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What are Australia’s top five growth stocks for 2024?

What are Australia’s top five growth stocks for 2024?

Many foreign investors are familiar with ASX-listed miners, due to the importance of the resources sector for Australia’s economy. But there is more to the Australian stock market than mining. In our first Top Five feature of the New Year, we look at the best-rated Australian growth opportunities, regardless of sector or market cap. While some stocks have been sold down heavily in 2023, good numbers out to investors mean that they are looking undervalued.

1. DRA Global [ASX:DRA]

DRA is a specialist engineering firm that operates in the mining sector. It is also active in plant operations and management. Based out of Perth, the heartland of Australia’s mining sector, DRA was founded in 1984. This is a small cap stock which has been trading well off its 52 week highs recently. Since the pandemic, the mining sector generally has been suffering, and this has been reflected in a DRA Global share price that descended rapidly in 2022, and is now hovering just off $1.50. The company has delivered over 8000 projects in its history, and represents an interesting play on global mining without buying mining stocks directly.

2. Fleetwood [ASX:FWD]

Fleetwood builds modular accommodation units in Australia and New Zealand. It also operates accommodation ‘villages’ and is active in associated fields within property maintenance, like keyless locks and caravan plumbing. Fleetwood’s financials based on its last report look very good and are not reflected in the share price of $1.70 Australian at time of writing. Shares have come off a lot since last summer (winter Down Under) when they peaked at around $2.36. Fleetwood stock has been showing some signs of life over the Christmas period. Numbers out last August were very solid, with total revenue of A$410.6m, and while this was down on FY2022, the company registered EBITDA at $4.2m and pre-tax profit of $2.6m. This looks very much like a potential turnaround story.

3. Mayfield Group Holdings [ASX:MMYG]

Mayfield is active in the Australian telecoms space. This includes switchboards and transportable switch rooms for critical electrical infrastructure. It also gets involved in electrical testing and measurement. Shares are moving having gained over 34% in the last six months. The rally really started in early November, but the stock is up almost 60% in the last 12 months and showing considerable momentum. The PE ratio at 8.59 makes Mayfield look relatively cheap, despite the gains registered in 2023. The last set of numbers from the company demonstrated strong gains in net income, net profit margin and diluted EPS. Mayfield is still sufficiently cash rich for a company of this size to be paying out a dividend yield of 4.17% and ROE (return on equity) was 19.5%. One to watch this year.

4. CVC [ASX:CVC]

CVC is a specialist venture capital investor that trades on the ASX. It focuses heavily on opportunities in Australia – e.g. financing, property and packaging supplies. It recently announced that it would not be paying an interim dividend for the year ending 31 December, because of “future cashflow commitments.” The board said it would be looking at whether it would pay a final dividend. Underlying profits for the year ended 30 June were A$13.4m with net assets booked at A$181.3m. The board recently told investors that “the statutory assets of the business do not align with current ‘as is’ independent values of property inventory, due to accounting standards.” Shares have predictably sold off with all this dithering over dividends. CVC stock could easily drop to around $1.9 on the negative sentiment, but if these issues can be resolved, it owns some decent assets that have really not been properly priced in at the moment.

5. King River Resources [ASX:KRR]

It would not be a review of Australian stocks without the compulsory natural resources play. King River Resources is a miner active in Australia, mainly in gold, copper, alumina, vanadium and titanium. It owns 100% in tenements covering around 351 square kilometres in the East Kimberley region of Western Australia. It also has 100% of a hefty 6,641 square kilometres in the Tennant Creek region of the Northern Territory. This is a highly illiquid, small cap mining stock, and volatility in the stock price goes with the territory here. King River shares have bounced all over the place in the last five years, currently trading at A$0.013, it has traded as high as A$ 0.06, but that was at the height of the big bounce back in stocks during the pandemic. The company is currently actively drilling at Tennant Creek, where it completed the first phase of RC drilling at the Providence target area. This is the first part of a A$2m drill programme to follow up on targets generated from the company’s extensive 2023 geophysics program.

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This article does not constitute investment advice.  Do your own research or consult a professional advisor.

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