3 more shares that could grow into billion dollar winners

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With the big banks and the miners seemingly going up and down more than an elevator these days, investors could potentially find greater returns by looking at smaller ASX-listed companies.

Although small caps come with a higher level of risk compared with with their blue chip equivalents, I believe that if you choose carefully you could go some way to reducing this risk.

A few weeks ago I picked out four tech shares which I believed could grow into billion dollar companies. Here’s three more that I believe could do this as well:

Catapult Group International Ltd (ASX: CAT)

This leading sports analytics company has just produced a stunning quarterly result which has taken the share price higher by almost 20% in the last month. In what has traditionally been the company’s slowest quarter, the third quarter saw unit orders leap 118% year-on-year setting it up for a great full year result.

Judging by the fact that it has a growing client list that includes the biggest names in sports it appears to be delivering results. This is backed up by the company’s low churn rate of less than 1%.

Management estimates the addressable market will grow from $125 million in 2014 all the way up to $4.7 billion by 2021. With Catapult being one of the market leaders, I believe it is positioned well to grow at a rapid pace for the next five years.

Clearview Wealth Ltd (ASX: CVW)

ClearView is a life insurance, wealth management and financial advice solutions company with a market capitalisation of $570 million. The stand out performer for the company in its latest half-year results was its life insurance segment which grew net profit after tax by over 65% year-on-year. This segment’s strong performance helped ClearView increase overall underlying net profit after tax by 35% year-on-year.

According to CommSec, analysts are expecting earnings to grow at an unbelievable average rate of 79% per annum through to FY 2018. Priced at 51x earnings currently, the shares do not come cheap. But if it delivers on expectations, few will mind paying a premium for the shares.

Webjet Limited (ASX: WEB)

Webjet has delivered top line growth for an impressive 10 consecutive years. I believe that thanks to the growth in tourism across its key markets this will continue to be the case for a good number of years more.

In its interim results management reaffirmed full year EBITDA guidance of $33.5 million. But due to its strong performance in the first-half which saw EBITDA growth of 26.4% year-on-year, I feel there is a good chance it will produce a beat on earnings expectations.

Analysts are expecting earnings to grow at 17% per annum in FY 2017 and FY 2018. If it manages to deliver on these expectations then I can see the company making a climb towards a billion dollar market capitalisation.

There is a fourth share which I believe could also do the same in the future as well. This tech share is one which I feel could produce equally strong returns for shareholders in the next few years.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. 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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