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Most investors find it challenging to find companies with prospective double-digit growth rates that are also financially robust. These hidden gems also add meaningful upside to a portfolio, should the companies meet expectations. 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.
The Star Entertainment Group Limited (ASX:SGR)
The Star Entertainment Group Limited, an integrated resort company, provides gaming, entertainment, and hospitality services in Australia. Star Entertainment Group was formed in 2011 and with the company’s market cap sitting at AUD A$4.68B, it falls under the mid-cap category.
SGR’s forecasted bottom line growth is an optimistic 21.27%, driven by the underlying double-digit sales growth of 21.90% 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. This prospective profitability should trickle down to shareholders, with analysts expecting the company to generate a positive return on equity of 7.97%. SGR’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. Could this stock be your next pick? I recommend researching its fundamentals here.
Jumbo Interactive Limited (ASX:JIN)
Jumbo Interactive Limited engages in the retail of lottery tickets through Internet and mobile devices. Formed in 1995, and currently lead by Mike Veverka, the company employs 117 people and with the company’s market capitalisation at AUD A$189.39M, we can put it in the small-cap category.
Extreme optimism for JIN, as market analysts projected an outstanding earnings growth rate of 16.50% for the stock, supported by a double-digit sales growth of 28.20%. It appears that JIN’s profitability may be sustainable as the fundamental push is top-line expansion rather than unmaintainable cost-cutting activities. We see this bottom-line expansion directly benefiting shareholders, with expected return on equity coming in at a notable 30.07%. JIN ticks the boxes for robust growth generation on all levels of line items, which makes it an appealing stock to dig into deeper. Should you add JIN to your portfolio? Check out its fundamental factors here.
Mesoblast Limited (ASX:MSB)
Mesoblast Limited develops cell-based medicines. Started in 2004, and run by CEO Silviu Itescu, the company now has 75 employees and with the stock’s market cap sitting at AUD A$587.17M, it comes under the small-cap category.