Introduction
Some of the top growth stocks have already made significant gains and still have a lot of room to grow.
Growth stocks that are highly geared to a positive market would profit the most as record low interest rates boost capital markets.
Despite the fact that growth companies have taken a battering recently as a result of inflation fears and a shift toward value stocks, this has provided an opportunity to buy some of the top growth stocks on the ASX for a bargain.
The Best Australian Shares To Buy 2021
The five top growth stocks to buy that we identified to have a sound business strategy with lots of upside potential and represent some of the best that the ASX has to offer are listed below.
South32 (ASX:S32)
South32 (ASX:S32) is a metals and mining firm located in Australia with activities in South America, South Africa, and Australia.
The company’s product line includes essential commodities for global decarbonization.
As a result, the company is ideally positioned to benefit from the global shift to renewables.
The company has announced plans to offload its thermal (energy) coal business in order to make its shares more appealing to ESG investors, one of the fastest-growing investment themes in the world.
Breville (ASX:BRG)
With its high-quality and tastefully designed appliances, the company has established a name for itself. Breville stock soared despite last year’s epidemic, as consumers were forced to stay at home. As more people began to cook at home, more appliances were ordered.
Unsurprisingly, the company’s financial performance during the last 12 months was exceptional.
The company intends to take advantage of the global shift in how we work by focusing on fast growth and global expansion.
Megaport (ASX:MP1)
Megaport is a NaaS (Network-as-a-Service) pioneer with a presence in 130 cities and 23 countries. With the introduction of COVID-19, cloud computing is becoming more common among those who work from home.
Indeed, according to studies and polls, up to 70% of firms expect between 5% and 20% of their personnel to work from home post-covid.
In the next four years, the NaaS sector alone is expected to develop at a 35 percent compound annual growth rate (CAGR).
Megaport has demonstrated that they have a quality and popular product to go along with their high revenue growth by attracting an all-star roster of customers and partners, including Adobe, BHP, Tesla, and Zoom.
Even if growth stocks have momentarily lost favour as investors shift their focus from high-growth to value stocks, companies like Megaport will gain in the long run from a structural shift in how we operate post-COVID. Megaport’s stock is now trading at a discount of roughly 22% to its high of $17.07, which could be a buying opportunity.
Healius (ASX HLS)
Healius is a healthcare services company that operates three divisions: pathology, imaging, and medical centres. Healius is well-positioned to benefit from the pathology sector’s growth, thanks to an ageing population and a burgeoning pathology business.
Even if the company has recently underperformed, COVID-19 might be blamed for a lot of it.
As the world begins to recover from the COVID-19 crisis, income should rebound sharply as a backlog of revenue is realised. Healius is a fantastic choice to obtain exposure to healthcare with more upside potential in place of the more expensive options, with an NTM EV/EBITDA value 10x cheaper than Cochlear (ASX COH) and 3.4x lower than CSL (ASX CSL).
MoneyMe (ASX:MME)
MoneyMe (ASX:MME) is a financial technology firm based in Australia that offers a variety of financing services. Because the pandemic drove an accelerated structural shift from offline to online transactions, the company’s AI-enabled procedures for rapid and safe loan approval led to tremendous growth.
The company has done a good job of distinguishing its products from those of other fintechs, and it also sells items in certain narrow but high-potential markets.
MoneyMe has a market capitalization of A$247 million at the current MME share price.
Despite the fact that the stock is down 19.2% from its pre-COVID price, the company has made tremendous progress in the last three quarters and is poised to make a slight profit in the first half of 2021.
We believe the MME share price has reached a turning point, and MoneyMe shares are a good investment. Bank of Queensland (ASX:BOQ) is one of the largest financial institutions in Australia.
Because of a combination of variables, the banking sector has been one of Australia’s best-performing industries in recent months.
Strong tailwinds include the reversal of COVID loan restrictions enacted last year, a thriving housing sector, and improved credit growth as the economy recovers from the pandemic.
Meanwhile, the spectres of the Royal Commission investigation into the sector appear to have faded, and the larger, supposedly “cash-strapped” banks, such as Commonwealth Bank of Australia (ASX: CBA), have begun to announce record buybacks and dividend distributions.
ME Bank was acquired by the Bank of Queensland (ASX:BOQ) earlier this year in a savvy move ostensibly to provide a viable alternative to the large banks.
Because of sector tailwinds and the bank’s own efforts to change its business, we believe the BOQ share price has significant upside potential.
Conclusion
Growth stocks are nearly exclusively driven by qualitative variables like first-mover advantage, asset quality and quantity, permits, and technology. Profit, income, and other quantitative metrics usually take second place.
When it comes to growth stocks, we are purchasing the storey and expected future potential, despite the fact that their financials must be sound. However, because enterprises are valued based on qualitative aspects, there is a lot of space for error, opinion, and subjectivity.
As a result, high-growth stocks are typically small-cap, high-risk, and speculative.
The capacity to absorb the information and elements at hand in order to make a strong judgement call is the most difficult component of selecting growth stocks.
Our research team has scanned the ASX for some of the top growing stocks on the Australian market.
