Today, we’ll look at the top 5 stocks listed on the ASX that we think have strong growth potential.
Some of these stocks have already made strong gains and have a lot more upside potential to go.
With record low interest rates boosting capital markets, growth stocks which are highly leveraged to a bullish market will benefit most.
The Best Growth Stocks To Buy Now For 2020
We’ve outlined 5 stocks 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.
Kalium Lakes (ASX KLL)
Kalium Lakes manufactures sulphate of potash (SOP), a product used as fertilizer.
Australia consumes about 40,000 tonnes of SOP per year, yet, there are no companies in Australia producing SOP.
Once Kalium Lakes completes its Beyondie Potash Project in Western Australia early next year (2020), they will become the first in Australia to produce SOP.
In addition, KLL’s Beyondie project is the only company to have completed a Bankable Feasibility Study, which confirms the project is technically and financially robust.
This gives them a significant first-mover advantage.
EML Payments (ASX EML)
EML Payments is a financial services company offering payment services such as gift and reward cards.
They have seen strong growth in the EML share price on the back of record YoY growth in revenue and earnings.
We first became interested in this stock and recommending it to our clients in late August 2019 when the stock was trading at around $3.60.
Since then, the stock has rallied to over $4.40, or 22% higher in about two months time.
We think that EML payments continue to have good potential and this is why we like EML.
Volpara Health Technologies (ASX VHT)
Volpara Health Technologies Ltd (ASX VHT) is a New Zealand-based healthcare research, and development company with global scalability.
The company provides medical software, specialising in managing breast screening and detection.
Their software automates the flow of information between the doctor and the clinic taking the screening mammogram x-ray.
In fact, VHT shares were a stock we got our clients into during September 2018, when the VHT share price was at around $0.80.
The VHT share price last traded at about $1.70, a good 110% gain in just a few months.
Appen (ASX APX)
Appen (ASX APX) is a global leader in developing high-quality, human-annotated datasets for machine learning and artificial intelligence.
With over 20 years’ experience, expertise in more than 180 languages, and access to a crowd of over 1 million people, Appen partners with leading technology companies and government agencies to enhance their machine-learning-based products.
Over the last three years, Appen shares outperformed S&P/ASX 200 Information Technology Sector Index and S&P 500 Information Technology Index by over 750%.
APX reported average revenue growth of 40% FY15-17, and revenue grew more than 100% in FY18.
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.
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.
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.
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.
Are you still looking for the best stocks to buy in 2020? We've put together a free report on 5 stocks that we think are the best buys on the ASX right now. Download it instantly here.
This is general advice only. MF & Co Asset Management has not considered your personal financial needs, objectives or current situation. This information is not an offer, solicitation, or a recommendation for any financial product unless expressly stated. You should seek professional investment advice before making any investment decision.