The ASX stock market is one of many markets that has seen significant volatility this year. For me, more volatility brings more opportunities.
I don’t know how high interest rates will rise or when inflation will calm down. But I believe that the lower share prices we’re seeing can contribute to long-term returns because we can buy at a better price today.
Past growth does not mean that the future will match it. Returns can sometimes be bumpy.
However, the ASX stock market has averaged about 10% annual returns over the decades, but who knows what the next decade will bring. If an ASX stock grew an average of 10% per year, it would take me less than eight years to double my money.
I believe the following three potential investments could be exciting growth contenders to double my money in the years to come.
Betashares Global Cybersecurity ETF (ASX:HACK)
This exchange-traded fund (ETF) provides access to nearly 40 companies that provide cybersecurity services to clients worldwide.
It’s a mix of global giants and smaller but growing players.
Readers may have heard of some of the international positions in the portfolio, such as Cisco systems, Broadcom, Infosys, Palo Alto Networks, mass strike, Fortinet, verification and octa.
As BetaShares says, “With cybercrime on the rise, demand for cybersecurity services is expected to grow strongly for the foreseeable future.”
Just look at two of the recent high-profile examples of cybersecurity breaches in Australia, e.g Medibank Private Limited (ASX:MPL) and Optus. I think it is – and will continue to be – imperative for companies to pay for good cybersecurity systems.
According to BetaShares sources, the global cybersecurity sector was worth $223.7 billion in 2022 and is expected to grow to $478.7 billion by 2030. That would be an increase of 114%.
I would put $10,000 into this ETF.
TechnologyOne Ltd (ASX:TNE)
This technology company focuses on delivering a global Software-as-a-Service (SaaS) Enterprise Resource Planning (ERP) solution. The idea is that customers can do everything through the software – wealth management, human resources, payroll, supply chain management, business analytics, and so on.
TechnologyOne announced in its results for the first half of fiscal 22 that its customer The retention rate was over 99%, and more than 90% of earnings were now recurring. his net income The retention rate in HY22 was 114% – meaning existing customers paid 14% more revenue to ASX stock than before.
Management said this represented a “significant opportunity” in its existing customer base, adding that it “would continue to double every five years.”
This is certainly not guaranteed.
However, the company’s growing sales and improving profit margins are compelling in my opinion.
Total annual recurring revenue (ARR) for the first half of fiscal 22 was $288 million – expected to increase to at least $500 million in fiscal 26. Additionally, TechnologyOne expects good growth in the UK, which if successful could be a significant growth market for the company.
The company’s pre-tax profit is expected to increase from 31% to 35% in the “coming years.”
I would invest $5,000 in TechnologyOne stock.
Adairs is a growing homewares and furniture retailer with three distinct businesses – Adairs, Mocka and Focus on Furniture.
Business has plummeted this year, and Adairs’ share price has fallen 44% year-to-date. Simply going back to where the price was earlier in the year would require an increase of more than 80%.
Nevertheless, I think that the company has a good chance of growing in the long term.
Adairs plans to expand its product range in the three business areas, which can help it increase its market share. New and enlarged stores can help — there’s a correlation between sales and floor space, and Adairs aims to increase its in-store floor space by at least 5% a year over the next five years.
The retailer also builds its membership, which in turn boosts sales. Each member spends around $400 a year, according to Adairs.
With the newly acquired company Focus, they want to open at least 30 new branches nationwide. The company also plans to further improve its online offering to boost e-commerce sales.
Finally, Adairs aims to grow its total revenue from $564.6 million in FY22 to more than $1 billion over five years.
I would invest the last $5,000 in Adairs.
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