If you have a higher than average tolerance for risk, then you might be interested in adding a growth share or two to your portfolio this month.
But given the high number of quality options to choose from on the ASX, it can be hard to decide which ones to buy.
To narrow things down I have picked out three which I believe can be long-term market-beaters. They are as follows:
Altium Ltd (ASX: ALU)
I think this printed circuit board design software platform provider is one of the best buy and hold options on the local share market. You only need to look at its FY 2019 results to see why. This week the company reported a 22.6% lift in full year revenue to US$171.8 million and a 41.1% increase in net profit after tax to US$52.9 million. This was driven by increasing demand for its software thanks largely to the proliferation of the Internet of Things. The good news is that management isn’t resting on its laurels. It reiterated its aim of growing its revenue to US$500 million by FY 2025. Given the quality of its software and operations, I wouldn’t bet against the company achieving this.
REA Group Limited (ASX: REA)
This property listings company could be a great buy and hold investment due to the quality of its business model and its positive long-term outlook. In FY 2019 REA Group posted an 8% increase in revenue to $874.95 million and a 6% lift in net profit from core operations to $295.5 million. It achieved this despite significant pressure on listing volumes in the key Melbourne and Sydney markets. But with the housing market appearing to have hit the bottom of its cycle, it could be onwards and upwards for listing volumes from the second half of FY 2020. Combined with price increases and new revenue streams, I believe this could lead to above-average earnings growth over the next 10 years.
ResMed Inc. (ASX: RMD)
Another company that was an impressive performer in FY 2019 was ResMed. It continued its strong form by delivering further robust growth in revenue and profits thanks to strong demand for its sleep treatment products and services. And given the quality of its products and the large number of sleep apnoea sufferers that are yet to be diagnosed, I believe it still has a significant runway for growth. All in all, I expect this to make ResMed a market-beater over the next decade.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended REA Group Limited and ResMed Inc. 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.