Is Corporate Travel Management Ltd the best growth stock on the ASX?

Corporate Travel Management Ltd (ASX:CTD) is showing more similarities to Flight Centre Travel Group Ltd (ASX:FLT).

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Wouldn't it be great if you had a crystal ball to look into the future and see what will be the best performing businesses on the ASX in the years ahead?

Well you might not need one if you own shares in a travel services business that is growing at an eye-watering rate with seemingly no sign of a slowdown.

The global travel sector has some powerful tailwinds that are easy to feel. Human curiosity feeds a desire to travel that translates into strong demand growth and companies able to leverage this look positioned to benefit.

Flight Centre Travel Group Ltd (ASX: FLT) is a textbook example of how a business can grow by taking its cut of the global travel spend. Indeed, Flight Centre's overseas growth potential means it may be undervalued at $45.92, on a market cap of $4.53 billion. It's a founder-led business that serves the leisure market, with some decent growth in the corporate sector too.

Although Flight Centre's recent growth cannot compare to junior rival Corporate Travel Management Ltd (ASX: CTD). This Brisbane-based business has been growing earnings at phenomenal rates via an acquisitive growth strategy and strong organic growth via new client wins.

The company posted underlying earnings of $28.9 million in the last financial year and now expects earnings slightly above $48 million in the current financial year. That's an earnings growth rate of approximately 70%, some of which is via acquisitions that have to be funded by issuing scrip, although much of which is also organic.

The 47% earnings per share (EPS) growth rate for the first half of financial-year 2015 over the prior half year represents the relative EPS accretive success of the acquisitive strategy.

However, in the first half of the year, Corporate Travel Management also saw moderate to strong organic growth in all its operating regions. The organic returns symptomatic of a growth sweet spot via its easy to sell solutions that help its corporate clients save time and money.

Often it's the simple business models that produce the most rocketing growth and Corporate Travel's technology is not rocket science either. The mutually-beneficial nature of the tech-service offering is the real winner as it saves its clients money, while providing a financial cut for Corporate Travel. Hardly surprising then that it has generated consistently strong organic growth around the world.

The business also has a reportedly first class management team headed up by founder Jamie Pherous, with ambitions to keep building its global scale.

Recently the company got a foothold in Europe via the acquisition of a UK travel operator and is now making inroads into a potentially larger prize. China's outbound travel industry is growing moderately quickly, but it's the scale of it that is the real attraction. This hasn't escaped the attention of Corporate Travel Management, which has just announced a joint venture to tap into this lucrative travel market.

Of course you have to pay up for a slice of this high growth business, with it currently selling on around 52x annualised earnings per share, based on half-year results and a price of $11.46.

Although the business is arguably still at the start of its journey and if the EPS growth rates are maintained then this company has a big climb ahead of it yet.

In all honesty though I didn't know anything about Corporate Travel Management's potential until The Motley Fool's ace stock picker Scott Phillips brought it to my attention about two years back. Since then it's returned nearly 200%, although it's not the only one with bags of potential…..

Motley Fool contributor Tom Richardson owns shares of Corporate Travel Management Limited and Flight Centre Travel Group Limited. You can find Tom on Twitter @tommyr345 The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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