As we embark on the final week of this August reporting season, it's a nice time to reflect on some of the winners and losers so far. Are these three ASX 200 growth stories a buy after delivering a strong full-year result?
CSL Ltd (ASX: CSL)
CSL is the gift that keeps on giving and a vital lesson to all investors that a high PE or valuation does not necessarily mean the company is too expensive or unbuyable. The company delivered its full-year results earlier this month, beating market expectations with a 17% increase in net profit after tax and 11% increase in revenue. CSL reaffirmed the market that its NPAT growth is anticipated to be within the range of approximately 7% – 10% or between $2,050 – $2,110 million. This growth takes into account the one-off financial headwind of transitioning to a new model of direct distribution in China which will reduce sales revenue by approximately $340 – $370 million. If we ignored the one-off financial headwind, this places CSL's NPAT growth closer to 25% for FY20. I believe the quality of CSL speaks for itself and investors should pay close attention to any opportunities that may emerge.
Altium Limited (ASX: ALU)
Another market darling that reported strong growth figures during reporting season, Altium expanded profit margins to record levels with a 41% increase in net profit after tax and EPS growth of 41%. The company continues to grow momentum across all KPIs including its market share within the printed circuit board (PCB) market and delivering record revenue growth in China.
Altium is confident in achieving its 2020 target of US$200 million revenue (FY19: $171.8m) with an EBITDA margin floor of 37%. It is also committed to achieving 100,000 Altium Design subscribers before 2025 (FY19: 43,698) for market dominance and to an aspirational revenue goal of US$500 million in 2025. I believe there is significant upside for investors if Altium can achieve its longer-term targets.
Wisetech Global (ASX: WTC)
Much like CSL, it is those high quality, well-run, sector-leading businesses that are outperforming irrespective of market noise and valuation. Wisetech delivered a strong result with revenues soaring 57%, net profit up 33% and EPS up 27%. The company provided a FY20 guidance with revenue growth to be in the range of 26% – 32% and EBITDA growth between 34% – 42%. The report reiterated Wisetech's relentless pursuit in leveraging the digital transformation for global logistics and a clear focus on further international reach and complex cross-border compliance.
Foolish Takeaway
The market will experience further turbulence in the coming weeks given the escalation of the US-China trade war and the inverted yield curve. This could present an opportunity for these shares to trade at a more comforting valuation. Investors that take a long-term view on these market leaders should pay close attention.
