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5 emerging ASX shares with bucket loads of potential

Whilst the majority of investors will focus on Australia’s biggest 200 companies included in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), I believe there are some high quality smaller companies flying under the radar that investors should be aware of.

Five companies included in the S&P/ASX Emerging Companies (Index: ^AXEC) (ASX: XEC) index that have caught my eye in the last 12 months are as follows:

Appen Ltd (ASX: APX)

Appen is a leading provider of high-quality language data and services to government agencies, automakers, and major technology companies such as Facebook and Microsoft. This year management has guided to earnings growth in excess of 20%. I’m confident that the strong demand the company is experiencing for its services will mean it delivers on this.

Eden Innovations Ltd (ASX: EDE)

This innovative clean energy company is certainly one to watch in my opinion. After some impressive trial results the company’s EdenCrete carbon nanotube enriched liquid concrete admixture is developing quite a reputation. Trials are now underway to test its use for applications including ready mix concrete, low shrinkage concrete for dams, and pre-cast applications.

Freedom Insurance Group Ltd (ASX: FIG)

Although this life insurance specialist has seen its share price double since listing on the ASX at the end of last year, I don’t think it is too late to snap up its shares. The growing popularity of its products means that Freedom has been forced to upgrade its full-year guidance twice in the last few months.

Murray River Organics Ltd (ASX: MRG)

Murray River Organics is another recent addition to the ASX. Although the majority of its sales derive from the Australian and New Zealand market, the organic healthy snacks company has its eyes on the lucrative $104 billion a year global certified organic food and drink market. Murray River Organics has taken its first steps to boosting its exports with the engagement of sales representatives in key international markets.

MotorCycle Holdings Ltd (ASX: MTO)

Year-to-date the operator of the largest motorcycle dealership network in Australia has seen its shares rise by a massive 17%. This was thanks largely to an 18% lift in motorcycle sales for the six months to December 31, leading to a 27% jump in half-year net profit after tax. With trading conditions within the industry now the strongest this decade, I think MotorCycle Holdings is perfectly positioned for solid earnings growth over the next few years.

Finally, I would suggest investors team up an emerging company investment with one of these hot growth shares. I think that each looks set for a storming year.

Top 3 ASX Blue Chips To Buy In 2017

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Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Appen Ltd. 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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