- A growth stock belongs to a company which delivers substantial and sustainable positive cash flow compared to the average company within the same industry.
- In addition, revenues and earnings of growth stocks are expected to grow at a faster rate than their peers in the industry.
- Here we look at five growth stocks that were in news recently due to some positive developments around them.
A growth stock belongs to a company which delivers substantial and sustainable positive cash flow compared to an average company within the same industry. In addition, revenues and earnings of growth stocks are expected to grow at a faster rate than their peers in the industry.
Investors are generally highly attracted to growth stocks since these can deliver relatively large gains within a short span. Shares belonging to technology and innovation-oriented firms are usually considered as top growth stocks. There are several ASX-listed growth stocks that have offered returns much higher than their peers so far this year.
Here are five growth stocks that were in news recently due to some positive developments around them and can be included in the portfolio before the year ends.
ELMO Software Ltd (ASX:ELMO)
The HR and payroll platform provider has reported strong growth in past few years, including the COVID-19 pandemic time and even during the pandemic. The platform enables businesses to simplify and streamline a wide range of tasks. Strong recurring revenue growth is due to robust demand from users.
ASX Growth Stocks to look at before 2021 ends
In FY 2021, the annualised recurring revenue (ARR) jumped 52.1% to AU$83.8 million. The company expects to grow faster in FY 2022. The company’s management has an annual recurring revenue (ARR) guidance of AU$105 million to AU$111 million.
Sonic Healthcare Ltd (ASX:SHL)
The pathology healthcare company has operations in Australia, New Zealand, North America, and Europe. The company has done around 30 million COVID-19 tests so far. COVID-19 PCR test volumes have increased again with the spread of the Delta variant.
The company has also emerged as Australia’s largest non-government COVID-19 vaccination provider. Sonic also reported strong financial results in FY21.
- Revenue grew 28% to AU$8.8 billion.
- Earnings before interest, tax, depreciation and amortisation (EBITDA) surged 81% to AU$2.6 billion.
- Net profit after tax (NPAT) soared 149% to AU$1.3 billion.
Source: © Robynmac | Megapixl.com
Papyrus Australia Ltd (ASX:PPY)
Papyrus Australia is an agricultural waste fibre technology company. The company converts banana palm’s waste trunk and plantain into alternatives to forest wood products. The company reported strong financial results in its FY21 preliminary annual report.
- The revenue from the ordinary activities rose 8% to AU$257,027 for the year ended on 30 June 2020.
- The loss from ordinary activities after tax attributable to the members was AU$138,195, up 3% from the prior year.
- Net tangible assets per security were 0.97 Australian cents.
Amcor CDI (ASX:AMC)
Amcor PLC is a packaging company.
The company performed on a strong note in FY21. While net sales increased by 3% to AU$12.86 billion, adjusted earnings before interest and tax (EBIT) rose 8% to AU$1.6 billion. The adjusted net income rose 13% to AU$1.16 billion.
In FY22, the company expects an adjusted free cashflow to be between AU$1.1 billion and AU$1.2 billion. FY21 free cashflow would be AU$1.1 billion.
Resapp Health Limited (ASX:RAP)
The company is engaged in digital healthcare solutions to assist doctors and patients to diagnose and manage respiratory disease.
In the period ended on 30 June 2021, the company completed AU$5.5 million capital raise to boost its product development opportunities.
The healthcare provider also inked a commercial deal with an Australian telehealth company - Doctors On Demand, to launch its ResAppDx. In addition, telehealth provider – Medgate AG extended the pilot trial of ResAppDx across its market in Switzerland.
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