Yes, you should try to buy S&P/ASX 200 Index (ASX: XJO) shares at the lowest possible price.
But there is an old saying in investment: don't catch the falling knife.
Buying a stock that's just plunged might seem like a bargain at the time, but there could be a good reason why people are fleeing a burning building.
On the other hand, catching a rising star can make an excellent investment.
While you might have given up some early returns when buying stocks that have already soared, if the business is going places then there will be more to come.
In this spirit, the team at the ECP Growth Companies Fund is proud to keep backing two ASX 200 shares that went gangbusters last month:
Tech company does something it never did before
Megaport Ltd (ASX: MP1) investors were all smiles in April as the technology stock rocketed an unbelievable 36.7%.
The ECP analysts attributed this climb to the third quarter results reported at the end of the month.
"Monthly recurring revenue accelerated in 3Q, growing 14% QoQ," they said in a memo to clients.
"This was driven by higher yield primarily, due to Cloud VXC repricing implemented in March."
The virtual network provider has been a cash-burning growth business for most of its life, but has strived in recent months to be more profitable.
As such, ECP analysts noted that, in the April update, the company did something it had never done before.
"Megaport issued guidance for the first time, expecting EBITDA of $16 million to $18 million in FY23 vs consensus of $9 million, and $41 million to $46 million in FY24 vs consensus of $30 million, driven by cost-cutting initiatives."
The majority of the wider professional community is also celebrating Megaport's turnaround.
According to CMC Markets, eight out of 14 analysts currently rate the stock as a strong buy.
Big contract win, with more to come
Corporate Travel Management Ltd (ASX: CTD) soared 15.8% over the month of April to add 5.2% to its weighting within the ECP fund.
The analysts reckoned investors flocked to the travel stock due to "confidence in FY23 and FY24 guidance", but a certain catalyst also helped.
"The company announced a major multi-year UK government contract that will drive large TTV [total transaction value] outcomes," read the memo.
"This contract will deliver both near-term and longer-term revenues, which given the cost leverage story, should result in substantial profit contributions."
Many of ECP analysts' peers are also loving Corporate Travel Management, with ten out of 17 analysts currently surveyed on CMC Markets rating it as a strong buy.
"Corporate Travel Management has been successful in building a reputation in the government solutions market, and we would expect to see further contract wins over the next few years."
