I'm always on the lookout for quality growth companies that trade at a decent price and given the ASX's stellar run this year, my job has become increasingly hard. However, it's important to note that there are still plenty of bargains out there and here are four stocks that I've identified as potential candidates for my $10,000 portfolio.
But before I tell you the names of these companies, I would just like to stress how important it is to keep a balanced portfolio. Investors should try to maintain a mix of both high-growth stocks and stable companies with a reliable stream of income growth, ensuring that they're receiving the best of both worlds.
1. Bentham IMF
Litigation funder Bentham IMF Ltd (ASX: IMF) generates the bulk of its revenues from Australia. With an outstanding average win rate of 96% over the past 12 years, its ability to pick out quality cases proves to be a significant competitive advantage. Furthermore, its expansion into the lucrative U.S market is starting to gain traction as it builds more offices in Los Angeles and New York. Its current price of $2.15 means it trades on 10 times FY15's projected earnings, a very attractive valuation indeed.
2. Veda
Veda Group Ltd (ASX: VED) has experienced some strong growth in the past few months as investors start to realise its long-term potential. Given our record low interest rate environment, Veda should continue to benefit from stronger credit growth. Its massive collection of data on consumers and businesses also gives it a competitive advantage that is hard to replicate. I think Veda is set for uninterrupted growth in the next few years and is definitely a stock you should consider if you have some spare cash.
3. Cover-More
Australia's leading travel insurance business Cover-More Group Ltd (ASX: CVO) made its entrance into the ASX late last year. Despite being a newbie to the Australian sharemarket, it's had more than 25 years of experience in providing travel insurance to Australians. Cover-More owns a healthy 46% chunk of the travel insurance business and has established an excellent brand reputation in the past few years. With earnings expected to grow at an annualised rate of 36.9% in the next two years, Cover-More seems to be all set for some quality growth.
4. Flight Centre
We can't talk about travel service providers without mentioning Australia's favourite travel agency Flight Centre Travel Group Ltd (ASX: FLT). Like Cover-More, Flight Centre has built strong customer relationships through its reputable brand image. Flight Centre's endeavours to mix its online businesses with its bricks-and-mortar stores has also been highly successful and is by far the swiftest transition compared to its peers. Despite weaker consumer confidence, Flight Centre continues to grow earnings modestly and sits on an attractive price-to-earnings ratio of 17.
