Stocks that are expected to significantly grow their profitability in the future can add meaningful upside to your portfolio. Pro-Pac Packaging and Senetas are examples of many high-growth stocks that the market believe will be upcoming outperformers. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good additions to your portfolio.
Pro-Pac Packaging Limited (ASX:PPG)
Pro-Pac Packaging Limited, together with its subsidiaries, manufactures and distributes industrial, protective, and rigid packaging products in Australia. Formed in 1987, and now run by Grant Harrod, the company employs 412 people and with the market cap of AUD A$241.62M, it falls under the small-cap category.
PPG’s forecasted bottom line growth is an optimistic 42.06%, driven by the underlying strong triple-digit sales growth rate over the next few years. 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. This prospective profitability should trickle down to shareholders, with analysts expecting the company to generate a positive return on equity of 10.60%. PPG 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 PPG? Take a look at its other fundamentals here.
Senetas Corporation Limited (ASX:SEN)
Senetas Corporation Limited provides network data security solutions worldwide. Established in 1999, and currently lead by Andrew Wilson, the company size now stands at 29 people and with the company’s market cap sitting at AUD A$118.93M, it falls under the small-cap category.
An outstanding 30.28% earnings growth is forecasted for SEN, driven by an underlying sales growth of 32.17% over the next few years. Profit growth, coupled with top-line expansion, is a positive indication. This is because net income isn’t artificially inflated by unsustainable activities such as one-off cost-reductions expected in the future. We see this bottom-line expansion directly benefiting shareholders, with expected return on equity coming in at a notable 20.40%. SEN ticks the boxes for robust growth generation on all levels of line items, which makes it an appealing stock to dig into deeper. Want to know more about SEN? I recommend researching its fundamentals here.
Paringa Resources Limited (ASX:PNL)
Paringa Resources Limited, together with its subsidiaries, engages in the exploration and development of resource projects. Paringa Resources was formed in 2012 and with the market cap of AUD A$126.77M, it falls under the small-cap category.