3 exciting growth shares to buy next week

Unfortunately for investors using index funds, over the last 12 months the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has declined by over 2%.

Although I do think that index funds can be a great tool, I believe this decline demonstrates how successful stock picking can be a way of outperforming the market. But picking the right shares is no easy feat, by any means.

By carefully choosing quality shares with strong growth prospects I believe investors can give themselves an advantage. These three shares beat the market in the last 12 months, and I wouldn’t be surprised to see them do it again over the next 12 months.

Australian Pharmaceutical Industries Ltd (ASX: API)

I’m a big fan of Australian Pharmaceutical Industries. Its name might not ring a bell, but its portfolio of brands are likely to. API is the owner and operator of the popular Priceline, Soul Pattinson, and Pharmacist Advice brands, as well as being a distributor to pharmacies across the country. In the last five years, it has grown its earnings by an average of 11% per annum. Thanks to the strong performance of its Priceline brand, a fragmented market, and aggressive expansion plans, I believe API is poised to continue this strong performance for at least the next couple of years.

REVA Medical Inc (ASX: RVA)

REVA Medical is a clinical stage medical device company that has developed bioresorbable scaffolds as an alternative to traditional metal stents. Traditional metal stents are permanently implanted into an artery to treat coronary artery disease, whereas REVA Medical’s bioresorbable scaffolds are implanted and then designed to disappear naturally over a period of time after their work is complete. So far its clinical trials have been very positive and management looks to be positioning the company and its scaffolds well in a global coronary stents market which is estimated by Kalorama Information to be worth US$5 billion a year. With a market capitalisation of $500 million, I believe REVA has an incredible amount of potential.

Webjet Limited (ASX: WEB)

Webjet’s growth has been nothing short of spectacular in my opinion. The travel booking company has now delivered 10 consecutive years of solid top line growth, and I believe it can continue this trend for the foreseeable future thanks to the growth in tourism across its key markets. So far this year the signs of this happening have been good. Despite the slowing growth that Flight Centre Travel Group Ltd (ASX: FLT) is facing, Webjet produced half-year EBITDA growth of 26.4%. Another potential bonus is that analysts are expecting the company to grow its dividend at an average of 29% per annum for the next couple of years, according to CommSec. I feel this could well make Webjet a great long-term investment for both growth and income.

Before you look at investing in any of these shares I would highly recommend you check to see if you own one of these three rotten ASX shares first. Each could be harming your portfolio and may be best out of it if you ask me.

3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an "emergency low." Simply click here to uncover these stocks.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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