- Stocks with a substantially greater growth rate than the market average with huge development potential are known as growth stocks.
- Growth stocks may help investors build wealth by generating capital gains.
- Growth firms make money by gaining a big market edge using risky business tactics.
Growth stocks are firms that generate significant and long-term positive earnings at a significantly faster rate than the average firm in the same industry. In terms of releasing new products, services, pursuing foreign expansion, and extending a business model, a growth firm has a reasonable edge over its competitors.
Image Source: Copyright © 2021 Kalkine Media
However, before investing in a company's shares, investors should analyse its fundamentals.
Let’s have a look at the performance of these 4 NZX growth stocks.
The Colonial Motor Company Limited (NZX:CMO)
Colonial Motor Company's revenue increased by 4.6% on a year-over-year basis for the 6 months ended December 31, 2020, with the majority of the rise occurring in December 2020. The Chairman, Jim Gibbons, indicated that the new car demand for the entire 2020 was down 22% from the previous year, but that concealed a better second half.
CMO issued a 15cps interim dividend.
Graeme Gibbons would be retiring as the CEO of the company on 30 September 2021. Alex Gibbons will be appointed the new Chief Executive Officer, commencing on 1 October 2021.
CMO’s shares have returned 34.03% in the past 1 year and were trading at $9.15 on 4 June, at the time of writing, up by 0.55%.
Metro Performance Glass Limited (NZX:MPG)
Metro Performance Glass Limited, one of New Zealand's largest glass suppliers, delivered a strong FY21 with a resilient performance despite its operations getting affected by the COVID-19 pandemic. The company registered the sales of NZ$179.8 million and EBIT of NZ$19.4 million. MPG significantly improved performance in Australia.
The Company has significantly decreased its indebtedness by 28%, therefore improving its financial situation as the year draws to a close. The Group has plans to resume its dividends when it releases interim results for FY22.
MPG shares have returned 142.23% in the past 1 year and were trading at $0.43 on 4 June, at the time of writing, up by 2.38%.
NZME Limited (NZX:NZM)
Despite the difficulties and interruption caused by the COVID-19 pandemic, NZME achieved a statutory NPAT of $14.2 million and an Operating EBITDA of $67.3 million.
The business anticipates profit growth in 2021, based on continuing revenue recovery and the lasting cost savings achieved in 2020.
NZM plans to focus on digital transformation and deliver on set targets. The Group’s strategic priority is to be New Zealand’s leading audio company with publishing strategy of creating New Zealand’s Herald and expanding OneRoof portfolio.
NZM shares have returned 212.5% in the past 1 year and were trading flat at $0.75 on 4 June, at the time of writing.
Tower Limited revised its guidance on underlying NPAT to $25 million-$27 million for the year ended 30 September 2021. It had previously announced guidance for the same to be greater than $29.8 million.
The guidance reflected rising inflationary pressure and emerging house claims inflation across the portfolio. Higher claim costs were mainly propelled by an increased frequency of large house claims.
The Group announced to pay an interim dividend of 2.5cps on 14 July 2021.
TWR shares have returned 24.92% in the past 1 year and were trading flat at $0.76 on 4 June, at the time of writing.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)