There are many and varied ways to create wealth for an early retirement. The fast method was employed overnight by Australia’s 19-year-old world number 144, by ousting Rafael Nadal from Wimbledon.
Lesser physical specimens that invest for the medium-to-long term have that same potential for a carefree retirement. Along with investing in the established names in the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) such as BHP Billiton Limited (ASX: BHP) and Telstra Corporation Ltd (ASX: TLS), superior growth prospects may lie with these 3 outperforming small-cap stocks. In the order appearing below, they have risen during the last financial year 94%, 230% and 89% respectively.
1. Vocation Ltd (ASX: VET) was newly listed in early December last year and joined the likes of Navitas Limited (ASX: NVT) in providing vocational education and training. After releasing an interim profit report that showed revenue in the first half exceeding company guidance in the prospectus, the company has since acquired a national education and training provider called Real Institute. In making such acquisitions they join other successful rollup type companies (such as Sonic Healthcare Limited (ASX: SHL) and 1300 Smiles Limited (ASX: ONT)) that extract value-accretive synergies by building scale and additionally gaining geographical diversification.
2. TFS Corporation Limited (ASX: TFC) is a Western Australian company that has become the world’s largest owner and manager of sustainable Indian sandalwood plantations. Yesterday the company issued a profit upgrade which catapulted the shares up another 7% to $1.76. Indian Sandalwood oil is in demand from cosmetics and pharmaceutical companies, where demand is fast outpacing supply. Sandalwood is a key ingredient for perfume and is now also being used in treatments by dermatologists.
3. Greencross Limited (ASX: GXL) began life as another rollup-style company acquiring veterinary practices across Australia and extracting surprisingly large synergies from the onerous overheads of stand-alone practices. However, the company has now morphed into Australia’s largest integrated consumer-facing pet-care company, firstly by acquiring pet-care company Mammoth Pet Holdings. More recently an acquisition was completed of City Farmers, a leading Australian specialty pet-care retailer. Upside will be derived from significant cross-sell opportunities from leveraging established customer bases within all three groups.
While it may be a steadier path to early-retirement than a professional tennis player, the above-mentioned companies illustrate that investors can greatly outperform the wider market. Another potential growth stock with a formidable fully franked dividend will be revealed in the following FREE research report.