The ASX 200 has witnessed a pullback recently on many leading growth shares, such as the WAAAX stable and those shares in the BPNL sector. Here are 3 more ASX growth shares in the tech space that I am waiting to buy on a pullback.
1. Electro Optic Systems Holdings Ltd (ASX: EOS)
Electro Optic Systems continues to be one of my top picks as both a strong growth story and a long term fundamental play. The company operates in the Aerospace and Defence markets, involved in the development, manufacturing and sale of telescopes, dome enclosures, laser satellite tracking systems and remote/optic fire control systems.
In the company’s recent HY19 results, it saw revenues soar 62% to $57.4 million, while net profit after tax jumped 40.8% to $7.5 million. It also provided commentary on its outlook and forecast, stating:
EOS expects a stronger second-half result based on further improvements in capacity utilisation. However, this improvement will be largely offset by significant investments the company must now allocate from management, engineering and production resources to prepare for the next stage of growth.
The company forecasts that this initiative in streamlining its production will see a “capacity increase of 300% over the period 2020-2024, to achieve over $900 million in annual production capacity.” I believe the company’s growth capabilities and initiatives make it a very strong long-term stock.
In recent news, EOS acquired a space communications company called EM Solutions (EMS). As a result of this acquisition, EOS now expects 2020 EBIT to be 10% higher from the EMS contribution. The combined customer set of EOS and EMS extends their market reach in space communication products by over 50%.
2. Xero Ltd (ASX: XRO)
The Xero share price raced to all-time highs last week, briefly touching $70. The share prices of its WAAAX peers Afterpay Touch Group Ltd (ASX: APT) and WiseTech Global Ltd (ASX: WTC) have tumbled following broker downgrades and short seller attacks, but the Xero share price has been largely unscathed. Xero currently trades at approximately 17 times FY19 revenue and is quietly racing away.
The company continues to make significant strides in its growth story with a solid compound annual growth rate of 30% for revenue across 5 years. Xero is expected to deliver its HY20 results on November 7.
3. Dubber Ltd (ASX: DUB)
Dubber is the smallest company out of the three, in terms of market capitalisation. However, Dubber presents a unique opportunity in the call recording industry. Call recording is traditionally characterised by things like fixed capacity, expensive capital upkeep and lengthy deployment. Dubber aims to disrupt this industry with its cloud recording software that has zero capital expenditure, unlimited scale, unlimited storage and rapid deployment.
Its emerging technology has seen it deliver record financial growth and attract leading clients such as AT&T and Spark NZ. The company recently completed a capital raising and has a cash position of $19.6 million in the bank. I believe Dubber presents a good long-term investment.
While you're waiting to see if these shares pullback, take a look at this report on top dividend stocks for 2020.
When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.
In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.
Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.
Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. 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.