- Growth stocks are of companies that have the potential to grow their earnings fast.
- Investors have high expectations from these companies.
- Growth stocks usually don’t give dividends.
Growth stocks expand their earnings and sales faster than other companies. The growth companies don’t pay dividends as they like to plough back the cash for their growth.
Growth companies can be identified through their business strategy, unique product lines and plans to expand into other geographies, growth large caps, medium caps and small caps. They can be traded at any exchange.
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Growth stocks are often compared to value stocks. While growth stocks have high valuations, value stocks are underrated and are dividend payers. Investors must choose their stocks carefully, but prudent investors have a mix of stocks to grow their income.
Against this background, let’s have a look at some companies that are listed on the NZX.
Fletcher Building Limited (NZX:FBU)
FBU has good growth prospects. It has become profitable, and recently, its NZ$300-million share buyback programme met with a positive response from the investors. The Company continues to make targeted investments in line with its strategy. Economic trends in its key markets remain supportive of further growth. With building activity increasing, the Company looks poised for growth.
Related Read: Fletcher Building (NZX:FBU): Will it pass with flying colours in the upcoming results?
On 6 September, the stock was trading up by 0.14% at NZ$7.360.
AFT Pharmaceuticals Limited (NZX:AFT)
AFT has a product line in the therapeutics segment and is constantly innovating on its products. It is also one company that is rapidly expanding into other geographies with its products. So far, it has entered into many European and North American markets with its products. Most recently, it tied up with a US-based company to sell its new product, IV-fluid.
Related Read: What is AFT Pharmaceuticals’ (NZX:AFT) strategy towards driving growth?
On 6 September, the stock was trading up by 0.48% at NZ$ 4.200, at the time of writing.
Sky Network Television Limited (NZX: SKT ASX:SKT)
It’s a TV operator that is working very hard to attract and retain its customers. Last year, it tied up with several global companies to provide content in various formats to its customers. The recent agreements for content sharing include big sports channels like ESPN, NBCUniversal and most recently NRL and NZ Rugby league. However, its biggest achievement was renewing its deal with WarnerMedia to provide entertainment content to its customers. HBO and HBO Max also came on board as a result of this deal.
On 6 September, the stock was trading up by more than 7% at NZ$0.220, at the time of writing.
Blis Technologies Limited (NZX:BLT)
BLT is a company in the small-cap category but its product innovation and expansion strategy reflect good growth prospects. Its products like UltraBLIS have been in demand globally.
In FY20 and FY21, BLT has continued to build its BLIS® brand. It is present in China in a big way and is looking for opportunities in other countries as well. Recently, it tied up with an Indian company to get a stake in the Indian market.
On 6 September, the stock was trading flat at NZ$0.067, at the time of writing.
Mercury NZ Limited (NZX:MCY)
It is New Zealand’s electricity generation and retailing company. It is a fast-growing utilities company because most of its electricity generation is through green energy. It operates nine hydroelectric generating stations and five geothermal plants in the Taupo area. Its energy plan is in line with New Zealand’s sustainable energy future. ‘
Also Read: How would these 10 NZX stocks perform in their upcoming results?
On 6 September, the stock was trading down by 0.07% at NZ$6.675 at the time of writing.
Bottomline: Growth stocks for September are the ones that are growing their earnings and sales faster than other companies. They have a better price to earnings ratio and rest on strong business plans.