Top Five ASX200 Emerging Stocks to Invest
Team Veye | 30-May-2022
The global market experienced a heavy sell-off in the last two months panicking investors. However, historically it has been observed that the panic times are good times to enter in the equity market with a long-term view. The ASX200 is currently trading at around 6.3% lower year-to-date. The correction has made the valuations of many growth stocks attractive. Therefore, long-term investors can invest in quality names that are available at a discounted price.
We came with a list of five quality stocks that show attractive valuations and which have high growth potential in the medium to long-term. Here are the list of top 5 ASX emerging stocks:
1. Company name: Pro Medicus Ltd (ASX: PME)
Sector: Healthcare technology
About the company
Pro Medicus Limited (ASX: PME) is a leading medical imaging company in Australia. It provides a full range of IT software and services related to radiology to hospitals, imaging centres and health care groups worldwide. In 2009, Pro Medicus Limited (ASX: PME) acquired Visage Imaging which eventually became a leading provider of enterprise image solutions worldwide.
The company is trading at a PE ratio of 109.22 and the last closing price was $40.66. The 52- week high price of the stock was $70.
Even though the company is currently trading at a high PE ration of around 110, it is a high-quality name. It is a leading provider of imaging software and it is currently expanding the US market aggressively. Around 70 % of its revenue comes from the US market.
The company has excellent fundamentals, management and growth potential. In the last financial report, the revenue grew by 40% and EBIT grew by 54%. As the company expands operations and wins more contracts and more hospitals come on board, the revenue is expected to increase significantly. We consider this a value buy as the stock is currently trading at more than 40% discount from its 52-weeks high price.
2. Company name: Ampol Ltd (ASX: ALD).
About the company
Ampol Ltd (ASX: ALD) is a leading petroleum products company in Australia. The company is in the business of offering petroleum and convenience network, refining, and importing and selling fuels and lubricants. Ampol Ltd (ASX: ALD) fulfils the energy needs of some major economic sectors such as mining, defence, agriculture, aviation, marine and transportation.
The stock is currently trading at the PE ratio of 14.38. The previous closing price was $33.76 and its 52-week high price was $35.08.
The stock is currently at a great upward momentum and it is trading near its 52-weeks high price. Recently the shares got a positive sentiment because of its divestment of Gull for around NZ$509 million was approved by the New Zealand Commerce Commission. In addition, the company is focusing heavily in the EV sector with its EV charging division AmpCharge. Clearly, there is a strong upward potential in the stock given that the global energy prices are expected to go up and there will be greater push towards the EV segment. Given the high momentum and high growth in the EV sector, this stock is a strong buy.
3. Company name: Maas Group Holdings Ltd (ASX: MGH)
About the company
Maas Group Holdings Ltd (ASX: MGH) is a leading construction materials, services and equipment company in Australian. Its diversified businesses include civil, infrastructure, mining, and real-estate.
The stock is currently trading at the PE ratio of 33.06. The previous closing price of the stock was $4.56 and the 52-week high price was $6.32.
The company has an excellent management and board. More than 60% of the issues shares in the company are owned by the board members and the founders. This shows that the company insiders have a strong confidence in the business prospects.
The company has a strong presence is regional Australia. This is going to be a major positive factor in its earnings upgrade because an emerging trend of population shift from large cities towards regional Australia. Such population shift can boost the revenue of the company around 15% in the next quarter. Also, the company has a strong balance sheet having high value properties in its balance sheet. The stock has corrected around 12% year-to-date. This makes the current price an excellent entry point for the stock.
4. Company name: Goodman Group (ASX: GMG)
Sector: Real estate
About the company
Goodman Group (ASX: GMG) is a global property conglomerate having businesses in Australia, New Zealand, Asia, Europe, and North America. The company has a diversified business consisting of property investment, property services, property development and fund management.
Currently the stock is trading at the PE ratio of 11.42. The last closing price of the stock was $19.68 and the 52-week high price was $26.96.
The company announced a positive earning guidance for the FY 2022 in which the earnings per share is expected to grow by 23%. The current EPS of the company is $1.722. Given the pick-up in demand in the property sector, there is a strong earning visibility for the company. The company reported a strong work-in-progress pipeline.
Recently a number of top broking firms Credit Suisse gave underperform rating to the stock. Credit Suisse gave a price target of $24.05 for Goodman Group (ASX: GMG).
5. Company name: 29Metals (ASX: 29M)
About the company
29Metals (ASX: 29M) is primarily in the business of exploring minerals, production and development of minerals. The company has a lucrative business portfolio which consist of long-life producing assets like Golden Grove (producing copper, zinc, gold and silver) and Capricorn Copper in Queensland (producing silver and copper).
The stock is currently trading at the PE ratio of 5.64. The previous close price of the stock was $2.76 and the 52-week high price was $3.35.
In general, mining companies have strong earning growth expectations as many economists predict a long-bull market in commodity prices. According to analysts at Goldman Sachs, copper is the new oil and it is high time to add copper in the portfolio because of high industrial demand of the commodity. Copper is extensively used in decarbonisation. Now when the global focus is on reducing carbon footprint, copper demand is expected to grow significantly. 29Metals (ASX: 29M) is mainly focused copper mining and production.
29Metals launched its IPO in 2021 to raise funds for expansion. The stock is still trading at 28% premiums from its IPO debut price. The stock has a high-momentum and the recent correction in price provides an excellent entry opportunity.
Curious to know what are the top undervalued stocks, check out our latest article on top 5 ASX undervalued stocks for 2022.
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