Eye-catching Growth Shares – A2M, WTC, XRO, QAN, BIN

  • Nov 17, 2019 AEDT
  • Team Kalkine
Eye-catching Growth Shares – A2M, WTC, XRO, QAN, BIN

Successful investment is subject to the choice of right asset classes. When it comes to investment in the stock market, an investor interacts with a range of assets, such as equities, bonds, debentures etc. In equities, investor confuse between adopting growth shares or values shares. In the below article, we will be looking at some ASX-Listed growth shares. The growth shares generally refer to those companies which do not focus on providing any dividend as they reinvest their profits into their businesses in order to generate long-term values for their shareholders.

Investors can earn profits only by selling their stock holdings. The companies which work every day on innovating have the potential to become growth shares. Let’s have a look at five eye-catching growth stocks listed on the Australian Stock Exchange:

The A2 Milk Company Limited

The A2 Milk Company Limited (ASX: A2M) is engaged in the sale of branded products in targeted markets. These are made with milk from cows producing milk naturally containing only the A2 protein type.

Key Takeaways from Investor Presentation

  • The company recently published an investor presentation, wherein, it communicated that its marketing investment is focused on building awareness and conversion.
  • It added that different marketing approaches are tailored in order to cater to distinct steps in the consumer’s path to purchase.
  • The primary focus of the company is to drive growth in brand awareness- considering its relatively high loyalty this is demonstrated to deliver ROI over time.
  • A2M’s key ingredients for the continuing success of its business revolves around focus- on core markets as well as existing products- first, new products- second, new markets- third, accelerating investment, adaptability and preservation.

Launch of New Employee Share Plans

  • The company through a release dated 21st October 2019 announced that it has issued ordinary shares to certain employees under two recently established employee equity programs, which include Gift Offer and Share Match Program.
  • Under the gift offer, the company has issued ordinary shares of the company worth around A$500 to eligible employees, not participating in the LTI Plan including part-time and full-time employees in New Zealand, USA and Australia.
  • Under the share match program, the eligible employees have been invited to utilize their own funds in order to acquire up to A$2,000 worth of shares in A2M.

The stock of A2M were placed at $12.000 per share on 14th November 2019. A2M has a market capitalization of $8.55 billion and total outstanding shares of the company stood at 735.38 million. The stock has given a total return of -23.45% and -21.65% in the time period of 3 months and 6 months, respectively.

WiseTech Global Limited

WiseTech Global Limited (ASX: WTC) provides software solutions globally to the logistics industry. The market capitalization of the company stood at A$ 9.11 Bn as on 14th November 2019.

Response to Misinformation in Market Report

  • Recently, the company through a release dated 23rd October 2019 responded towards the release of a second short-seller report published by J Capital Research Limited. The company outlined in the release that the many claims contained in the report were wrong.
  • WTC refutes the claims of financial impropriety as well as irregularity as implied in the report. It added that the report was published without prior inquiry to the company. The publisher of the Report discloses that it might realize significant gains from a fall in share price of the company.

A Look Back at FY19

The key personnel of the company stated that WTC continued to deliver high quality growth in FY19. Revenues of the company amounted to $348.3 million with a rise of 57%. EBITDA experienced an increase of 39% and the figure stood at $108.1 million. This is a pay-off of the company’s strategy to accelerate the company’s global growth and industry penetration.

The stock of WTC was placed at $28.630 per share on 14th November 2019 with a market capitalization of $9.11 billion. The total outstanding shares of the company stood at 318.19 million. The stock has provided a total return of 0.93% and 29.52% in the time period of 3 months and 6 months, respectively

Xero Limited

Xero Limited (ASX: XRO) provides an online business platform to small businesses and their advisors.

Decent growth in 1H FY20

  • Recently, the company reported its results for the half-year ended 30th September 2019 with strong topline growth in combination with improving gross margin as well as free cash flow.
  • It reported operating revenue amounting to NZ$338.7 million, reflecting a rise of 32% year over year. XRO achieved a significant landmark in the 1H FY20, exceeding two million subscribers located worldwide, to conclude the period with subscribers of 2.057 million.
  • The key personnel of the company stated that it has continued to show good results in 1H FY 20 with strong topline growth and improving financial parameters.
  • XRO is pursuing action to decrease its emissions footprint and would offset 100% of its carbon emissions throughout all areas of the business for the year to 31 March 2019 and going forward, as part of its social and environmental impact program.

The stock of XRO closed the day’s trading at $77.650 per share on 14th November 2019. The stock has given a total return of 25.03% and 42.23% in the time period of 3 months and 6 months, respectively

Qantas Airways Limited

Qantas Airways Limited (ASX: QAN) is primarily involved in operation of international and domestic air transportation services. Recently, the company announced that Pendal Group Limited, a substantial shareholder, has made a change to their holdings in QAN on 4th November 2019 and the current voting power stands at 5.22% as compared to the previous voting power of 6.57%.

A decent welcome to FY20

The company through a release dated 24th October 2019 updated the market with its results for first quarter of financial year 2020 and outlined the following:

  • The group experienced a growth of 1.8% in revenue and the figure stood at record $4.56 billion against $4.49 billion in the prior corresponding period (pcp). Moreover, it witnessed a rise of 2.1% in unit revenue in comparison to the pcp.
  • However, the total group capacity witnessed a fall of 0.2%. This resulted from a decline of 0.6% for Group International while Group Domestic rose by 0.5% mainly due to growth in the resources market.
  • The capacity of group is anticipated to increase in the range of 0.5% to 1.0% in the 1H FY20, with increases in domestic and international flying.

The stock of QAN closed the day’s trading at $6.850 per share on 14th November 2019. The stock has provided a total return of 17.29% and 28.52% in the time period of 3 months and 6 months, respectively.

BINGO Industries Limited

BINGO Industries Limited (ASX: BIN) provides recycling and waste management solutions throughout building and demolition as well as commercial and industrial waste streams.

Chairman’s Address to Shareholders

  • At 2019 Annual General Meeting, the Chairman of the company addressed the shareholders and stated that Financial year 2019 has been a year full of transition, wherein, successful acquisition of DADI (Dial a Dump Industries) was wrapped up in March 2019. In addition, this has materially changed the business as well as established a platform for its ongoing growth in New South Wales.
  • During the year, organic growth of its Commercial and Industrial division was a major focus for BINGO. It implemented important changes to grow this part of its business and anticipates the Commercial and Industrial waste stream to comprise a greater proportion of its business in future.

Market Update for FY20

  • The company stated that the integration of DADI is going well with cost synergies amounting to $15 million to be realized equally in coming two years. The integration of DADI is anticipated to be wrapped by June 2020.
  • For Financial year ending 30 June 2020, it anticipates reporting of underlying EDITDA in the ambit of $159 million - $164 million.
  • BIN anticipates achieving robust YoY growth in FY20 supported by a full year contribution from DADI, Landfill, West Melbourne Recycling Centre and Patons Lane Recycling Centre.

The stock of BIN closed the day’s trading at $2.820 per share on 14th November 2019. The stock has given a total return of 8.46% and 53.68% in the time period of 3 months and 6 months, respectively.


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