Stocks that are expected to significantly grow their profitability in the future can add meaningful upside to your portfolio. Altium and iCar Asia are examples of many high-growth stocks that the market believe will be upcoming outperformers. Below I’ve put together a list of great potential investments for you to consider adding to your portfolio if growth is a dimension you would like to firm up.
Altium Limited (ASX:ALU)
Altium Limited develops and sells computer software for the design of electronic products in the United States and internationally. Established in 1985, and currently run by Aram Mirkazemi, the company employs 410 people and with the company’s market cap sitting at AUD A$2.64B, it falls under the mid-cap stocks category.
Driven by the positive double-digit sales growth of 40.71% over the next few years, ALU is expected to deliver an excellent earnings growth of 22.52%. Profit growth, coupled with top-line expansion, is a positive indication. This is because net income isn’t artificially inflated by unsustainable activities such as one-off cost-reductions expected in the future. We see this bottom-line expansion directly benefiting shareholders, with expected return on equity coming in at a notable 31.79%. ALU ticks the boxes for robust growth generation on all levels of line items, which makes it an appealing stock to dig into deeper. Interested to learn more about ALU? Check out its fundamental factors here.
iCar Asia Limited (ASX:ICQ)
iCar Asia Limited develops and operates Internet-based automotive portals in South East Asia. Founded in 2012, and currently run by Hamish Stone, the company provides employment to 390 people and with the company’s market cap sitting at AUD A$100.11M, it falls under the small-cap category.
Extreme optimism for ICQ, as market analysts projected an outstanding earnings growth rate of 61.36% for the stock, supported by an equally strong sales. An affirming signal is when net income increase is supported by top-line growth. Since net income isn’t artificially inflated by one-off initiatives such as cost-cutting, we know this profit growth is more likely to be sustainable. Furthermore, the 68.64% growth in operating cash flows indicates that a large portion of this earnings increase is high-quality, day-to-day cash generated by the business, rather than one-offs. ICQ’s bullish prospects on both the top and bottom lines make it an interesting stock to invest more time to understand how it can add value to your portfolio. Interested to learn more about ICQ? Have a browse through its key fundamentals here.