Investors are always on the lookout for strong possible prospects. Here are 3 companies that I would buy right now with $5,000:
Nearmap Ltd (ASX: NEA)
An aerial mapping company with interests in both Australia and the USA, Nearmap is a minority player in both of those markets and appears to have a long growth runway ahead. Although unprofitable, the company is steadily growing its customer numbers and enjoys very high profit margins on its subscription sales.
In a couple of years at today's growth rates, Nearmap could prove a nicely profitable company for investors. Shares have been volatile recently and management has a track record of mediocre disclosures to the market, so patient investors might also be able to pick up shares below today's prices.
XERO FPO NZX (ASX: XRO)
Xero is an accounting software company that has been growing rapidly at the expense of local competitors like Myob Group Ltd (ASX: MYO) and Reckon Limited (ASX: RKN). Xero is already the dominant software product in the ANZ region, although it is also growing rapidly in the USA and UK, and its current valuation accounts for a significant amount of future growth.
However, the ease of use of its software suite and the degree of integration with its business makes customers stick around for a long time, and Xero – currently unprofitable – is expected to deliver its first profits in the coming years. Beyond that date, wide profit high margins and long customer lifespan could reap a windfall for shareholders.
Sirtex Medical Limited (ASX: SRX)
Sirtex Medical shocked the market – and shareholders – when its shares plunged 50% and it fired its CEO recently. At $18 per share and with a class action hanging over its head, it would be safe to say that investors are wary of it. Current prices – approximately 25 times forecast full year earnings – appear expensive, but in my opinion the market is largely factoring in just the current sales from the company's product.
Ongoing clinical trials that are coming to completion in the next couple of years provide the scope for SIR-Spheres to possibly be marketed to a greater number of patients, vastly increasing the potential market. This would provide meaningful upside for Sirtex from today's prices.
