Covid19 has impacted several businesses across various sectors. But, one common theme across all global equities is that – firms that are capital intensive and that carry heavy debt have been punished, while firms that have flexible business and operating models have benefitted. This is the reason why the technology sector has outperformed the brick and mortar sectors that were always considered safe investments.
Some of these stocks have grown exponentially during the pandemic and has delivered massive returns
Afterpay is the largest player in the high growth buy-now-pay-later (BNPL) space. Having taken the Australia and New Zealand market by storm, Afterpay has now had a growing presence in the USA, Canada, UK, and is now entering the European Union. The stock has rallied 244% during 2020 and it has now breached the $100 per share level.
The “where to next?” question is pretty clear for Afterpay. We expect the firm to gain market share in the USA and Europe. Growth prospects are high but at what costs? Our report on Afterpay goes into detail on their financial metrics and why they are surging during an economic crisis. Afterpay remains one of the best growth stocks on the ASX.
The ASX-100 listed company provides real estate to the digital world. The firm has and is continuing to benefit from the push towards a digital economy by offering data centre and connectivity solutions, among other services. The firm currently operates 9 data centres in Australia and is already servicing clients such as Amazon’s AWS wing. At a time in which the global economy has been thrown down a hole, Nextdc has emerged from down under and surged by more than 80% in 2020 – a success story of an ASX growth stock.
Nextdc has not just weathered the Covid19 storm but looks like it is emerging out of the crisis stronger than before. Why? Our Nextdc analysis dwells into its unit economics. Investors can read more on our website where we go into detail and analyse the strengths and weaknesses of the firm.
The California based medical equipment manufacturing company also now offers a cloud-based software for diagnosis and treatment without the need for a hospital. Telemedicine and out-of-hospital healthcare looks to be booming and the pandemic has accelerated this shift. As a result, ResMed has benefitted and is aiming to serve 250 million patients through its products by 2025. An ambitious growth strategy that is well within reach for the company. Both sleep & respiratory care, and their SaaS offering has seen steady growth in the past few years and all our estimates point towards ResMed being a good investment in the long-term. Resmed demands a valuation of over $40 billion and is a growth stock to keep an eye out for.
The human fertility and assisted reproductive services are estimated to grow in the coming years. MVF operates 21 fertility clinics, 18 ultrasound clinics, 3 centres for assisted reproduction, 2 diagnostic labs, and 1 hospital. MVF operates in Australia and Malaysia and is one of the biggest players in this space. The firm has been acquiring clinics to integrate diagnostic services with fertility – both industries are likely to see high growth in the coming years. To reduce the impact of the pandemic, the firm has also reduced debt recently, making the firm financially flexible.
What’s better is that they also pay dividends! Surely an ASX growth stock to buy considering its financial health and future potential.
Meridian Energy is dual listed stock – both on the ASX and NZE. It is a 100% renewable electricity generator that retails to homes, farms, and businesses. Meridian generates electricity using solar, wind, and hydro sources. The firm is the largest electricity generator in New Zealand. Meridian generates approximately 30% of the national electricity in New Zealand and retails through Meridian Energy and Powershop. The renewable energy industry is poised for high growth and will be supported by a lot of investments as the world will move towards clean energy. The stock has returned over 35% in the past 3 months. With a lot of tailwinds for the entire industry, MEZ is a growth stock to look out for.
When looking out for growth stocks, it is important to consider stocks from sectors and industries that have a lot of tailwinds and supporting macro economic factors. Find out what ASX growth stocks we hold in our growth and premium portfolios at Shares in Value by contacting us by clicking here.