5 stonking growth stocks for the entrepreneurial investor

CSL Limited (ASX:CSL), SEEK Limited (ASX:SEK) and Nanosonics Ltd (ASX:NAN) offer big growth potential.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) has climbed more than 11% over the past year, although much of the heavy lifting has been done by large mining businesses like BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

In fact other businesses have struggled over the past year as many growth shares were sold off in part to fund moves into the mining space as soaring commodity prices fuelled expectations of profit growth and share price gains.

This great rotation means there might now be some good value opportunities amongst high-quality growth shares that some powerful asset managers have sold positions in.

Below I have five growth shares I would look to buy thanks to their exciting outlooks and attractive valuations.

XERO FPO NZ (ASX: XRO) is the fonder-led Kiwi cloud-accounting business that is growing at rapid rates, but yet to post an operating profit due to its marketing and investment spending. However, the business expects to move to profitability within its current cash balance and if it makes good on this promise I expect shares will soar above today's price around $17.75.

SEEK Limited (ASX: SEK) yesterday announced an earnings per share accretive investment for FY 2018 and has serious growth prospects thanks to its ownership interest in China-based Zhaopin, among other international operations. This morning shares sell for $14.84 and look good value to me, despite the competitive threats.

CSL Limited (ASX: CSL) is another growth stock I would suggest anyone with an interest in capital growth watches as it has multiple growth levers via an expanding portfolio of fast-selling drugs alongside plenty more in the research and development stage. The company is also in the middle of another share buy-back with a wide moat that is likely to deliver steady earnings per share growth for investors over the decade ahead.

Nanosonics Ltd (ASX: NAN) is a junior healthcare business I suggest investors don't look far past thanks to its strong sales and global growth horizons. The company sells specialist disinfectant equipment to hospitals and its sophisticated medical products provide a narrow moat for the business to grow. The company's potential is no secret being on a market value around $900 million with shares at $3.05. This is a growth stock to own in my opinion and I expect a little patience may be rewarded by a cheaper share price.

1300 Smiles Limited (ASX: ONT) is the Queensland-based dental surgery aggregator that is founder led and has a formidable track record of growth thanks to its acquisitive and organic growth strategy. 1300 Smiles' share price is up 50% over the past five years and the company's focus on shareholder returns is trumpeted by its CEO who takes a small base salary as he prefers to focus on growing dividend payouts due to his own substantial shareholding. It looks a great small-cap for steady growth over medium term horizons.

Motley Fool contributor Tom Richardson owns shares of CSL Ltd., SEEK Limited, and Xero. You can find Tom on Twitter @tommyr345 The Motley Fool Australia owns shares of Nanosonics Limited and Xero. 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »