Growth stocks bounced back handsomely in 2019 following a global sell-off in the segment 12 months ago.
On the ASX, WAAAX stocks WiseTech Global Ltd (ASX: WTC), Altium Limited (ASX: APT) Afterpay Ltd (ASX: APT), Appen Ltd (ASX: APN) and Xero Limited (ASX: XRO) hit radical highs as investors scrapped for shares in high-growth companies.
However, the largest tech stocks on the ASX have come under pressure recently, as analysts squabble over price-to-earnings multiples and fair value estimates.
So, here are 3 other quality ASX growth shares you should watch in 2020 instead.
Ingenia Communities Group (ASX: INA)
Ingenia own, develop and manage a portfolio of senior lifestyle communities and family holiday parks across Australia. The company generates revenue from rental income, deferred management fees and the sale of manufactured homes.
Ingenia had a strong performance in 2019 with the company’s share price soaring more than 73% for the year and is currently trading near all-time highs. Ingenia also exceeded guidance for the 3rd consecutive year when the company reported its earnings for FY19. Highlights of the financial year included a 26% increase in earnings before interest and tax (EBIT) to a record $61.5 million, and a 21% increase in revenue of $228.7 million.
Ingenia was also rewarded for its consistent performance in 2019 by being added to the ASX 200 in the December quarterly rebalance. Ingenia boasts a high rental occupancy rate and the company plans on completing a further 336 new homesites in FY20. The company has been a silent achiever and is well poised to blossom in 2020.
Audinate Group Ltd (ASX: AD8)
The Audinate share price more than doubled in 2019 and could have further to go in 2020. Despite the company’s share price surging, some analysts think that investors are still underestimating the complexity of the problem Audinate is addressing.
Audinate provides hardware and software solutions to the audio-visual (AV) market. The company’s flagship and award-winning Dante program is a global leader in AV connectivity, eliminating the need for traditional analogue connections by transmitting synchronised audio signals across large distances via IP networks.
The platform is used extensively across the professional live sound, commercial installation, broadcast, public address, and recording industries globally. In addition to partnerships and a pipeline of more products, Audinate also looks to expand its sales and support team and accelerate market penetration in 2020.
PointsBet Holdings Ltd (ASX: PBH)
Pointsbet listed on the ASX in June last year at $2.00 and soared more than 135% in 2019. Pointsbet provides online sports and racing betting services via its cloud-based platform and the company’s share price has absolutely surged in 2019, reflecting its growth prospects.
In addition to the Australian market, Pointsbet is also targeting expansion into the US. The US Supreme Court recently overturned legislation that banned sports betting in the US, providing an opportunity for platforms like PointsBet. The commercialisation of legal online sports betting in the US provides Pointsbet with a runway of opportunity in 2020.
In my opinion, global markets look set to favour growth stocks in 2020 until volatility picks up again. I think that the companies listed here offer great exposure to new and exciting sectors poised for growth in the future. A prudent strategy would be to keep these companies on a watchlist and undertake further research before making an investment decision.
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Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and AUDINATEGL FPO. The Motley Fool Australia owns shares of Altium, WiseTech Global, and Xero. The Motley Fool Australia has recommended AUDINATEGL FPO and Pointsbet Holdings Ltd. 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.
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