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Most investors find it challenging to find companies with prospective double-digit growth rates that are also financially robust. These hidden gems also add meaningful upside to a portfolio, should the companies meet expectations. Investment in growth companies can benefit your current holdings, whether it be in established tech giants or undiscovered micro-caps. Here, I’ve put together a few companies the market is particularly optimistic towards.
Pinnacle Investment Management Group Limited (ASX:PNI)
Pinnacle Investment Management Group Limited operates as an investment management company in Australia. Started in 1895, and currently lead by Ian Macoun, the company size now stands at 125 people and with the company’s market capitalisation at AUD A$659.24M, we can put it in the small-cap stocks category.
PNI’s forecasted bottom line growth is an optimistic double-digit 33.15%, driven by the underlying double-digit sales growth of 43.47% over the next few years. 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 42.65%. PNI’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. Should you add PNI to your portfolio? Other fundamental factors you should also consider can be found here.
Temple & Webster Group Limited (ASX:TPW)
Temple & Webster Group Limited engages in the online retail of furniture, homewares, and other lifestyle products in Australia. Established in 2011, and run by CEO Mark Coulter, the company provides employment to 100 people and with the stock’s market cap sitting at AUD A$59.66M, it comes under the small-cap category.
TPW’s projected future profit growth is an exceptional triple-digit, with an underlying 39.08% growth from its revenues expected over the upcoming years. An affirming signal is when net income increase also comes with top-line growth. Even though some cost-reduction initiatives may have also pushed up margins, in the case of TPW, it does not appear extreme. This prospective profitability should trickle down to shareholders, with analysts expecting the company to generate a high double-digit return on equity of 22.04%. TPW ticks the boxes for robust growth generation on all levels of line items, which makes it an appealing stock to dig into deeper. Thinking of investing in TPW? Check out its fundamental factors here.