Anyone with an investing horizon longer than five or ten years should look to double-digit growth stocks to do most of the heavy lifting for their portfolio.
Investing is not rocket science as share prices will follow earnings higher or lower over time, and businesses with potential to deliver consistent double-digit earnings growth can deliver spectacular long-term returns if acquired at anywhere near a reasonable price.
Of course high-growth stocks generally carry a relatively high level of risk as earnings disappointments can lead to big share price falls, although I think the three companies below are in reasonable value territory and won't need babysitting as they grow due to the strong management teams and powerful tailwinds they enjoy.
Vocus Communications Limited (ASX: VOC) ($7.60) is a particular favourite thanks to a strong management team and growth-oriented company culture. The big risk comes due to the merger with retail broadband provider M2 Group, but if the combined group is able to execute successfully in building an integrated digital communications business, earnings and the share price could keep climbing long into the future.
Sirtex Medical Limited (ASX: SRX) ($34.50) is the liver cancer treatment specialist that has been posting double-digit sales and earnings growth thanks to growing awareness of the effectiveness of its oncology treatments. The business has recently retreated to a more reasonable valuation and enjoys overseas exposure and the long-term tailwinds of the healthcare sector.
Freelancer Ltd (ASX: FLN) ($1.38) is another business that has retreated to a more reasonable valuation recently. It is founder led and enjoys the tailwinds of the digital future. Operating cashflow positive and in the middle of the new digital economy, the global website operator appears to have potential to keep growing strongly long into the future.
