Despite global economic unrest driving volatility in the Australian share market, 2019 has still delivered stellar returns for some lucky shareholders.
Afterpay Limited (ASX: APT) shares continued their winning ways throughout 2019, and look set to close out the year up almost 150%. Fellow tech darling Appen Limited (ASX: APX) also had a strong 2019, with its shares up around 85%.
But the gains haven’t just been restricted to the technology space: personal care company BWX Ltd (ASX: BWX) and iron ore miner Fortescue Metals Group Limited (ASX: FMG) have both had bumper years, with their share prices soaring a staggering 190% and 160% higher, respectively.
Predicting which companies will outperform next year is a difficult exercise – no investor has a crystal ball (no matter how certain they may seem in their forecasts). However, here are 3 ASX companies that have already laid solid foundations for future growth – so much so that 2020 might even end up being their breakout year.
Carsales.Com Limited (ASX: CAR)
Even though the Carsales share price has risen close to 60% this year – even recently touching on an all-time high price of $17.55 – I still think the company has plenty of room to grow. Group revenues for FY19 were up 11% to $418 million – a solid result in itself. But what should be most pleasing for Carsales shareholders was the double-digit constant currency revenue growth the company was able to achieve in every one of its international businesses. If it can back that performance up in 2020 expect to see the Carsales share price climb even higher.
EML Payments Ltd (ASX: EML)
Many investors may think that 2019 was the breakout year for payment solutions provider EML. The EML share price soared over 200% higher after it delivered revenue growth of 37% to $97.2 million for FY19. EBITDA was up 40% to $29.1 million, with a healthy 60/40 percentage split between organic growth and that driven by acquisitions.
But I think 2020 may be an even better year for EML as more investors start to take note of the company’s incredible growth story. The company’s financial performance for the first quarter of FY20 has already been strong, and management has forecast full year revenue growth of between 19% and 36% to $116 million to $132 million, despite the negative impact declining interest rates are set to have on interest income.
Bubs Australia Ltd (ASX: BUB)
After a six month-long purple patch in which the Bubs share price soared over 300% to a new all-time high of $1.615, the organic baby foods manufacturer has underperformed for most of the second half of 2019. This is despite the fact that the company recently launched into Vietnam and signed a distribution agreement for a new premium adult goat dairy brand called Deloraine with Chinese ecommerce giant Alibaba. Capital raisings from institutional and retail investors at a price of $0.95 per share have so far diluted the Bubs share price, but with cash in the bank and potential new revenue streams from Asian markets, 2020 might just be Bubs’ best year yet.
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Rhys Brock owns shares of AFTERPAY T FPO, carsales.com Limited, and BUBS AUST FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and Emerchants Limited. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended BUBS AUST FPO, carsales.com Limited, and Emerchants Limited. 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.