There are a good number of quality shares on the ASX which I believe could generate strong returns over the next 12 months and beyond.
Ten of my favourites which I think could provide market-beating returns between now and this time in 2020 are listed below. Here’s why I think growth investors ought to buy them for 2020:
a2 Milk Company Ltd (ASX: A2M)
a2 Milk Company is a New Zealand-based fresh milk and infant formula company. I’m a big fan of the company due to its strong long-term growth potential thanks to increasing demand for its infant formula products in the massive China market and its fresh milk opportunity in the United States.
Altium Limited (ASX: ALU)
Altium is a printed circuit board (PCB) design software provider which looks set to be a big winner from the Internet of Things boom. According to research by IDC, worldwide technology spending on IoT is expected to reach a massive US$1.2 trillion by 2022. And as the majority of IoT devices have PCBs inside them, I expect this to lead to increasing demand for its award-winning software.
Appen Ltd (ASX: APX)
Appen is a leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence. It has been growing at a very impressive rate over the last few years thanks to the explosive growth in artificial intelligence and machine learning spending. With these markets expected to continue their strong growth for many years to come, I believe Appen is well-placed to deliver above-average growth over the next decade.
Cochlear Limited (ASX: COH)
Cochlear is a global developer, manufacturer, and distributor of cochlear implantable devices for the hearing impaired. I believe it is perfectly positioned for long term growth thanks to its exposure to the ageing population tailwind. This is because as people age their hearing will more often than not fade. I expect this to lead to increasing demand for its industry-leading products.
CSL Limited (ASX: CSL)
CSL is a biotherapeutics giant which I believe is one of the best long-term investment options on the local market due to the quality and strength of its CSL Behring and Seqirus businesses. CSL Behring is the global leader in plasma therapies and Seqirus is the second biggest influenza vaccines company globally. Due to their leading products and growing pipeline, I believe CSL can continue growing its bottom line at a strong rate over the long term.
LiveTiles Ltd (ASX: LVT)
LiveTiles is one of my favourite small cap tech shares. It provides a digital workplace platform that allows users to easily create dashboards, employee portals, and corporate intranets. It has been experiencing increasingly strong demand for its platform, leading to a 167% increase in annualised recurring revenue (ARR) to $40.1 million in FY 2019. Management is now aiming to grow its ARR organically to $100 million by the end of June 2021.
Nearmap Ltd (ASX: NEA)
Nearmap is a leading aerial imagery technology and location data company. In FY 2019 the company reported record annualised contract value (ACV) of $90.2 million. This was a 36% increase year on year and was driven largely by further explosive growth in the United States. New product launches and potential expansions could drive similarly strong growth in FY 2020.
REA Group Limited (ASX: REA)
REA Group is the owner and operator of the realestate.com.au website and several international equivalents. I believe it is a great buy and hold investment option due to the quality and strength of its business model and its solid long term growth potential.
ResMed Inc. (ASX: RMD)
ResMed is a medical device company which is focused on sleep treatment solutions. It is one of my favourite buy and hold options due to the quality of its products and its growing market opportunity. Management estimates that there are 1 billion people impacted by sleep apnoea worldwide, but the vast majority of these people are undiagnosed.
Webjet Limited (ASX: WEB)
Webjet is one of the world’s leading online travel agents. It has been one of the best performers on the ASX over the last decade, generating an average total return of 27.4% per annum over the period. Thanks to its popular brands, the shift to online booking, and acquisition opportunities, I believe it could outperform the market again over the next decade.
Where to invest $1,000 right now
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*Returns as of February 15th 2021
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia owns shares of A2 Milk and Appen Ltd. The Motley Fool Australia has recommended Cochlear Ltd., LIVETILES FPO, REA Group Limited, ResMed Inc., and Webjet 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.