Over the last few years a number of growth shares such as Afterpay Touch Group Ltd (ASX: APT), Altium Limited (ASX: ALU), and Appen Ltd (ASX: APX) have emerged and generated significant wealth for shareholders.
As I mentioned here yesterday, anyone lucky enough to have invested $10,000 in Appen shares just three years ago would have seen that investment grow to be worth over $100,000 today.
While I think all three of these shares are capable of providing market-beating returns again over the next few years, I don’t think they will beat the market by anywhere near the same margin.
This could mean it’s worth considering picking up a few emerging growth shares that have yet to take off fully.
Three potential growth stars of the future are listed below. Here’s why I like them:
Bravura Solutions Ltd (ASX: BVS)
Bravura is a fintech company providing software to the wealth management and funds administration industries. I believe it could be a great long-term investment thanks to the increasing popularity of its Sonata wealth management platform and its sizeable market opportunity. In FY 2108 Sonata revenue increased 32%, meaning it now accounts for 55% of group revenue. Due to its strong sales pipeline, further growth is expected in FY 2019 with management predicting EPS growth in the mid-teens.
Citadel Group Ltd (ASX: CGL)
Citadel Group is a software and services company specialising in secure enterprise information management in complex environments. The main attraction to the company for me is its Citadel-Information Exchange (Citadel-IX) product. Citadel-IX is a modular SaaS platform designed to provide both domestic and international customers with secure, flexible options to manage their enterprise information. Given the importance of data security and the growing amount of data we are creating, I believe demand for the product will continue to increase and underpin its overall earnings growth over the coming years.
Megaport Ltd (ASX: MP1)
Megaport was founded by Bevan Slattery, who previously had founded data centre operator NEXTDC Ltd (ASX: NXT) and connectivity services provider Superloop Ltd (ASX: SLC). It is a provider of elastic interconnection services across data centres globally. This service allows its customers to increase and decrease their available bandwidth in response to their own demand requirements instead of being tied to fixed service levels on long-term and expensive contracts. Earlier this month Megaport released its global update which revealed that in the second quarter of FY 2019 the company increased its reported revenue by 21% to $8.3 million and monthly recurring revenue by 14% quarter on quarter. With the cloud computing boom continuing to accelerate, I believe Megaport is well-positioned to continue this above average growth for some time to come.
These 3 stocks could be the next big movers in 2020
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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of A2 Milk, Altium, Appen Ltd, and Bravura Solutions Ltd. 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 Scott Phillips.