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Can these ASX success stories continue?

While the S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) rose some 16% in the last 12 months, shares of these two ASX companies did even better. Small cap Infomedia (ASX: IFM) rose 145% and mid cap G8 Education (ASX: GEM) packed on nearly 148%. The question for investors today is, can these success stories continue?

A look at Infomedia

Infomedia is a Sydney-based tech company supplying electronic parts catalogues and related services to car dealerships across the globe. The parts catalogues help these dealerships’ garages to organise ordering and maximise sales. Following a rough few years in 2010 and 2011, this company is once again growing, and looks as though it can continue to do so in the future.

Most recently, the company announced the renewal of its contract with all Land Rover dealerships until 2016, as well as new deal with Kia Canada. Infomedia has also expanded its operations in Europe, a key market for the company, representing about 50% of all Infomedia’s international clients. The company has also alluded to new products to be rolled out in the second half of 2013 and in 2014.

While not the bargain they were a year ago, Infomedia shares aren’t overpriced today, trading on a P/E of about 15, especially when you consider the shares also pay a dividend with a yield in the 5.5% range.

G8 Education on track but pricey

Childcare centre aggregator G8 Education has posted massive growth not just over the last year, but over the last six years since its listing. And with a huge total addressable market that conceivably includes most Australian childcare centres – against some 200 it owns, operates or franchises today — the company could continue to grow for many years to come.

Unfortunately, the shares look fairly pricey, trading just now for about 27 times earnings. This stock may be worth putting on a watch list as you wait for the valuation to come back within buying range.

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Motley Fool contributor Catherine Baab-Muguira does not own shares in any company mentioned in this article. 

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