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Date : 25/10/2021

5 ASX Stocks Set To Double Your Investment in 2021

Top 5 ASX Stocks To Double Your Investment in 2021

The ASX is off to a positive start to the week today as Miners and Energy stocks were bullish due to the rebound in commodity prices. The ASX 200 gained 0.3% to 7441 points. The liquidity pumped into markets continues to push the rally.

Given the recovery play and considerable consolidation we have seen in the iron ore sector, there are opportunities opening up on the ASX that have the potential for significant gains.

Our List of top ASX 200 stocks to Buy in 2021

REA GROUP LIMITED (ASX: REA)

If you’re in quest of growth stocks, then you may want to look at REA Group. It is a leading provider of property and property-related services via websites and mobile apps. They operate across Australia and Asia.

REA is best-known for its realestate.com.au website which is dominating the ANZ market. So much so, during FY21, the company revealed that 12.6 million people visited its website each month on average. This led to a 35% increase in average monthly visits to 121.9 million, which was more than three times that of its nearest competitor.

REA’s impressive performance brought a 13% increase in its revenue to $928 million. EBITDA jumped by 19% to $565 million. FY21 results were well ahead of expectations.

Looking forward, REA exhibits a dominant market position. We are convinced that the company is well-positioned ahead for growth. Hence, there is a thriving housing market. Plus, REA is on the watch for new acquisitions and to develop new revenue streams. We like this stock and it is one of the best ASX shares to buy now.

Webjet (ASX: WEB)

Webjet (ASX: WEB) is a global travel business and is well placed to benefit as domestic leisure markets open up. The company operates through the B2B and B2C channels, digitally. The operations include online sale of travel products, including flight tickets and hotel rooms.

The company also has ancillary products such as holiday packages, hotels, car hire and travel insurance. The company has presence in Australia, New Zealand, Europe, Asia-Pacific and Americas, Middle East & Africa (AMEA). Webjet operates under 3 segments – Webjet OTA, WebBeds, and Online Republic.

WEB has a market dominating position in the travel industry and has the potential to be one of the winners in the post-pandemic travel boom. Webjet has managed its business exceptionally well – cutting costs and streamlining operations in order to position themselves to benefit from the pent-up travel demand.

Given the effects that the pandemic has had on the travel industry, Webjet will also emerge from the pandemic relatively stronger than it did going in. This is because all their lesser competitors will be more severely affected than Webjet has been.

The company has managed to decrease their costs by 20% by streamlining operations, fortified their balance sheet and is now optimally positioned to capture all the pent-up demand from the travel industry. It is one of the best ASX growth stocks to Buy now.

IDP Education Ltd (ASX: IEL)

IDP Education is a leading player in international education services. The company is helping international students study in English-speaking countries. IDP also co-owns the International English Language Testing System (IELTS), the world’s most popular high stakes English language test.

The company has offices in 32 countries around the world. This language testing and student placement firm has been recently tipped as hot stock to buy by a few analysts. While we acknowledge that the immediate term is quite volatile due to the pandemic. In the long run, we see in IDP considerable growth potential. Hence, we forecast a substantial three-year CAGR above 65% for its EPS. Indeed, this is in anticipation of a rebound after a tumultuous FY21. Thus, the year was completely impacted by COVID-19, whereas half of FY20 was unaffected by COVID-19. IDP Education’s FY21 net profit was down 42% to $39.5 million.

In contrast with FY21, the long-term growth opportunity for IEL is compelling. Indeed, the company is reinvesting in digital capability. Consequently, that will increase IDPs competitive advantage and strengthen its relationship with tertiary education institution clients.

We estimate IEL to have less than 5% market share of the Canada and UK markets. Therefore, there is a significant opportunity to gain share in a highly fragmented and under-penetrated market.

BHP Group (ASX: BHP)

BHP Group is arguably the most well-diversified mining and exploration company there is, and it is a part of every investor’s portfolio for different reasons – maybe for the stable dividends, or to decrease the overall volatility of the portfolio. It is also one of the best blue-chip stocks that trade on the ASX.

However, the BHP share price has come under significant pressure since last month. Although, on Friday, the mining giant’s shares jumped up by 3% to $37.74 per share.

For the last six months, the falling BHP shares kept the Australian market lower while investors could not avoid concerns about the troubled property giant Evergrande. The ASX has bucked a good lead from the US as investors look for confirmation that Evergrande paid a $US83.5 million interest payment on Thursday. Evergrande pledged it would. Although some investors say they are yet to see the evidence. The Chinese giant is struggling to pay about $418 billion in debts and investors fear a collapse could reverberate around the world.

Despite the recent event, BHP remains a solid play, especially for its lucrative dividend of US$ 3.01 per share representing a solid payout ratio of 89%. The record dividend was the result of operational excellence throughout the year. BHP exhibited solid performance that led to consistent free cash flow generation and an efficient margin of 64%.

Looking forward, BHP is also streamlining its business. Hence, we have seen Woodside Petroleum and BHP announcing their intention to enter a merger commitment to combine their respective oil and gas portfolios by an all-stock merger to create a global top ten independent energy company. This move from BHP will pave the way for the resource giant to move into the Potash business and further focus on developing a net-zero company.

Xero (ASX: XRO)

Another hot growth stock to consider is technology heavyweight Xero. Xero provides a cloud accounting solution for small businesses. The software enables SME owners to run their business efficiently on the go by uploading their banking transactions and invoices. Thus, that is a fantastic solution valued by many clients. On top of that, Xero reconciles the transactions and provides its clients with accounting services for a subscription fee.

The cloud-based firm saw its stock appreciated by almost 10% since early August to $152.98 per share. The outperformance has been driven by a positive reaction to the launch of its app store.

Xero launched its App Store across the ANZ and the UK markets. This is part of the company’s plan to streamline and simplify access to the thousands of apps currently available in its ecosystem. This App Store has a similar model to Apple and Google App store. It charges a 15% fee for app subscriptions purchased through its store.

However, Xero share price slumped along with the broad market correction in September losing all the gains accumulated in August.

Although looking at the long term, we can only see a positive outcome for Xero. Xero shares have also come roaring back as they usually do. XRO shares are back up to above the $150 mark.

So far, we like the idea of increasing focus on monetising its strong market positions within the ANZ and the UK markets. Accordingly, we think that the incremental revenues will boost Xero to accelerate its ongoing global expansion. Xero is one of the best growth stocks on the ASX.

Are You Looking To Buy The Best Stocks In 2022?

Stay on top of upcoming market trends! Whether you are an SMSF investor or a young investor with your portfolio, we cover a wide range of stocks across all sectors, including mining, financials, industrials, real estate, technology, health and biotech, etc. It will give you an edge to invest and trade ASX listed stocks across large, mid and small caps with an advantage.

Get stock tips with our Market Experts. We help self-directed investors and self-managed super funds (SMSF) make smarter investment decisions and get better returns. Fill in your details and download your free Report instantly for Top 3 Dividend Stocks to buy in 2022!

 

Top 5 ASX Stocks
to Buy for Capital Growth in 2022

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