Have $10,000 to Spend on Stocks?

One of the best ways for an investor to build wealth is to purchase growth stocks and then hold onto them for as long as possible. The reason is that, when you can acquire shares of a company in their early days when prices are low, and then remain patient over a few years and take advantage of the dividends that they pay, the power of compounding interest is able to work its magic. In most cases this will give an investor the best opportunity to beat the returns of the S&P/ASX 200 Index.

The four below are excellent businesses that, if you had $10,000 in capital to spend, would make an excellent growth stock investment. Take a closer look at what we’ve got to say here and, when you have a few minutes, a closer look at the actual companies themselves and make up your mind for yourself. We’re sure you’ll agree with us that they have the value to be an excellent long-term investment.

1) Yellow Brick Road Holdings Ltd (ASX: YBR). In its very early days of growth, this wealth management group expects to reach profitability sometime in 2015. Demand for their services should continue to grow stronger as long as interest rates remain low. With shares trading right around $.70, now is probably the best time to make a purchase.

2) Greencross Limited (ASX: GXL).  With clinics and retail stores expanding quickly across Australia, this veterinary services provider is looking very strong. It should gain further strength in the Western Australian market from the acquisition of CF Group Holdings Pty Ltd (“City Farmers”), which it recently announced. With a 1.4% dividend and trading on a projected P/E ratio of 40, the coming years should see very strong growth for Greencross.

3) Nearmap Limited (ASX: NEA). This company might have the highest risk of the group with a P/E ratio of 40 and only $137 million of capitalization. As an overseas provider of ultra-high resolution aerial photographs however, they not only have an enormous growth potential in their native Australia but in other countries as well. With birds eye photographs that some say are better than Google, now is a good time to pick up this company’s stock.

4) M2 Group Ltd (ASX: MTU). Another Australian company,  if you’re an investor looking to get into the telecommunications industry but don’t want to buy into the much larger Telstra Corporation Limited, they might be just right for you. Analysts predict they will have solid long-term growth and, with subsidiaries like Dodo and Primus, should expand naturally in the future.

 

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