These ASX Stocks Have Huge Growth Potential In May 2021

Summary

  • Growth stocks continue to be investor favourites due to offering quick returns round the year.
  • Often technology and healthcare stocks make up for most growth stocks in the market.
  • Five upcoming growth stocks for the month of May include: Altium Ltd., Volpara Health Technologies Ltd., Breville Group Ltd., Pro Medicus Ltd., and IDP Education Ltd.

Growth stocks are investor favourites round the year. These companies hold the capacity to grow at a much faster rate than their competitors. Often tech companies make a mark in the growth stock category due to the unique nature of their products.

Many companies have surprised investors over the past one year with high levels of growth. Here are a few growth stocks to start the month of May:

Altium Limited (ASX: ALU)

Altium is engaged in the production and sale of computer software, used in designing products like circuit boards. A long-term player, Altium has been a tech stock eyed by investors for its constant efforts to diversify the sector with new inventions. One such latest upgrade by the business is Altium 365.

Altium 365 is a cloud-based tool, allowing different users to collaborate on a project and is touted by the company as the gateway to its future growth. The company has been reinvesting its profits to develop high-tech services.

The company’s financial performance remained lukewarm as it reported a 15% drop in its EBITDA for 1H21. This is contrary to the firm’s performance over previous years and is a clear indication of the effect of the coronavirus pandemic on the company. The firm has started to show signs of recovery as over the previous month, Altium’s share prices have increased by almost 15%. Many investors consider Altium to be a high-quality value stock.

Volpara Health Technologies Ltd (ASX: VHT)

The technology software company is a New Zealand-based firm engaged in providing an integrated breast care platform to deliver personalised care. Volpara recently announced its results for the fourth quarter of 2021, which includes some record high results for the firm.

The cash income from the customer receipts amounted to NZD 5.4 million, which is a 15% increase over the fourth quarter of 2020. Also, the subscription-based receipts during the period saw an increase of 39%, bringing in NZD 18.3 million. However, the EBITDA for the period recorded a loss of NZD 3.4 million.

This majorly positive result reflected in the company’s share price, which rose by almost 6% post the announcement. The company also gained another patent in the US, protecting the unique features of the VoltaraEnterprise and VoltaraLive! software. This was an international patent that the company was granted making it a high-quality stock for investors to dive into.

IN CASE YOU MISSED: Volpara (ASX:VHT) shares inch higher on positive DENSE trial results

Breville Group Ltd. (ASX: BRG)

The home appliances manufacturer has seen an expansion into international territories over the previous years. Additionally, with people developing an office space inside their homes due to the pandemic, the company has seen an uptick in the sale of its home appliances over the previous year as well.

Breville’s revenue for 1H21 was AUD 711 million, which was an increase of almost 30% over the previous corresponding period. The EBITDA for the period was higher by 32% at AUD 112.4 million. The company added that Global Product segment revenue also grew by 34% to AUD 592.9 million. This was an increase of a massive AUD 150 million during the half-year period.

The stock market performance over the last 6 months has complemented these financial results. The company’s share price increased from AUD 25.48 per share in November 2020 to AUD 26.640 per share at the time of writing. The company is still engaged in the production of new products and could potentially gain further in the coming months owing to increased work from home conditions.

Pro Medicus Ltd (ASX: PME)

Healthcare technology firms have experienced an eventful 2020 and have been continually providing their expertise in the current year as well. Pro Medicus is a health imaging technology provider, working in the radiology services space, imaging centers, and health care groups internationally.

The company’s Visage technology delivers fast multi-dimensional images streamed via a thin-client viewer. The leading healthcare firm used its tech prowess to deliver profitable interim results for 2021. The first half of FY21 saw a revenue uptick of 7.8% to reach a value of AUD 31.59 million. The underlying profit before tax for the company was AUD 13.54 million, an increase of 12.4%. Pro Medicus reported these results without availing any Jobkeeper benefits during the period.

The company also ventured into various new contracts with US-based healthcare operations in the previous 4 months. Only a small proportion of profit has been released from these contracts and the revenue is expected to seep into the coming months as well.

IDP Education Ltd. (ASX: IEL)

The only educational institution on the list, IDP Education, has been a provider of international student placement and English language testing services. The company’s share prices have increased by 15% over the last 6 months. IDP is currently trading at AUD 22.97 per share.

However, the company has not exactly had a bump-free ride over the last one year during the pandemic. Signs of recovery are visible as the economy is starting to open. For the 6 months to 31st December 2020, the total revenue reported by the company was AUD 269 million, which was a decrease of 29% over the same period in 2019. However, a cash balance of AUD 293 million demonstrated that the company had maintained sufficient liquidity throughout the pandemic.

RELATED READ: How was 1H FY2021 for IDP Education Limited (ASX:IEL)?

Despite the uncertainty, the company remains positioned for growth owing to its strong financial position and growing software business.

Some of the other growth stocks to watch out for are: Afterpay Ltd. (ASX: APT), Redbubble Ltd. (ASX: RBL), Zip Co Ltd. (ASX: Z1P) and Appen Ltd. (ASX:APX).


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