Today's blue-chip stocks were once the growth stocks of the past. And some current fast growers will eventually become the blue-chips of tomorrow.
Having a good mix of growth stocks will help your returns as well as keep your portfolio balanced. Some small-cap companies may show some promise, but it's just too early to tell how far they can go.
Mid-cap growers may offer the best chance of success. Over the next decade they can expand their business model and possibly even outgrow Australia.
Here are three growth stocks in diversified industries that can add balance to your existing portfolio with the exposure you may be lacking.
— Oil and Gas
Energy producer Oil Search Limited (ASX: OSH) is just beginning the next stage of big growth as the PNG LNG project starts to export LNG to Asia. Production output is projected to almost quadruple over the next few years. This is expected to result in a step-change in revenue that could power further expansion of the project's capacity or fund other acquisitions. Some analysts are looking for very high double-digit earnings growth over the next two years.
— Online sales
Carsales.Com Ltd (ASX: CRZ) is acquiring interests in a number of successful foreign car sales websites such as the two biggest sites in Brazil and South Korea. Using the growth and free cash flow from its number one car sales website in Australia, carsales.com.au, it invests in similar sites abroad and slowly increases its stake in them as they grow. Its earnings benefit from their success and Carsales.com can build up a controlling interest. These countries have large populations and big car markets, Carsales.com can maintain its solid growth for years.
— Healthcare
Healthcare may not sound like a "sexy" industry, but Sirtex Medical Limited (ASX: SRX) sure does have attractive growth prospects. Its specialised liver cancer treatment is already being successfully sold in the US and Europe. If the results of a clinical trial next year come out as positive for the extended use of its cancer fighting medical product, the company could see its sales skyrocket. Already, investors have bid up the share price to a seemingly ridiculously high 54 PE in anticipation. I wouldn't follow the crowd like that now, but just think what the company could be doing in 5 – 10 years if the product becomes a standard cancer treatment in Europe and Asia. The potential is great.
