It's a well known saying – don't put all of your eggs in one basket! For the sharemarket investor, it not only means spreading your risk by investing in different companies but also companies within different industries.
Here are 5 stocks you can consider to provide a broad exposure to some of the fastest growing industries in the market:
- REA Group Limited (ASX: REA) has been one of the best performing companies over the last decade. The recent fall in the share price has offered many investors an opportunity to finally buy shares at a decent price. Analysts are expecting earnings growth of around 30% over each of the next two years and I feel the market has over-reacted to temporary bad news. The current price to earnings ratio (P/E) of 26 is justified considering the growth prospects for REA and I think it is a buy under $40.
- Slater & Gordon Limited (ASX: SGH) has operated its law businesses successfully in Australia for many years and is now rapidly expanding its operations abroad. The recent capital raising to acquire UK business Quindell was not met with enthusiasm by investors and the share price has fallen below the entitlement offer price of $6.37. The acquisition is the largest undertaken by the company and may be a possible driver of future growth. Now may be a good opportunity for risk tolerant investors to buy Slater & Gordon as the negative sentiment towards the capital raising looks to be improving.
- Ozforex Group Ltd (ASX: OFX) recently released its full year results that showed impressive earning per share (EPS) growth of 18%. New client numbers, transactions and revenues continue to grow at double digit rates. The international payments market is a large and growing market which is being driven by more cross border transactions. OzForex is well placed to take advantage of this opportunity but investors should be aware there is fierce competition within the sector. With this in mind, I believe the recent share price fall provides a good entry point for this growing company.
- Veda Group Ltd (ASX: VED) commands the leading position in the data and credit analytics market with over 200 million individual record files. It has produced over 20 years of consistent growth and been able to develop long-term customer relationships. Veda Group is constantly looking for complementary acquisitions and expanding its product range. Data and credit analysis is becoming more valuable to many institutions and Veda is well placed to profit from this. With a P/E of around 24, the stock is not cheap but Veda has excellent long-term growth prospects and I feel offers reasonable value at the current share price.
- G8 Education Ltd (ASX: GEM) provides investors with exposure to Australia's largest for-profit operator of childcare centres. It has produced exceptional growth over the last five years through disciplined acquisitions and by improving operating efficiencies. Although G8 Education continues to acquire new centres, the market has lost some enthusiasm over its growth strategy. Recent government policy is favourable for the childcare sector and demand for childcare services continues to grow annually. G8 Education offers a dividend yield of about 6% and has an abundance of possible acquisitions over the long term to fuel growth. I would be comfortable buying shares below $4.
Investors interested in high growth stocks will also be interested in what the Motley Fool's analysts have called their top pick for 2015!
