In the last 10 years a number of high-quality growth companies have emerged on the Australian Stock Exchange. One of my favourites would have to be online travel agent Webjet Limited (ASX: WEB).
Thanks to the meteoric rise in online travel bookings Webjet has managed to grow its earnings by an average of 21.9% per annum. By comparison, Flight Centre Travel Group Ltd (ASX: FLT) (largely a bricks-and-mortar operation) has grown its earnings by an average of 12% per annum.
As you might expect, this incredible earnings growth has impacted its share price positively. Over that time Webjet has provided investors with an average annual total return of 27.1%.
This means that investors that bought $25,000 worth of Webjet shares 10 years ago would have seen the value of their investment rise to be worth a staggering $275,000 today.
The good news for investors is that I believe that Webjet is just as attractive today as it was 10 years ago.
A recent update from the company revealed that its bookings growth in the consumer market continues to outperform the market by more than four times.
Even better is its bookings growth in the business-to-business market. Bookings in this lucrative market so far in FY 2017 have grown at an amazing 10 times the market average.
Because of this management has forecast for full year EBITDA from its continuing businesses to come in at $60 million. This is a huge increase on the $37 million it delivered last year.
I believe that its explosive growth won't end there either. With such a huge opportunity available to the company in the business-to-business segment, I believe Webjet has a number of years of strong growth to come. This could make it a great buy and hold investment in my opinion.
Although at 27x estimated FY 2017's earnings it doesn't come cheap, I believe its strong growth potential more than justifies the premium today.
