I've had a look through the research reports from the broking houses this week and have selected three companies tipped to deliver outsized gains over the next 12 months.

Let's see who the brokers like.

Acrow Ltd (ASX: ACF)

Acrow is a construction systems company – think scaffolding, formwork, and the like.

The company recently announced a fully underwritten institutional equity raise to raise $70 million, along with a share purchase plan for another $10 million.

Ord Minnett, in a note to clients over the past week, said the company's goal of paying down debt and restarting its M&A strategy with the $27 million acquisition of Ausgroup and the $25 million acquisition of Preston Superdeck was a positive.

They added:

We view this update positively for a number of reasons: 1) the debt levels of ACF have been an ongoing issue for the company, and the equity raise goes a long way in wrangling the Net Debt/EBITDA multiple to reasonable levels; 2) Ausgroup looks to be a nice bolt-on acquisition, bolstering ACF's presence in North Queensland with industrial access proving to be a solid revenue stream for the group; and 3) Preston Superdeck fills a product gap in ACF's product offering, adding loading platforms to the company's 'one stop-shop' value proposition in the construction services space.

Ord Minnett has a price target of $1.30 on Acrow compared to 93.5 cents currently. If achieved, this would be a 39% return.

Credit Clear Ltd (ASX: CCR)

Morgans has tipped Credit Clear as a company to watch, saying the debt collection business has scope to grow, given its proprietary digital collections platform, which they say is a key differentiator.

The broker said regarding the company:

Since listing in 2020, the group has evolved from a pure-play collections technology business to an increasingly scalable end-to-end contingent collections platform which, in our view, is well positioned to deliver long-term compounding growth both organically and through acquisitive market consolidation.

Morgans said Credit Clear is in a unique position to consolidate the market, which is worth $1.5 billion across Australasia and the UK.

The broker has a price target of 30 cents for the company, compared to 21 cents currently, which would represent a 42.9% return if achieved.

IODM Ltd (ASX: IOD)

Shaw and Partners likes IODM, which is an accounts receivable automation software company.

The broker said a recent deal with TransferMate "materially expands IODM's distribution opportunity across its primary growth region while further strengthening a strategic partnership that has expanded materially over the past 12 months''.

Shaw and Partners said the deal followed the expansion with TransferMate into the US earlier, "reinforcing our view that the relationship is becoming increasingly strategic for both parties''.

Shaw and Partners has a price target of 29 cents for IODM shares, up from 12 cents currently, which would represent a gain of 141.7% if achieved.

The post 3 ASX shares with 39% to 141% growth ahead of them: Experts appeared first on The Motley Fool Australia.

But the team at Shaw and Partners have had a look at the company and initiated coverage with a buy recommendation, while also adding the caveat that it's a high-risk stock.

So what is IODM?

As the Shaw analysts explain, IODM is a provider of accounts receivable software tailored for the education market.

The company apparently has 20 universities in the UK onboarded, or being brought onboard, "and has recently expanded into the US, Canada, Japan, Mexico and South America'', Shaw said.

The company was founded in 2008 and, Shaw said, launched its IODM connect platform in 2021 with a focus on the global education sector.

The Shaw team explained further:

Today, the growth engine is the UK. IODM is demonstrating strong momentum in this market which we believe is only likely to gain further momentum in the years ahead. With a proven platform and reputation, it seems UK universities are increasingly receptive and key foreign exchange payment partners more engaged. Building on the success in the UK, IODM has recently expanded its revenue share agreements to cover four new regions, including the US, and has also introduced a new foreign exchange payment partner, TransferMate, to broaden its reach and introduce some competitive tension. Successful execution beyond the UK could be game changing for the stock.

Growth expected to surge

The Shaw team says the company has a demonstrated track record of customer growth and expects revenue to grow at a compound annual rate of 47%.

The Shaw team added:

We forecast IODM will be cash flow positive in FY27 and Cash EBITDA positive from FY28 onwards, which compares to losing $3.5m in FY25. We believe IODM has reached an inflection where its fixed cost base is covered allowing high incremental margins to be realised. This will be a key milestone for the stock and could lead to a re-rate.

Good news released by the company recently included a deal to provide its platform to one of the "largest international student universities in the UK", although it did not name that entity.

Shaw and Partners has a price target of 23 cents on IODM shares, compared with 15.5 cents currently.

If achieved, the price target would represent a gain of 48.4%.

The company was valued at $92 million at the close of trade on Wednesday.

The post This software firm could deliver almost 50% returns, one broker says appeared first on The Motley Fool Australia.

There's no guaranteed path to turn $5,000 into $55,000, but there are a few strategies I would consider using if I were aiming for such an astronomical return.

Investing in future 10-bagger ASX shares

The first is that which might come to mind quickest – investing in a share, or many, capable of gaining 1,000% or more.

That's certainly possible. ASX shares posting such gains over the last few years include lithium favourite Core Lithium Ltd (ASX: CXO), homewares retailer Temple & Webster Group Ltd (ASX: TPW), and software provider IODM Ltd (ASX: IOD).

In fact, the latter tech share has posted a gain of more than 4,000% over the last five years.

However, identifying future 10-baggers is far more difficult than scrounging up past winners.

If I were hunting for stocks potentially capable of rising 1,000%, I would start my search among the smaller end of town. There, I would look for shares in businesses I truly believe could make it. Personally, I would focus on those boasting a healthy balance sheet and a major competitive edge.

However, investing in stocks that look like they could be future multi-baggers generally demands a lot of patience and time. It also comes with a huge side of risk.

Thus, it's likely that I would miss my 1,000% target or even lose money if some of my picks underperform against my expectations.

Using Peter Lynch's strategy

Another approach I might consider when seeking a 1,000% return by investing in ASX shares would start at the other end of town. That is a strategy touted by investing great Peter Lynch – investing in 'stalwarts'.

Stalwarts are generally larger companies, like S&P/ASX 200 Index (ASX: XJO) shares, that haven't quite met their growth potential. Thus, they may be capable of moderately outperforming the market over a few years.

After a company's expected growth was realised, Lynch would sell out and reinvest in a new stalwart, thereby compounding returns. It's widely reported that Fidelity's Magellan fund returned an annual average of around 29% under Lynch's control.

If I could realise such a return, which is far from guaranteed, I could turn $5,000 into more than $55,000 in around 10 years. That's the power of compounding!

Take advantage of index funds

The final tactic I would consider is buying shares in an index fund tracking the ASX 200. This approach offers the least risk of the three.

Combining capital returns and dividends, the ASX 200 returned 9.3% on average over the 10 years to 2021.

While past performance doesn't indicate future performance, such a return could turn a $5,000 initial investment into $55,000 in 27 years.

The post With $5,000 to invest, I'd aim to make a 1,000% return from ASX shares appeared first on The Motley Fool Australia.

One financial technology company you've likely never heard of has taken its investors on a wild upwards rise over the last five years.

Indeed, its share price lifted 3,500% over that time, soaring from around 1 cent to trade at 36 cents.

Additionally, it hasn't been caught up in 2022's sell off. The stock has lifted around 3% since the start of this year.

Meanwhile, the S&P/ASX 200 Information Technology Index (ASX: XIJ) has dumped 34%.

So, which tiny ASX tech share may have made millionaires out of investors in just five years? Keep reading to find out.

The tiny ASX tech share that turned $30,000 into $1m

The IODM Ltd (ASX: IOD) share price has soared over the last half-decade, turning an initial $30,000 investment into $1 million today.

The $200 million ASX tech share provides technology to automate the accounts receivable process for businesses around the world.

Interestingly, it began life as a mining share before launching into the tech space with the $7 million acquisition of IODM in 2015. Six months later, the company was renamed IODM and the rest is history.

No doubt anyone who bought into the stock in 2017 and held into their investment will be glad of their conviction.

Back then, $30,000 would have bought approximately 3 million IODM shares. Today, that parcel would be worth just over $1 million.

Not to mention, at the ASX tech share's record high of 40 cents, reached in September 2021, 3 million of its shares would be worth a whopping $1.2 million. That's not bad for a $30,000 investment less than four years earlier!

It's also worth noting that, despite 2022's volatility, the broader ASX tech sector has also performed well over the last five years.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) has lifted 51% in that time while the S&P/ASX 200 Index (ASX: XJO) has gained 14.8%.

The post This tiny ASX tech share has turned a $30,000 investment into $1m in just 5 years appeared first on The Motley Fool Australia.

Shares in the software company are flying after announcing a material contract earlier today.

At the time of writing, the IODM share price has been sold down and is trading around 14% higher for the day at around 25.5 cents. Shares in the company were flying 32% higher earlier today after hitting an intra-day high of 29 cents per share.

Lets take a look at what IODM announced and why investors are rushing to buy shares in the company.

IODM share price surges on first Education client in UK

Earlier today, IODM announce that the company has signed its first client in the UK.

According to the announcement, the transactional contract represents more than 30% of the company's last reported full year revenue. IODM reported revenue in FY20 of approximately $0.645 million.  

The service level agreement which focuses on the education sectors is set for a term of up to 5 years. IODM noted that the signing comes via the Global Partnership agreement with Western Union Business Solutions (WUBS).

The new contract will allow WUBS to provide the IODM platform to existing and new clients in the Education sector in the UK.

According to the announcement, the total assessable market for the education sector is worth an estimated $118.6 million in revenue per annum. IODM noted that the company's target market, being WUBS existing business, has an achievable revenue market of $57.7 million per annum.

IODM's management noted that the announcement reflects the long-term positioning of the company's accounts receivable (AR) solutions. In addition, the company will continue to market its services in other sectors which includes healthcare and related industries.

More on IODM

IODM software solutions uses digital technology to optimise automation.

The company's software solutions provide an end-to-end AR process that supports customers with invoicing, query management, payment reminders and analytics. IODM's solutions are customisable, allowing for increased client productivity and timely payments while reducing costs and minimising human error.

The IODM share price has performed strongly in 2021. Including today's price action, the IODM share price is up more than 55% for the year.

The post Why the IODM (ASX:IOD) share price surged 32% higher today appeared first on The Motley Fool Australia.