The S&P ASX 200 is on a continuous rally and is expected to remain at the same pace. Analysts from various broking houses are showing optimism and a well-improved market in 2024 compared to 2023. The Reserve Bank of Australia recently followed a holding stance in the monetary policy meeting for interest rate decisions, and the probability of further rate hikes is less, which is positive for the ASX markets in 2024. Additionally, the softening of the U.S. 10-year bond yield further added support to the market rally.
The broader index has been growing at a compounded annual growth rate of approximately 6.6% in the last 5 years, and strong momentum may trigger a new high in the New Year 2024. Overall, this indicates a very good opportunity in the ASX shares. As many fundamentally good companies with strong value propositions have corrected heavily in their share prices, now it's time to load on position to see a likely return of 40%–50% in early 2024.
Let’s take a look at some of the TOP ASX STOCKS’ that offer lucrative opportunities and a possible runner-up in 2024 to create shareholder wealth.
Note: Market cap and share prices are mentioned as of 20 December 2023 for the below-given ASX stocks.
Readytech Holdings Limited (ASX: RDY)
Market capitalization: $403.09 million
Share price: $3.45
Return: CAGR ~ 15%
Readytech Holdings Limited’s strategic efforts have led to the acquisition of high-value enterprise customers across all segments. With a well-planned track record and strategic investments, ReadyTech is well poised to target serviceable markets exceeding $970 million in each segment. The robust pipeline of new customers, surpassing $28 million, reflects strong demand for its products and bodes well for the upcoming year. ReadyTech's all-in-one workforce management offering, capable of replacing legacy systems with a single cloud solution, stands out. The introduction of Ready People, an employee experience gateway, exemplifies the company's application of an open ecosystem to enhance the user experience. This segment is anticipated to sustain strong growth in FY2024. Moreover, FY2024 is expected to see government and justice revenue growth return to mid-teen levels. This growth will be bolstered by recent customer ERP wins, committed cloud upgrades for IT Vision, and a robust pipeline of potential opportunities, indicating a positive outlook for the company's performance in the upcoming year. In FY24, ReadyTech aims for mid-teen organic growth with an EBITDA margin projected at 34%–35% (excl. LTIP) and labour capitalization of around 14%-15%.
Weebit Nano Limited (ASX: WBT)
Market capitalization: $831.16 million
Share price: $4.42
Return: CAGR ~ 47%
Weebit Nano Limited’s ability to maintain its Israel operations without any considerable impact on the same after the recent and ongoing geopolitical conflict in the country through having contingency plans in place remains a commendable aspect of the management. Furthermore, the necessary commercial activities have also remained stable across global geographies such as the US and France. The market outlook for the company’s offering also remains optimistic, as the embedded non-volatile memory (NVM) market is expected to reach $2.7 billion by 2028, with ReRAM expected to constitute more than a third of the same.
CSL Limited (ASX: CSL)
Market capitalization: $136.82 billion
Share price: $283.21.
Return: CAGR ~ 10%
The strong growth in immunoglobulin is expected to continue following the record plasma collections in FY2023. The company delivered excellent results, driven by strong financial performances in FY2023. CSL has a plan to roll out HEMGENIX in the US and European markets. The company is taking deliberate steps and aiming to achieve growth potential in its Vifor business, showing resilience despite challenges. Seqirus's segment progress in global registrations for its next-generation mRNA COVID-19 vaccine develops a better future outlook.
IGO Limited (ASX: IGO)
Market capitalization: $6.83 billion
Share price: $9.015.
Return: CAGR ~ 19.35%
IGO Limited is prioritizing the construction of CGP3 and support infrastructure in FY2024, aiming for a Final Investment Decision (FID) on CGP4, and implementing value optimization projects like ore sorting and assessing underground mining opportunities. These efforts are part of the company's strategy to enhance its mining and processing capabilities and work towards its goal of achieving 2.5 million metric tons per year (Mtpa) production from Greenbushes by FY2027.
Kingsgate Consolidated Limited (ASX: KCN)
Market capitalization: $345.39 million
Share price: $1.34.
Return: CAGR ~ 53%
The company has an adequate asset base, which was recorded at $126.72 million as of 30 June 2023, indicating the potential to convert into a return. The margins are slowly improving; further success on the results of testing updates and expected stable production rates going ahead with better gold and silver pricing will improve its operating level performance as well. The strong balance sheet and well-maintained DSCR will support future exploration endeavors.
Frequently Asked Questions (F.A.Q)
What ASX stocks is expected to boom in 2024?
• Readytech Holdings Limited (ASX: RDY)
• Kingsgate Consolidated Limited (ASX: KCN)
• IGO Limited (ASX: IGO)
• CSL Limited (ASX: CSL)
• Weebit Nano Limited (ASX: WBT)
What is the 5-year CAGR growth of the S&P ASX 200?
The broader index has been growing at a compounded annual growth rate of approximately 6.6% in the last 5 years, and strong momentum may trigger a new high in the New Year 2024. Overall, this indicates a very good opportunity for the ASX shares. As many fundamentally good companies with strong value propositions have corrected heavily in their share prices, now it's time to load on position to see a likely return of 40%–50% in early 2024.
What is the most profitable stock to buy right now?
The technology is playing a pivotal role, coupled with AI, as the major key players in Australia and the rest of the world are investing heavily due to the growing emergence of AI. Some of the leading ASX names in the technology space, such as Wisetech Global Ltd (ASX: WTC), Xero Limited (ASX: XRO), and Readytech Holdings Ltd (ASX: RDY), are likely to be the key prospects for buyers in 2024.
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.