2016 has been a disappointing year for the ASX with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) up just 3.7%.
Add in dividends, and the returns look much better around 8.4%.
But it's probably fair to say that many retail and SMSF investors would be frustrated at the lack of capital growth from many of the ASX's blue-chip stocks.
Here are three high-quality growth stocks I'd consider buying today…
Sirtex Medical Limited (ASX: SRX)
Sirtex has developed a product that helps people with liver cancer, Sir-Spheres. The company continues to report growing sales, despite reaching 2% of its addressable market so far. In 2016, dose sales grew 16.7%, and the company has forecast another year of double-digit unit sales growth in FY17. The share price is trading below $30, which represents a P/E ratio of around 31x. For a company of Sirtex's quality and potential, that appears cheap.
REA Group Ltd (ASX: REA)
Also trading on a P/E ratio of around 31x, the owner of realestate.com.au has seen its share price pull back to $51.50. Investors may have been spooked by media articles suggesting Australia's property market could be about to sink and sink fast. Those that have sold out fail to understand how REA's business works. The company should be able to continue generating high growth under almost all conditions. More properties on the market are good news for REA, taking longer to sell – that's also good news for REA Group. And there are the overseas businesses which everyone seems to forget.
Beacon Lighting Group Ltd (ASX: BLX)
Beacon Lighting had a tough financial year in 2016, and saw its share price hammered, including 25% in one day in May. It hasn't helped that Woolworths Limited's (ASX: WOW) closure of Masters and sell off of all lighting stock is having an impact on Beacon.
But the company is forecasting improved sales and profits in FY2017, after recording positive same-store sales growth in the first quarter and rolling out new stores this financial year. At the current price of $1.71 and trading on a P/E of 20.7x, Beacon could well be a cheap buy.
Foolish takeaway
Companies that can generate double-digit growth under many conditions are high quality in my book and deserving of a place in your portfolio.
