Unlocking Potential: Exploring ASX Growth Stocks & Shares
Team Veye | 17-Aug-2023
The definition of a stock is quite broader as it considers various listed shares in a portfolio, and there are different categories of shares based on the behavioral aspects of the company. It has been well classified into two different types: one is value-based, and the other is growth-based. The value based companies will grow systematically, while the growth companies will deliver an exponential return, although growth companies are technically highly risky, whose beta will normally be more than 1.5, and whose PE value will also be very high. Investors very often define a well-diversified portfolio as comprising 70% growth-based stocks and 30% value-based stocks to enable the portfolio to beat the market. The growth stocks refer to those who have outstanding profitability potential quarter on quarter or year on year. There are specific ASX shares that have shown tremendous returns in the past; Liontown Resources Limited (ASX: LTR) has returned 103% over a 1 year period. The value-based company commits to distributing dividends, while growth shares may not pay out an attractive dividend.
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What is an ASX Growth Stock?
There are good ASX growth stocks that trade on the Australian exchange; one of them is Latin Resources Limited (ASX: LRS), which has delivered 368% in a 1-year return. From February 4, 2022, at 0.036, until July 21, 2023, at 0.40, the absolute return produced during this period was phenomenal at 1011%.
Why Invest in Growth Stocks ASX?
Investors often tend to beat the market through growth stocks on the ASX due to their inherent growth potential. Investors always tend to grow their investments to receive an inflation-adjusted return, which means that the return in hand should be positive after adjusting the economic inflation rate in The faster move can be expected only in growth stocks. One should add growth ASX stocks to their portfolio to receive an outstanding return in the long term.
Pros of Investing in Growth Shares
Every market player enters the market with investible capital to receive benefits in the medium to long term. Traders in this category always expect a return sooner rather than waiting for long-term duration. Only growth shares have the ability to match their expectations. There are ASX shares that have returned double their money in a 1-year period and far greater in a 3-year period. Some ASX growth shares have buy ratings; one can take advantage of this by investing in them.
Are ASX Growth Stocks a Good Investment?
Investors whose risk appetite is considerably higher and who have the patience to sit on it for a longer duration may enjoy multi-times returns. Select the top 10 ASX growth stocks and invest in them proportionally, and wait for the long term to benefit.
Top 10 ASX growth stocks to watch in August 2023
Currently, the world is facing challenges with economic growth, and the central banks from all over the world are behind interest rate hikes to tame inflation. The majorities of the growth stocks are in the correction phase now and are expected to remain in a similar trend to reach a reasonably fair price, although some may have a close eye on the top ASX companies, as follows:
• RIO Tinto Limited (ASX: RIO); Market Cap of $43.46B
• Pilbara Minerals Limited(ASX: PLS); Market Cap of $14.51B
• Mineral Resources Limited (ASX: MIN); Market Cap of $13.89B
• Allkem Limited (ASX: AKE); Market Cap of $ 9.45B
• Liontown Resources Limited(ASX: LTR); Market Cap of $5.92B
• Leo Lithium Limited (ASX: LLL); Market Cap of $1.13B
• Delta Lithium Limited (ASX: DLI); Market cap of $461.86M
• AZURE Minerals Limited (ASX: AZS); Market Cap of $ 718.03M
• Northern star Resources Limited (ASX: NST); Market Cap of $13.26B
• Meteoric Resources NL(ASX: MEI); Market Cap of$417.13M
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Frequently Asked Questions (FAQ)
What is the best ASX growth stock to buy right now?
There are dozens of ASX growth stocks that provide buying opportunities; currently, one of them is Clinuvel Pharmaceuticals Limited (ASX: CUV), with a market cap of $990.68 million and tremendous upside potential of 25% to 35% share price growth.
In which stock should I invest $10,000?
Growth stocks have phenomenal capacity to generate attractive returns; someone might take a chance even at a higher valuation, for instance, above a PE multiple of 60–70. But investments in growth ASX stocks might lead to medium to high risk. Investors with a high risk appetite are only suitable to take a call on investing in these stocks. Azure Minerals Limited (ASX: AZS) looks promising for the long term.
What is an ASX growth stock example?
Emerald Resources NL (ASX: EMR) is the perfect example of an ASX growth stock; it has a market cap of $1.39 billion and a current market price of $2.34 (as of August 16, 2023). The PE multiple of 23x and EPS of $0.101 provide a fair value buying opportunity for investors. The ASX stock has delivered a 100.86% return in a 1-year period (YTD as of August 16, 2023).
How risky is a growth stock?
The risks of growth stocks are notable and very high in general, due to their high investments in assets, excess capital raising ability, and initiative to incur heavy operational risk. The standard deviations of these growth stocks are normally very high, with high yearly volatility. Technically, these are high-beta stocks. Investing is pretty risky, at the same time return potential is also very attractive.
Which stock is best for beginners?
It is always advisable for early entrants in the market to select companies that have a large market cap. Due to their less volatile nature, they relatively have low chances of losing substantial amount of capital over penny dreadful stocks. Focus on the growth stocks that pay dividends.
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