are spread out over North America, Europe, Asia Pacific regions, and ANZ.
CTM is a very technology focussed company that provides bespoke travel software that gives them access to global locations with transparent pricing, planning, and capacity availability along with other metrics.
Pro Medicus (ASX:PME)
Pro Medicus is a health tech software company that provides imaging tools/services to an array of clients such as hospital/diagnostics chains and independent practices.
The company got a serious shot in the arm due to the logistical disruption caused by the COVID-19 pandemic and a growing decline in radiology professionals.
While the former gave the company a shot in the arm, the secular tailwind is a global shortage of radiologists and increasingly complex testing data which can run into several gigabytes from a single test.
Pro Medicus’ revolutionary technology allows the easy sharing of huge datasets and brings scale to radiology diagnostics.
Pilbara Minerals (ASX:PLS)
Pilbara Minerals Ltd (ASX: PLS) is one of the largest pure-play lithium producers with roughly 8% of global production. After a fabulous acquisition of Altura Mining, the company currently owns one of the best operational lithium assets globally at Pilgangoora. Since the acquisition, the company has largely focussed on execution, expansion, and capturing more of the value chain. Recent financial performance has been stellar, showcasing the company’s frugal cost structure and opening of global markets for spodumene. Investors were also awarded an inaugural dividend in 1H’23.
The lithium market has been budding with activity, showing clear signs that the global economy and major corporations are betting big on its prospects. Chile recently nationalized lithium assets, Allkem and Livent entered a merger to become a major player in the sector while Albemarle failed to secure Liontown Resources despite a multi-billion dollar bid. Major carmakers are upping the ante with LG, Ford, and BMW announcing major battery production facilities while GM invested $650M in Lithium Americas.
Fortescue Metals (ASX:FMG)
Fortescue Metals Group is a pure-play iron ore producer with the fourth-largest capacity in the world. The company is also morphing into a leader in mining decarbonisation and green hydrogen through its Fortescue Future Industries subsidiary. FMG hit a rough patch after China’s property sector landed in a debt crisis and iron ore prices slumped from their 2021 highs.
Despite depressed prices and slowing demand from China’s zero-Covid policy, FMG continued record production and despatch in the nine months ended March 2023.
The stock has faced selling pressure after the latest quarterly update with investors fearing a further decline in iron ore prices.
Allkem (ASX:AKE) is Argentina’s largest pure-play lithium miner with a global portfolio of lithium ore and processing assets.
The company has benefited significantly from the recent lithium bull run amidst the burgeoning demand for battery metal.
The company reported bumper results recently for 1H23 with multifold profit growth driven mainly by a price surge of its product.
The company, however, is on the cusp of multiplying the scale of its business substantially as new assets come online over the next couple of years.
How Do We Find Growth Stocks To Buy?
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 generally take 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.
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.
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