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Buzzing Trends. Today we will be looking at two ASX growth stocks that are on investors’ radar.
Growth stocks are shares of the companies that are expected to grow at a higher rate
than their respective industries. These stocks are generally richly valued due to their higher
perceived earnings in the future and therefore these companies generally
command a premium for their shares. Because of their high growth prospects, these companies
also try to steer clear of distributing profits in the form of dividends and instead prefer to
reinvest those earnings to accelerate their growth. There are a few blue-chip
companies as well that could also be seen as a growth stock in the near term. Let us have
a look at two such stocks that investors have set their eyes on for the near term.
Santos listed on ASX under the ticker code STO is today’s first growth stock in the list.
Oil exploration giant Santos is one of the stocks piquing investors’ interest
for the near term. Santos is a direct beneficiary of a massive ongoing rally in crude oil prices
that have already surpassed the 7-year high mark and are currently trading above US$90
per barrel. In financial year 21, the company clocked a revenue of AU$3.51 billion,
slightly lower than financial year 20 revenue of AU$4.19 billion. However,
rising geopolitical tensions have sent the crude oil price outlook to over US$100 a barrel,
as per the Economist Intelligence Unit. This massive demand-supply shift is likely
to benefit Santo’s earnings growth. Currently, STO shares are trading at AU$7.36 per share.
Looking at its recent development. Santos shareholders might be seeing red after the
company’s CEO was appointed to the board of iron ore and lithium producer ASX listed
Mineral Resources. Mineral Resources announced Gallagher’s new position on Monday night.
Moreover, owners of Santos shares might want to keep an eye on the company’s Papua New Guinea
assets amid rumours of a sell down. Santos is actively moving to sell down its stake in PNG
LNG – boosted by its takeover of Oil Search. The merged group owns 42.5%
of the LNG project after Oil Search’s 29% stake was added to Santos’ 13.5% holding.
Moving on to next Block. Block’s part company Square has started trading on ASX under the
ticker code of its SQ2. Yesterday’ its share price was seen enjoying a positive session
as it officially took Afterpay under its wing. Afterpay is now delisted from ASX. In the noon
yesterday, shares in the US-based financial services company were up 8.11% to $174.50.
Block, is a US-listed fintech firm and not an original ASX 200 company.
However, after the acquisition of Afterpay, Block shares were listed on the Australian
bourse via CDIs or CHESS Depositary Interest, and consequently included in the ASX 200
as well. Block is Jack Dorsey’s digital-payments company, which has soared to new highs during
COVID-19 as the pandemic has massively increased consumers’ reliance on digital payments.
Block’s ecosystem is becoming robust with its Spiral tool which builds free open-source
projects that advance the use of Bitcoins. The growth in the crypto space could be debatable,
owing to various restrictions and regulatory hurdles, but there is no denying the exponential
pace of Bitcoin adoption. According to the Global Crypto Adoption index 2021,
Bitcoin adoption surged 880% worldwide. Square shares are trading at AU$165.22 per share.
In conclusion, high growth factors are often speculative and majorly depend on a thorough and
rigorous analysis of the respective industry. These factors may change quite
quickly and therefore growth stocks are considered to be a riskier bet.
Investors should always do proper due diligence before investing in these stocks.
Well, that’s all for now. We will be back soon
with our Buzzing Trends show to share the latest market insights with you.
Till then, Stay tuned with Kalkine TV for more stock, business and economy related hot trends.