With all the volatility equity investors have experienced over the past six months, it would be easy to think that every stock on the market has suffered significant shares price declines.
That is not true!
In fact, many stocks have performed relatively well or even increased in price during this time.
Unfortunately for some investors, this has created limited buying opportunities as some of the best and fastest growing companies remain relatively expensive compared to the broader market.
Rather than buying these stocks now, it may be prudent to keep these on a watch list for the time being in the anticipation of a discounted price in the future.
So with that in mind, here are four fast growing stocks that I believe deserve to be watched closely for future buying opportunities:
1. Aveo Group (ASX: AOG) – Aveo Group was previously a diversified property manager but over recent years has developed a strategy to become a leading pure retirement village owner and operator in Australia. The group currently manages 75 retirement villages in Australia with more than 12,000 residents under its management. The share price has risen by more than 38% over the past year on the back of a full year result that delivered a 30% increase in underlying earnings. Importantly for investors, Aveo is forecasting underlying earnings growth of at least 45% in FY16 resulting from an increase in the number of housing units expected to be sold. The shares appear fully valued at the moment however, trading at more than 26x FY15 earnings.
2. Ozforex Group Ltd (ASX: OFX) – Ozforex's share price has gained nearly 14% over the past 12 months, although the share price has experienced a significant amount of volatility during this time. The company is slowly building a reputation as one of the fastest growing financial businesses on the market and at its AGM in August, it confirmed that its strong growth is set to continue for the remainder of the year. In addition to this, Ozforex recently announced a partnership with cloud accounting company XERO FPO NZ (ASX: XRO) that will deliver instant brand awareness to over 500,000 Xero clients. Although the outlook for cross border financial transactions remains positive, the shares are trading at around 25x earnings and this means there is little room for error.
3. Mayne Pharma Group Ltd (ASX: MYX) – Mayne's share price has climbed nearly 50% since February after it announced it will be acquiring the rights to the popular US acne treatment Doryx. The company has a diversified portfolio of generic and patented pharmaceutical products and has been actively acquiring new molecules and expanding its existing manufacturing facilities to increase capacity. Mayne produced disappointing first half FY15 results but produced substantially stronger results in the second half thanks to an improved contribution from the Doryx acquisition. Although the earnings outlook remains positive, the stock is trading at a significant premium to the broader market and I believe Mayne will need to deliver successive years of consistent earnings growth before this can be justified.
4. Burson Group Ltd (ASX: BAP) – Over the past 12 months, Burson's share price has gained more than 54% and has been largely unaffected by the volatility surrounding the rest of the market. Burson is Australia's leading automotive after-market parts supplier and through its recent acquisition of Metcash Automotive Holdings is now the owner of some of the most well known brands in the auto sector including Autobarn, Autopro and Midas. Burson's FY15 result was a record for the company that saw revenues and earnings grow by 10% and 19% respectively. The company is also expected to deliver another record result in FY16 with guidance of earnings per share growth in the mid teens. Despite this, the shares appear fully valued at the moment, trading on a price-to-earnings ratio of more than 25.
Those four stocks might need to stay on your watch list for the time being, but the experts at The Motley Fool have found one stock that you can buy right now..
