No portfolio is ever complete without several high growth stocks. If you catch them early on in their business development, they could give you a number of years of high-double digit returns.
Although dividend stocks can provide steady income, fast growing stocks take the centre stage when it comes to portfolio performance. Now that the miners and energy resources companies are taking it on the chin, investors need to be on the lookout for companies with secular growth, or growth that doesn't rely on the general economy rising.
I have three such fast growers in industries unrelated to resources that are still wowing investors. Have you been missing out on them?
1) SEEK Limited (ASX: SEK) has been a serial high performer with earnings usually growing about 20% annually. Economists say that Australia may enter an "income recession" in 2015, yet job seekers will still be a force. As the operator of the number one job search website, its competitive advantages will keep its revenue steady. At the same time, the company is expanding into Asia and other regions with developing countries. This should support its regularly high growth rate. Grab shares in SEEK and follow its growth.
2) My Net Fone Limited (ASX: MNF) provides internet-based telecommunication services including data and video services for retail and commercial customers. In the last twelve months the stock has more than doubled from $1.48 a share to $3.80, while earnings climbed 32% in FY 2014. Consensus forecasts are for earnings to still rise over the next few years around 26% annually, so it doesn't look like it is ready to slow down just yet. It could keep your portfolio returns purring along into 2015.
3) Slater & Gordon Limited (ASX: SGH) is a law firm with 70 offices across Australia and has a growing network of practices in the UK as well. It has been in acquisition mode for several years, which has driven revenue and earnings. Net profit has more than doubled since 2011. The stock has gained 42% over the last year. It only pays a 1.4% yield fully franked, but investors should focus on its growth through acquisition as it expands its business footprint into more towns and cities. I prefer growing business chains because they transplant their successful business model into new areas in a way that's easy to follow for investors.
