Australian investors, traditionally drawn to the expansive US market, are now eyeing the shifting economic landscape at home. With the Reserve Bank of Australia setting lower interest rates than the UK, US, and EU, ASX growth stocks, which often thrive in low-interest environments through cheap borrowing, might find it easier to achieve growth. Here are the top 3 ASX growth stocks to buy and watch out for:
Cochlear (ASX: COH)
The first in our list of growth stocks to buy for October is Cochlear, a leader in the production of cutting-edge implantable devices. This company has transformed the lives of those with severe hearing impairment. Their standout products, including the Nucleus cochlear implant, the Hybrid electro-acoustic implant, and the Baha bone conduction implant, have solidified Cochlear’s market dominance.
The rising prevalence of hearing issues with an ageing global population underscores the company’s promising long-term growth, as highlighted by a recent 10% increase in their underlying profit. With a current market cap of A$16.77 billion, Cochlear is optimistic about the future, forecasting a continued strong earnings momentum into fiscal 2024, expecting an underlying net profit between A$355 and A$375 million.
Breville Group (ASX: BRG)
Based in Sydney, the Breville Group is a recognized player in the home appliance sector on a global scale. The company distributes its kitchen products to over 70 countries, with key brands like Breville, Kambrook, and Ronson. To tap into the high-end coffee market, they’ve added Lelit and Baratza to their offerings. Their recent annual financial report indicates a 4.2% increase in revenue to A$1.48 billion, with EBITDA rising by 16.8% to A$218 million.
Breville Group insiders own shares worth around A$28m, making up about 1.0% of the company. This level of insider ownership is positive.With a market cap of A$3.17 billion, analysis from the price multiple model suggests BRG shares might be valued higher than some of its industry peers. Thus, Breville Group makes the October list of growth stocks to buy now.
Seek (ASX: SEK)
Seek operates an online platform linking employers with jobseekers, with a digital platform that is straightforward, featuring job postings, user profiles, and application monitoring tools.
For the full year, the company reported a 10% increase in revenue to A$1.22 billion. However, its net profit after tax decreased by 16%, falling short of many analysts’ forecasts. This performance may present a potential buying opportunity for investors looking to capitalise on price dips, making it an ideal growth stock to buy for October 2023.
With a market cap of A$7.8 billion, Seek recently communicated its decision to raise its dividend to A$0.23 on the 3rd of October. This marks a 9.5% increment from the previous year’s dividend of A$0.21, bringing the dividend yield to 1.9%, a development that shareholders will likely appreciate.
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