Recently, global capital group Canaccord Genuity released its quarterly Australian Focus List. The list is comprised of 13 companies from various sectors on the ASX that Canaccord’s analysts believe offer great potential for future growth.
Here are 3 of the companies from the list that I think are worth taking a look at.
Ausdrill Limited (ASX: ASL)
Ausdrill is one of Australia’s largest mining services companies, involved in exploration, development, surfacing and underground mining. The Ausdrill share price has rallied more than 52% in 2019, after hitting a 52-week low late last year. The company fell out of favour among investors last year after the value of a major contract was slashed, its CEO retired, and profits were downgraded.
The Ausdrill share price has recovered in 2019 on the back of its recently acquired subsidiary Barminco securing a 5-year contract with an underground copper mine in Botswana worth $800 million. Analysts at Canaccord are bullish on the contract win with a pipeline of further opportunities available in Australia and Africa. The positive outlook for gold and iron will also work in favour for the Ausdrill share price. Analysts were cautious, however, over the geographical risk of doing business in Africa and the margin risk of contract execution.
Bigtincan Holdings Limited (ASX: BTH)
Bigtincan is a leading provider of sales enablement automation software, which allows clients to increase sales, reduce expenditure and improve customer satisfaction. Earlier this year, Bigtincan provided a market update regarding the company’s FY19 revenue guidance. The company increased its outlook for revenue growth to be more than 40% for FY19, after initial guidance estimated revenue growth of 35% to 40% for the year. Analysts at Canaccord are bullish on the Bigtincan share price, citing the acceleration in revenue growth, lower operating expenses and weak Aussie dollar as catalysts for future momentum.
Kogan.com Ltd (ASX: KGN)
The share price of online retailer Kogan.com has recovered strongly in 2019, lifting more than 50% this year. The company generated strong earnings growth in the March quarter, which saw revenue growth of 9.5% and a 28.4% lift in profit growth. The number of sales processed through Kogan.com also improved by 17.5%, in comparison to the year prior. In a bid to compete with Amazon.com, Kogan.com launched Kogan Marketplace earlier this year, which allows third parties to sell goods on the platform.
The company’s continued growth in key divisions and its accelerating revenue growth are seen as strong drivers of future performance by Canaccord. However, the analysts see increased competition from Amazon.com and a potentially weaker retail environment as catalysts for weaker traffic to Kogan.com.
Other companies featured on Canaccord’s Focus List for the quarter include AMA Group Ltd (ASX: AMA), Appen Ltd (ASX: APX), Codan Ltd (ASX: CDA), Cooper Energy Ltd. (ASX: COE), Healthia Ltd (ASX: HLA), Money3 Corporation Limited (ASX: MNY), OZ Minerals Limited (ASX: OZL), Primero Group Ltd (ASX: PGX) and Perseus Mining Limited (ASX: PRU).
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Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of BIGTINCAN FPO. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO and Kogan.com 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.