Outside of my portfolio holdings, I have a watchlist of around 25–30 shares I like to keep tabs on. I don’t follow them everyday, or even every week, but usually just absorb any major announcements released by the companies. Over time, this allows me to better understand the companies and their trajectories. This way, when I have cash to deploy and I want to invest outside of my current holdings, I can turn to my watchlist shares.
Below are 4 of my favourite shares that are currently sitting on this watchlist.
Tassal Group Limited (ASX: TGR)
Since listing on the ASX in 2003, Tassal Group has grown to be the largest producer of Tasmanian Atlantic Salmon and has recently added tiger prawns to its portfolio. This adds both geographic and species diversification.
Based on revenue, Tassal currently exports 18% of its product. The rest is consumed by domestic wholesale and domestic retail, with the domestic retail segment accounting for 49%, indicating a rising demand for locally grown fish.
Tassal grew its harvest tonnage by around 7% and revenue by 15.7% in FY19.
I like its continued growth, increased diversity of portfolio and tidy dividend yield of 4.12% (4.56% grossed-up).
Corporate Travel Management Ltd (ASX: CTD)
It appeared nothing could stop Corporate Travel’s share price as it rose to an all-time high of $33.87 in 2018, rising more than 3 times in as many years. However, following a short seller report from VGI Partners in late 2018 and guidance below market expectations in 2019, the share price has been compressed to sit at $21.86 at the time of writing.
However, I still like Corporate Travel – it is still growing rapidly by acquiring smaller firms in a fragmented global market. It has also confirmed guidance for earnings before interest, tax, depreciation and amortisation growth of 10–16.5% on the prior year. In FY19, CTD managed to grow its revenue by 21%, generating more than 70% of this outside of the ANZ region.
Corporate Travel is also a net saver for its customers, which makes it easy to see how it can win clients and gain market share.
Audinate Group Limited (ASX: AD8)
Audinate’s Dante platform distributes digital audio signals over computer networks and is the leading provider of professional digital audio networking technologies globally.
During 2019, Audinate grew rapidly with revenue growth of 34%, which converted to 44% thanks to a falling Australian dollar. However, Audinate reported its market share of the audio market to be estimated at only 7%, which leaves plenty of room for further growth in my opinion, especially after its recent expansion into Germany, Japan and China in FY19.
Audinate has been developing training courses to make its products more accessible. The company is also looking to double its engineering and R&D functions over the next 2 years and expand its total addressable market with the addition of video and software products.
Medical Developments International Ltd (ASX: MVP)
Medical Developments develop and distribute the pain-relieving drug ‘Penthrox’. This is more commonly known as the green whistle and is used by industries from ambulances and life savers to the defence force.
In 2019, global sales grew 47%, with huge growth in Europe of 401% where it added almost 400 new customers. The company noted it is pending FDA approval in the huge US market, which if approved would help continue its growth profile.
With the product boasting 30+ years of safe use in Australia and continued adoption abroad, it appears the demand for its flagship product will continue to remain strong.
As an additional benefit MVP also develop medical respiratory devices, which have seen strong sales growth in both Asia and the USA of 111% and 62%, respectively.
Keeping a relatively small list of ASX companies to watch is a great way to find that next investment. The above 4 ASX shares are on my watchlist and I will be keeping an eye on them in 2020.
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Michael Tonon has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Medical Developments International Limited. The Motley Fool Australia has recommended AUDINATEGL FPO. 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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