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Why banking on Nearmap and 2 other growth stocks could make you an ASX millionaire

Kenneth Hall
rocket shooting higher

While the S&P/ASX200 Index (ASX: XJO) has enjoyed its best start to the year since 1991, those alpha-seeking Fools out there might be looking for that little bit of something extra.

I’ve taken a look at some of the hottest growth stocks on the ASX and how the likes of Nearmap Ltd (ASX: NEA), Altium Ltd (ASX: ALU) and Appen Ltd (ASX: APX) could help you become an ASX millionaire in the next 10 years.

How can these ASX growth stocks boost my returns?

All three of the ASX companies mentioned above are very much considered growth stocks, with low or no dividend payments and significant reinvestment of capital to expand operations and allow the company to make solid free cash flow in the future.

The Nearmap share price has surged a whopping 660% in the last 5 years and 6,440% since its initial public offering (IPO) back in October 2005.

Perhaps even more promisingly for investors, much of this growth has occurred since the start of 2018 and I think the company remains in a strong position to surge even higher in the next 10 years.

Nearmap has continued to outperform in both its half year and full year results releases, with its February numbers showing a 42% increase in its annualised contract value (ACV) due to record growth in its United States operations.

If Nearmap can outperform again in the upcoming August reporting season, expect to see the company’s share price surge higher again and deliver those strong capital gains to boost your portfolio higher.

With a $50,000 investment in Nearmap and similar 600% growth in the next 5 years, that would translate to a handy nest-egg of $300,000 and put you well on your way.

The same can be said for fellow ASX outperformers like Altium and Appen which have been on fire throughout the first half of 2019.

In the last 5 years, the Altium share price has rocketed 1400% higher to $36.82 as at Friday’s close and continues to exceed its own 52-week highs as the capital gains keep on rolling.

If the Altium share price can replicate this same success, a $50,000 investment would be worth $700,000 in 5 years time, putting the hypothetical portfolio value at $1,000,000 – before considering Appen.

Appen has been an absolute star growth stock on the ASX over the last 2 years or so, with the Appen share price surging 4.700% since its January 2015 IPO.

This would mean that an additional $50,000 of Appen shares, if it could replicate the same astronomical growth over the next 5 years, would be worth a whopping $2,360,000 on its own – bringing your hypothetical ASX growth portfolio value to a total of $3,360,000.

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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia owns shares of Altium and Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019