Many investors will look to the mid-cap or emerging companies end of the ASX in pursuit of the best risk-adjusted growth shares as it's there where companies are still small enough to have room to double in size over time, but not so small that they fall into the volatile and little covered small cap end of the market.
One professional fund manager focused on 'emerging companies' is Melbourne-based Flinders Investment Partners that runs a an Emerging Companies Fund that is 0.8% behind the S&P/ ASX Small Ordinaries Accumulation index since its inception in September 2015.
Let's take a look at what it describes as its top 5 'active' stocks as at January 2019 (in alphabetical order).
- Bingo Industries Ltd (ASX: BIN) is the waste management group attempting to get its blockbuster takeover offer for Dial-a-Dump-Industries over the line with the ACCC. Bingo shares are up about 30% in 5 years.
- Reliance Worldwide Corp (ASX: RWC) is a plumbing parts business with an innovative fitting solution that has driven sales growth for several years. However, it recently warned that its $280 million to $290 million full year EBITDA guidance range was dependent on a stronger second half and amenable weather conditions in the U.S.
- Service Stream Limited (ASX: SSM) provides telco infrastructure services across Australia in maintaining physical networks and mobile towers among other pieces of infrastructure. Like Bingo and Worldwide it's also pursuing an aggressive growth by acquisition strategy.
- Smartgroup Corporation (ASX: SIQ) shares are up around 6x in five years from $1.55 to $9.84 and this provider of outsourced fleet management and software services deserves a place on investors' watch lists by virtue of its performance alone.
- Webjet Limited (ASX: WEB) is the online travel services provider focused in the business-to-consumer space via its eponymous website. It's crown jewel though is probably its business-to-business digital middleman block hotel booking online services. However, one cloud on the horizon has been its ex-auditor's initial refusal to sign off on its accounts, which may be putting the market off the business for now.
