Why Investors are investing in Growth Stocks
A growth stock can be defined as a share of a company that has above average revenue and earnings growth rates and has the potential to grow faster than the economy. Growth stock price increases more quickly as compared to other types of stocks; the investor may have to pay more for acquiring each share based on the company’s earnings. If the price of stock increases, the investor can claim that value in the form of capital gain at the time of selling the stock.
Investors are ready to pay more for these type of stocks because of the increasing returns. The level of risk is also more in case of growth stocks. While investing in the growth stocks, one must assess the level of risk with the expectation of capturing exceptional returns.
Few Traits of Growth Stocks
- Expanding Market Opportunity
- Competitive Advantage
- Strong Price Appreciation
- Great Corporate Culture
- Talented Leadership
Let us have a look at six growth stocks and their recent updates.
EML Payments Limited (ASX: EML)
EML Payments Limited is a provider of payment solutions. The company provides funded card programs and prepaid disbursement services. The company provides its services in Australia, North America, United Kingdom and throughout Europe.
Completion of Retail Entitlement Offer
On 4 December 2019, the company reported the conclusion of the retail component of its fully underwritten one for five speeded up pro-rata non-renounceable offer.
Under the offer, around twenty-six million of the company’s shares would be issued at a price of $3.55 per share to raise nearly $93 million. The eligible retail shareholders extended a strong support to the offer, with valid applications received worth nearly $64 million.
Stock Performance of EML Payment Limited
The stock of EML closed at $4.630 on ASX on 3 January 2020, up 0.652 per cent from its previous close. The company has approximately 325.42 million outstanding shares and a market cap of $1.5 billion. The stock has generated a positive return of 61.14 per cent in the last six months and a negative return of 2.75 per cent on a year-to-date basis.
Tyro Payments Limited (ASX: TYR)
Tyro Payments Limited provides payment solutions and value-adding business banking products. The company develops solutions for acquiring merchants and provides complementary business banking products as well.
Periodic Disclosure Report
On 23 December 2019, the company has announced the periodic disclosure report for the period ended 30 June 2019.
- Cash and cash equivalents of the company stood at $23.9 million.
- The total assets of the TYR were $148.6 million.
- Total Liabilities of the Tyro Payments Ltd were $55.6 million.
- The total reserves and total equity of the company were $17.4 million and $93.0 million, respectively.
Stock Performance of Tyro Payments Limited
The stock of TYR closed at $3.560 on ASX on 3 January 2020, up by 1.714 per cent from its previous close. The company has approximately. 496.65 million outstanding shares and a market cap of $1.74 billion.
oOh!media Limited (ASX: OML) has a wide network of more than 37,000 locations across New Zealand & Australia and operates as a media company.
Underlying EBITDA expected to remain in between $138-143m forecast range
On 3 December 2019, the company announced the expected earnings for the year ended 31 December 2019. The company has enhanced its guidance for FY 2019 Underlying EBITDA to $138 million to $143 million, excluding integration costs and the impact of AASB16 from the earlier guidance of $125 million - $135 million.
OML expects growth in operational expenditure in FY 2019 to be in the range of 5-7 per cent. The company’s capital expenditure for FY19 is estimated to be in the mid to lower end of $55 million -$70 million range.
Stock Performance of oOh!media Limited
The stock of OML closed at $3.800 on ASX on 3 January 2020, up by 1.064 per cent from its previous close. The company has approximately. 242.39 million outstanding shares and a market cap of $911.37 million. The stock has generated a negative return of 4.81 per cent in the last six months and a positive return of 0.27 per cent on year to date basis.
Nearmap Ltd (ASX: NEA)
Nearmap Ltd, founded in 2007, is a location intelligence company. The company captures details of wide-scale urban areas in New Zealand, Canada and the United States.
Nearmap announces acquisition of Roof Geometry Technology
On 12 December 2019, the company has announced the acquisition of technology and intellectual property from Primitive LLC. The technology allows the company to quickly extract and distribute roof geometry insights from a broad scale 3D content.
The company’s Managing Director and Chief Executive Officer (CEO) commented:
The US$3.5 million asset acquisition is aimed at increasing growth opportunities via selective and targeted acquisitions.
The new Roof Geometry Technology will help the company to provide the semi-automated calculation and representation of any roof geometry within an hour. The technology helps the company to significantly reduce the turnaround time.
Stock Performance of Nearmap Ltd
The stock of NEA closed at $2.520 on ASX on 3 January 2020 up by 0.398 per cent from its previous close. The company has approximately 452.46 million outstanding shares and a market cap of $1.14 billion. The stock has generated a negative return of 34.12 per cent in the last six months and a negative return of 4.56 per cent on year to date basis.
Carsales.com Limited (ASX: CAR)
Carsales.com Limited is the locally owned public company deriving its revenue from online, motorcycle, automotive, and marine classifieds business in Australia. Carsales.com employs approximately 800 people in Australia.
Carsales.com Announces Organisational Structure Changes
On 2 December 2019, the company has announced the key organisational structure changes to recognise the increasingly global mindset of the business. The company has appointed Mr Ajay Bhatia as a Managing Director. Mr Bhatia is responsible for all of Carsales’ Australian operations including Media, Consumer, Dealer and Original equipment manufacturer (OEM) segments.
He has over eleven years of experience, with eight years as the Chief Information and Product Officer, and the last three years as the Managing Director of the Consumer business.
The company also informed that Simon Ryan, Managing Director, Commercial will step down from his position and leave the company in December 2019.
Stock Performance of Carsales.com Limited
The stock of CAR closed at $16.870 on ASX on 3 January 2020, up by 0.476 per cent from its previous close. The company has approximately. 245.25 million outstanding shares and a market cap of $4.12 billion. The stock has generated a positive return of 20.97 per cent in the last six months and a negative return of 2.95 per cent on year to date basis.
Bubs Australia Limited (ASX: BUB)
Bubs Australia Limited is the leading producer of the goat-milk products. The company’s product includes Organic Apple Porridge, baby Pouches, Snacks, Rusks and Organic Oats.
Completion of Share Purchase Plan
On 30 December 2019, the company has announced that it has successfully completed the share purchase plan (SPP) announced to ASX on 20 December 2019. The share purchase plan received applications for amounts in excess of $17.4 million. The plan was offered at $0.95 per share to the company’s existing shareholders. The SPP’s success shows strong support from the company’s existing shareholders.
The proceeds from share purchase Plan would be used to speed up growth opportunities across the strategic growth pillars of the company.
Stock Performance of Bubs Australia Limited
The stock of BUB closed at $0.975 on ASX on 3 January 2020, up by 1.036 per cent from its previous close. The company has approximately 560.3 million outstanding shares and a market cap of $540.68 million. The stock has generated a negative return of 17.87 per cent in the last six months and a negative return of 3.02 per cent on year to date basis
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