To be successful in the stock market we need to sell something at a higher price than we buy it. Normally that would mean one person wins and another loses. But in the stock market things are different.
The market’s long-term upwards trend is the reason we enter into it in the first place and is the reason we can have more than one winner from a single transaction. Depending on your personal goals, you’ll perceive value in different ways.
For example, those who invest inside of their self-managed superannuation accounts may opt for big name dividend stocks like National Australia Bank Ltd (ASX: NAB), Telstra Corporation Ltd (ASX: TLS) and Woolworths Limited (ASX: WOW) because of the generous advantages of doing so, which include low tax rates and franking credits.
Whatever your goals, it’s almost certain you’d prefer making a capital gain rather than a loss. With that in mind, here are three growth stocks which will appeal to value, income and growth investors alike.
1. Peet Limited (ASX: PPC) is Australia’s largest specialist residential housing developer with properties stretching from Western Australia around to Queensland. It’s fair to say the macroeconomic tailwinds of low interest rates, demand for credit and rising house prices are reasons to get excited about this company. However it’s trading on only 17 times FY14 forecast earnings and has modest gearing levels and a market cap of only $581 million.
2. Bentham IMF Ltd (ASX: IMF) is a litigation funder for cases which exceed $5 million. It has an impeccable record for success here in Australia and only chooses the cases likely to succeed at court. It has recently opened an office in Los Angeles but has established partnerships throughout the US and all over the world. Although some investors are concerned over the “lumpiness” of its earnings, the company, its business model and management are all of the highest quality. Currently its trades on forecast FY14 earnings of only 9.8 with a strong dividend yield to match.
3. Cash Converters International Ltd (ASX: CCV) shares are trading cheap. After suffering a heavy setback in earnings throughout 2013 following changes to government legislation regarding fees charged on small loans, Cashies’ management has been busy pursuing other growth initiatives. The company’s Carboodle business is taking off and a number of key Joint Ventures have recently been formed overseas. Trading on 13 times FY14 forecast earnings, this stock should not be overlooked for long.
At current prices each of these stocks could be considered a buy. Peet appears to be riskiest, particularly if house prices suffer a sudden fall. However Bentham IMF and Cash Converters are small-caps stocks with huge potential and won’t last long at their current prices.