The S&P/ASX 200 index was in fine form in 2019, ending the year with a return of just over 20% excluding dividends.
Whilst the majority of shares on the index raced higher, a number climbed more than most.
Here’s why these were the best performing ASX 200 shares in 2019:
AVITA Medical Ltd (ASX: AVH)
The AVITA Medical share price was the best performer on the ASX 200 in 2019 with a 696% gain. Investors were buying AVITA’s shares due to the strong sales growth of its RECELL System. The FDA-approved RECELL System is indicated for use in the treatment of acute thermal burns in patients 18 years and older. It is used to prepare Spray-On Skin Cells using a small amount of a patient’s own skin, which provides a new way to treat severe burns, while significantly reducing the amount of donor skin required. The company has experienced very strong demand for the product, leading to it posting first quarter sales of $7.9 million. This was a 165% increase on the prior corresponding period. Investors were so impressed they tipped in $120 million through an institutional placement. These funds will be used to support its US growth and the pipeline development of new indications.
Polynovo Ltd (ASX: PNV)
The Polynovo share price was some way behind as the next best performer with a gain of 231%. The catalyst for this strong gain has been its very promising NovoSorb Biodegradable Temporising Matrix (BTM) product. The NovoSorb BTM product is a dermal scaffold for the regeneration of the dermis when lost through extensive surgery or burns. Sales have been growing very strongly and look set to continue doing so in 2020. The medical device company recently announced that NovoSorb BTM has been granted a certificate of conformance (CE Mark) approval for sale throughout UK/Ireland and the European Union. Management believes this as a watershed moment for PolyNovo.
EML Payments Ltd (ASX: EML)
The EML Payments share price wasn’t far behind with an impressive 205% gain in 2019. The payments company’s shares were on fire last year thanks to its strong performance and a major acquisition. EML Payments delivered a 37% increase in revenue and a 283% lift in net profit after tax in FY 2019. Pleasingly, its strong growth is forecast to continue in the new financial year. Management has provided guidance of EBITDA growth of 29% to 42%, excluding acquisitions. Speaking of which, the company recently made the game-changing acquisition of Ireland-based Prepaid Financial Service for $423 million. Prepaid Financial Services diversifies EML Payments’ offering through prepaid payments, digital banking capabilities, and other flexible software solutions to financial and non-financial institutions. The acquisition is expected to be significantly accretive to earnings in the future.
Fortescue Metals Group Limited (ASX: FMG)
The Fortescue Metals share price was a very strong performer in 2019 with a 178.2% gain. This strong gain has been driven by a sharp rise in the price of iron ore due to a combination of solid demand and supply disruptions. Also supporting its shares has been management’s focus on improving the grade of its iron ore. This has allowed Fortescue to benefit even more from the higher prices and generate significant free cash flows. As a result, it was able to pay down debt and reward shareholders with generous dividends.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited. The Motley Fool Australia has recommended 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.