After a year of financial stress, the twin factors of controlled inflation and likely easing of interest rates could help in economy achieving the desired growth. A positive side effect of which could be emergence of excellent buying opportunities in Growth Potential Stocks.
The three best companies to invest in which are likely to be on a growth path are
Fisher & Paykel Healthcare Corporation Limited
Fisher & Paykel Healthcare Corporation Limited, one of the Best ASX Stocks for long term holding, is strategically positioned to capitalize on key global health trends. The projected rise in the elderly population perfectly aligns with FPH's focus on respiratory and sleep solutions across both Homecare and Hospital Product Groups.
Fisher & Paykel Healthcare Corporation Limited demonstrated robust financial performance for the 2024 financial year. The total operating revenue increased by 10% over the previous financial year, to $1.74 billion. Growth was led by solid demand in hospital consumables and strong growth in the obstructive sleep apnea (OSA) mask business.
Fisher & Paykel Healthcare Corporation reported having resumed its journey of growth amid changing demand patterns. Excluding the provision for a product recall, underlying gross margin was 61.1%, an increase of 216 basis points in constant currency over the previous financial year.
FPH boasts a robust patent portfolio with an impressive 11.1-year average remaining life globally, highlighting a strong foundation for sustained innovation. The company's reliance on recurring items, contributing 89% to revenue, not only ensures stability but also establishes a formidable barrier against competitors.
With a substantial NZ$25 billion total addressable market, FPH exhibits significant growth potential. Its track record of doubling revenue (constant currency) every 5-6 years highlights a growth-oriented approach. Ambitious targets of a 65% gross margin and a 30% operating margin reflect a clear focus on financial strength and operational efficiency, further enhancing its attractiveness as an investment opportunity.
Korvest Limited (ASX: KOV)
Korvest Limited reported its half-yearly financial results on 22 January 2023 for the six months ended 31 December 2023. With reduced major project revenue in the Industrial Products segment relative to the previous comparative period (PCP), trading operations revenue dropped by 2.3% to $51.7 million. However, the profitability increased as a result of higher margins, despite a slight decline in revenue. A non-recurring pre-tax gain of $0.32 million was recorded in the first half of the year as a result of the accounting treatment of entering into a property sublease. Upon entering a sublease, the company reported an EBIT gain of $319,000.
Three significant projects were supplied by EzyStrut at the beginning of the half. Since the volume from these two jobs has now mostly been completed, the lower level of major project activity during the period can be explained. In comparison to the previous corresponding period, the galvanizing business's volumes were comparable, with strong external volumes offsetting the lower internal volumes. The external metric tonnes reached were the highest in the previous ten years.
According to the company, the second half of the year will see similar activity levels in the major projects, small projects, and daily markets, all of which are expected to remain strong despite wider economic conditions.
Treasury Wine Estates Limited (ASX: TWE)
Treasury Wine Estates Limited in a significant development had announced that the Chinese Ministry of Commerce confirmed the removal of tariffs on Australian wine imports into China, effective 29 March 2024.
TWE, considered among good Fundamental Stocks, has historically relied on its collaborations with customers and partners in China to drive and leverage the growth in the Chinese wine market. The imposition of tariffs had previously impacted the company's established customer base and sales strategy. However, the recent update nullifying these tariffs presents an opportunity for TWE to advance its growth strategies in this promising market, potentially delivering financial growth. The company plans to increase investments in China, capitalizing on this favourable development.
During the first half of FY24, ending 31 December 2023, market trends aligned with expectations, showing strong demand for luxury wine in key markets, resilience in premium wine, and a continued consumer shift away from commercial wine.
TWE completed the acquisition of DAOU in December 2023, with CY23 EBITS reaching US$63.7 million, in line with expectations. The brand experienced accelerated growth across scan channels in 1H24, driven by increased distribution and an expanding rate of sale. The company maintains a strong short to medium-term focus on advancing its robust US brand portfolio and platform. The acquisition of DAOU is anticipated to make a significant contribution towards EBITS in the range of $23-25 million during the second half of FY24.
As of 31 December 2023, the company maintained a cash position of $436.4 million.
Source: Company's Report
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