Stocks that are expected to significantly grow their profitability in the future can add meaningful upside to your portfolio. Senex Energy and Avanco Resources are examples of many high-growth stocks that the market believe will be upcoming outperformers. Investment in growth companies can benefit your current holdings, whether it be in established tech giants or undiscovered micro-caps. Here, I’ve put together a few companies the market is particularly optimistic towards.
Senex Energy Limited (ASX:SXY)
Senex Energy Limited explores, develops, and produces oil and gas resources in Australia. The company size now stands at 137 people and with the market cap of AUD A$651.27M, it falls under the small-cap stocks category.
SXY is expected to deliver a triple-digit high earnings growth over the next couple of years, bolstered by a significant revenue which is expected to more than double. An affirming signal is when net income increase is supported by top-line growth. Since net income isn’t artificially inflated by one-off initiatives such as cost-cutting, we know this profit growth is more likely to be sustainable. We see this bottom-line expansion directly benefiting shareholders, with expected positive return on equity of 6.16%. SXY ticks the boxes for high-growth generation on all levels of line items, which makes it an appealing stock to dig into deeper. Interested to learn more about SXY? Have a browse through its key fundamentals here.
Avanco Resources Limited (ASX:AVB)
Avanco Resources Limited operates as a mineral producing company in Brazil. The company provides employment to 141 people and with the company’s market cap sitting at AUD A$417.83M, it falls under the small-cap group.
Extreme optimism for AVB, as market analysts projected an outstanding earnings growth rate of 74.90% for the stock, supported by a double-digit sales growth of 40.62%. An affirming signal is when net income increase also comes with top-line growth. Even though some cost-reduction initiatives may have also pushed up margins, in the case of AVB, it does not appear extreme. This prospective profitability should trickle down to shareholders, with analysts expecting the company to generate a high double-digit return on equity of 20.64%. AVB ticks the boxes for robust growth generation on all levels of line items, which makes it an appealing stock to dig into deeper. Interested to learn more about AVB? Take a look at its other fundamentals here.
Westgold Resources Limited (ASX:WGX)
Westgold Resources Limited engages in the exploration, development, mining, and treatment of gold assets in Western Australia. Founded in 1987, and currently run by Peter Cook, the company employs 371 people and with the stock’s market cap sitting at AUD A$571.85M, it comes under the small-cap category.
An outstanding doubling of earnings is forecasted for WGX, driven by an underlying sales growth of 41.07% over the next few years. An affirming signal is when net income increase also comes with top-line growth. Even though some cost-reduction initiatives may have also pushed up margins, in the case of WGX, it does not appear extreme. We see this bottom-line expansion directly benefiting shareholders, with expected return on equity coming in at a notable 21.51%. WGX’s bullish prospects on both the top and bottom lines make it an interesting stock to invest more time to understand how it can add value to your portfolio. Thinking of investing in WGX? Take a look at its other fundamentals here.
For more financially robust companies with high growth potential to enhance your portfolio, explore this interactive list of fast growing companies.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.