With the prospect of a global recession heightening, it’s important to have stocks in your portfolio with a strong likelihood of outperforming. Here are three ASX companies with defensible positions that are my picks for the long-haul.
Aristocrat Leisure Limited (ASX:ALL) is a developer and designer of gaming machines, video lottery terminals and casino-management systems. The Aristocrat share price has grown steadily over the last 6 months, jumping 21.2% higher to $31.40 as of Tuesday afternoon.
At its half-year mark at the end of March, Aristocrat grew its bottom line by 16.8%, with EBITDA up 10.2%. This is a result of its continual commitment to innovation, having launched several new gaming machines, games and supporting products. Its acquisitions of Plarium and Big Fish Games have also diversified the company’s revenue streams, accounting for 37% of growth in digital.
This company should be one to watch before its FY19 results announced next month.
Altium Limited (ASX: ALU) offers a design software product for building printed circuit boards. Investment returns for this ASX tech stock have been extremely volatile in the past 6 months, dropping to as low as $29.21 in June before hiking up to $37.97 last month. Despite this short-term price correction, the share price closed at $33.11 on Tuesday which still represents a 53.2% gain in the year-to-date.
At its FY19 results, Altium reported positive earnings with NPAT up 41%. This was driven by the growth of its world-class product, Altium Designer, with profit margins reaching almost 40%. The company also operates debt-free, allowing the software company to invest its cash into R&D and aggressive scaling as Altium aims to lead the market in 2020.
With a healthy balance sheet, recurring revenue with high margins and strong international growth, this company is bound to be a winner in the long-term.
Opthea Ltd (ASX: OPT) develops biological therapeutics for eye diseases, particularly those associated with blood & lymphatic vessel growth and vascular leakage.
This biotech firm has kept under the radar this year, before rocketing 271% higher to $3.23 in just 2 months.
The driving factor behind this inflection point is the success of its recent clinical trials. Opthea has developed a molecular treatment called OPT-302, which targets wet age-related macular degeneration. Its results reflected the superiority of Opthea’s treatment compared to current market offerings.
Though the company is still in its infancy and made a loss of $20.9 million and revenue of $914,800 in FY19, yet data compiled from its clinical trials yield stark successes. This will be one to watch in its journey to commercialisation.
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Audrey Thehamihardja has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia has no position in any of the stocks mentioned. 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.