Today, we’ll look at the best Australian shares to buy on the ASX in 2021 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.
With record low interest rates boosting capital markets, growth stocks that are highly leveraged to a bullish market will benefit most.
Even though growth stocks have taken a beating recently due to inflation fears and rotation into value stocks, this has presented an opportunity to grab some of the best growth stocks on the ASX for cheap.
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.
Nitro Software (ASX:NTO)
Nitro Software Limited (ASX:NTO) is a global leader in document productivity software and digital transformation.
Its offerings are relevant in a world that has pivoted to work-from-anywhere, anytime, and on any device.
The company’s Nitro Productivity Platform is a solution to legacy document procedures that are a handicap in such a dynamic environment.
Nitro is changing its revenue and product offerings models by transiting to SaaS-based offerings available off a productivity platform.
Ramsay Health Care (ASX:RHC)
Ramsay Health Care (ASX:RHC) is one of the world’s largest private hospital chains.
The company has been of interest to the markets due to the spike in the number of hospital patients resulting from the pandemic.
Its recently released full-year FY21 results impressed with record performance, despite lost revenue from elective surgeries, which have higher margins than COVID-related services.
Data from the company shows significant pent-up demand existing for elective surgical and non-surgical patients due to lockdowns, the focusing of resources on COVID, and general public aversion of hospitals.
Pilbara Minerals (ASX:PLS)
Pilbara Minerals Ltd (ASX:PLS) is one of Australia’s biggest listed pure-play lithium mining players.
The company has lately been in the limelight due to the solid rally in its stock and its recent acquisition of Altura Mining for $175M.
The deal is a good fit for Pilbara Minerals because Altura’s Pilgangoora mine is adjacently located, making the acquisition easy to integrate and generate economies of scale.
Pilbara Minerals was also recently inducted into the ASX200, Australia’s flagship index.
The company’s stock has been having a great run being front-and-centre of the decarbonization megatrend, a thematic investor favourite.
Magnis Energy Technologies (ASX:MNS)
Magnis Energy Technologies (ASX:MNS) is an Australian company involved in the development of cheap and nearly 100% recyclable batteries that address the global decarbonization megatrend.
Magnis Energy Technologies is developing its product through strategic partnerships to garner expertise in various segments of the battery value chain.
Its proprietary battery is claimed to outperform current technologies while being cheaper and environmentally friendlier.
The company also has great verticals, with an investment in a high-quality long-life mine.
PointsBet Holdings (ASX:PBH)
PointsBet Holdings (ASX:PBH) is an online gaming operator whose business spans Australia and the Americas.
The pandemic spurred betting across the globe, but in the US, legal gambling has taken off and is in the midst of a historic expansion in activity.
The virus has sparked an unprecedented spike in online gambling and sports betting, in all their avatars, because casinos shut down and people were locked down inside their homes.
PointsBet has benefited from these market dynamics as apparent from its FY21 numbers.
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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