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3 stocks with growing profits that you probably don’t know

Individual investors can sometimes get an edge over institutional investors simply because they become aware of a product or service before ‘the big end of town’ does. This line of thinking goes beyond just being aware and stretches to an individual’s ability to gain insights into a business by having the opportunity to observe the popularity of a particular product before the general investment community becomes aware of it.

This generally works best amongst small and micro-cap companies as an individual’s experience can translate into an insight about the company – this is much less likely to occur with a large business. For example, shopping at a busy Woolworths or having a positive experience with Telstra isn’t going to provide you with a competitive edge over other investors.

Here are three ‘out-of-the-spotlight’ companies that are forecast to grow at an above average growth rate which investors may consider adding to their watchlist.

M2 Group Ltd (ASX: MTU) won’t be a familiar name to many investors but the $1.1 billion telecommunications firm owns well-known brands including Commander, iPrimus and Dodo. Like many of the second-tier players, M2 is having success at enticing retail and corporate customers to switch to their lower cost services.

IRESS Ltd (ASX: IRE) provides widely used and critical software to stock brokers and financial advisors. It is also utilised by many investors using online trading systems. Despite the backbone nature of its services, IRESS is far from a household name amongst investors.

Ardent Leisure Group (ASX: AAD) is the leisure and entertainment company behind venues which many investors may be familiar such as Dreamworld, AMF Bowling and Goodlife Health Clubs.

While these three stocks are definitely growth stocks and highly desirable to own, the catch is to get to them before the market discovers them and re-rates them.

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Motley Fool contributor Tim McArthur owns shares in Iress Ltd.

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