In turbulent times such as now, everyday investors could find it hard to come up with conviction on potential stock purchases.
That’s why it’s worth examining professionally operated funds to see which stocks they are proudly holding for long-term growth.
Here are three ASX shares that the team at the ECP Growth Companies Fund is loving at the moment:
‘Outlook remains compelling’
Financial services platform Hub24 Ltd (ASX: HUB) had a fantastic February, gaining more than 9%. It has since moderated a touch to be 3.75% up for the year so far.
The ECP analysts, in a memo to clients, urged investors to keep their eyes on the ultimate prize — long-term growth.
“The share price has been volatile as short-term investor sentiment has remained focused on the cadence of in-flows to wealth platforms, with advisors regaining client consolidation momentum as markets have stabilised.”
The business has kicked off 2023 in a positive vein, according to the ECP team.
“Hub24 reported a strong start to net flows in 3Q FY23 and reiterated guidance for FY24 funds under management.”
ECP sees a growth stock with alluring fundamentals in Hub24.
“With stable revenue margins and operating leverage incrementally flowing through, the outlook remains compelling for Hub24.”
Pariah turned angel?
Software maker Nuix Ltd (ASX: NXL) is as close as any stock can get to the term “pariah” on the ASX.
The company debuted on the bourse with tremendous hype in December 2020. Within a few weeks the share price exceeded the $11 mark, as investors climbed over each other for a piece of the action.
But then within just a few months in 2021, it all came crashing down.
A series of governance failures, and a realisation that it would not hit forecast numbers contained in the IPO prospectus, saw shareholders run from the burning building.
The share price has been as low as 52 cents over the past year, as Nuix became an example of how fast investors could get burnt.
But amazingly, the stock has risen 73% year to date.
The ECP team noted that the company recently won a stock ownership court case brought on by former chief executive Kervin Sheehy.
“The share price rallied significantly on the back of this, as the market was discounting around $60 million of market capitalisation from the company, expecting the company to lose the case,” read the memo.
“Nuix has already been awarded costs in the matter, and will defend the appeal.”
Pizzas don’t sell themselves
Unlike the other two stocks, Domino’s Pizza Enterprises Ltd (ASX: DMP) has been in a downward spiral this year.
The pizza retailer has already lost over a quarter of its valuation in 2023.
ECP analysts said that the business had failed to execute an appropriate pricing strategy.
“[This] saw volumes decline toward the end of the year,” read the memo.
“The inflationary environment has been challenging, particularly in Europe and Asia.”
However, the team still has faith in the long-term capital growth opportunity for Domino’s shares.
“Going forward, the company has introduced their Flexible Voucher, which has proven to have some early success and will be key to improving its operating performance in 2H.”
