Top 10 ASX growth stocks to watch in October 2024
Read on for an overview of growth stocks, why they’re special, and a list of the top 10 ASX growth stocks in October 2024, selected based on recent market news and ranked by the largest share price return over the past 3 months.
What is an ASX growth stock?
Growth stocks are shares in companies that are expected to grow much faster than either the average growth of a company within the wider market or within its specific sector.
Instead of paying out dividends, any profits generated are ploughed back into the business to help accelerate growth. Accordingly, investors are usually hoping to make a profit on capital gains in the short term, with dividend income a potential outcome once major growth has been established.
Some of the best growth stocks, especially those occupying a specialist niche, trade at a high price-to-earnings ratio. Therefore, would-be investors usually end up paying a premium in hope of future growth. This means that growth stocks can see rapid declines if the company underperforms, even in just one quarter.
Common traits of the most popular ASX growth stocks often include holding patents or technologies that grant the company a unique marketplace advantage. Therefore, many have a loyal customer base and disproportionately high market share.
One key misunderstanding is that all growth stocks are small caps that might have weaker financials or be confined to domestic business. While many are, larger companies can also qualify as growth stocks depending on how much market share remains realistically available.
As an extreme example, US$570 billion market titan Tesla is by all accounts still a growth stock, delivering less than one million of the 66.7 million automobiles sold in 2021.
High risk, high reward?
One of the best-known rules of investing is the risk-reward ratio, whereby investors balance an equilibrium that sees higher-risk companies deliver either negative capital growth or far better rewards than comes from value or income investing.
For context, penny stock investing is generally regarded as being very high risk, but with the potential for exceptional returns.
Conversely, income stock investing through blue chip companies for dividends is relatively low risk, but returns can take years to become meaningful.
ASX growth stocks take their place somewhere in the middle. Of course, many investors choose to invest in a diversified portfolio that includes multiple different growth stocks to account for the risk of an individual failure. And in this recessionary environment, it can make sense to buy the dip slowly through dollar-cost averaging to further mitigate the chances of losing capital.
But fundamentally, all investing comes with risk. For example, Tesla proponents believe the EV trailblazer could one day become the automobile production market leader; but any threat to this goal through competition or similar could see a sharp correction in the future. Conversely, if Tesla succeeds, its future market cap may make the current valuation look small.
Another common growth stock example is biotech companies, some of which have their valuations underpinned by one drug or treatment. If the drug fails in the trial stages, their share price can collapse, as happened to Synairgen, BridgeBio Pharma, Sensorion, and Rafael, alongside countless others.
What makes ASX growth stocks special right now?
The Australian dollar recently hit a six-month high, reaching 67.7 US cents for the first time since early January. This surge is driven by the RBA’s preference for higher interest rates compared to the Fed, strong commodity prices, and signs of economic stabilisation in China. This strength in the Aussie dollar is particularly relevant for ASX stocks, influencing various sectors significantly.
Morgan Stanley forecasts a structurally higher Australian dollar for FY25, which could pose challenges for companies with substantial overseas earnings. Factors driving this include possible RBA rate hikes, favourable relative growth expectations for Australia, and strong risk sentiment tied to equities.
For ASX stocks, a stronger Australian dollar means cheaper imported goods and more expensive exports, which can push inflation down but also slow GDP growth. In the commodity markets, a rising Aussie dollar boosts risk appetite for resources, though impacts may be tempered by external factors like the upcoming US election.
The higher dollar could also spur inbound M&A activity, as investors seek valuation opportunities before significant shifts in Enterprise Value. However, sectors like healthcare and global growth stocks (e.g., Treasury Wine Estates, Aristocrat Leisure, Macquarie) may face earnings pressure if the dollar continues to rise.
In summary, while a stronger Australian dollar presents challenges for some sectors, it can benefit the broader ASX, particularly in materials, resources, and diversified financials. This dynamic is crucial for investors focused on ASX growth stocks, highlighting both opportunities and risks in the current market.
With that in mind, here is a list of ten ASX growth stocks for investors to consider.
Remember, past performance is not an indicator of future returns.
Top 10 ASX growth stocks to watch
These shares have been selected due to their substantial share price returns over the past three months. While they may not necessarily represent the best long-term growth investments, they have garnered significant investor interest.
Labyrinth Resources (ASX: LRL)
Labyrinth Resources Ltd is an Australian mining company specialising in gold exploration and development. With key projects in Canada, including the high-grade Labyrinth Gold Project in Quebec, the company is focused on unlocking the value of underexplored regions through modern mining techniques and sustainable practices. Their expertise in identifying and developing resource-rich areas has allowed them to build a portfolio of high-potential assets.
The company’s success lies in its strategic location choices and commitment to operational efficiency. By focusing on regions with established infrastructure and favourable mining conditions, Labyrinth Resources reduces operational risks and costs. This makes the company an attractive option for investors seeking exposure to the gold sector, especially given the ongoing demand for precious metals as a hedge against economic uncertainty.
Labyrinth Resources has achieved a 575.4% share price return over the last three months.
Market cap: $93.90 million
Osmond Resources (ASX: OSM)
Osmond Resources Ltd is an Australian exploration company focused on discovering and developing mineral resources, particularly in gold, copper, and nickel regions. The company’s key projects are strategically located in South Australia and Western Victoria, areas known for their geological potential. Osmond Resources employs advanced exploration techniques to target underexplored sites, aiming to unlock significant mineral deposits.
The company’s success stems from its well-positioned projects, experienced management team, and commitment to responsible exploration. By focusing on commodities like gold and copper, which have strong market demand, Osmond Resources offers investors exposure to potential high-growth assets in a favourable mining jurisdiction. The company’s strategic approach and promising exploration results make it an appealing option for those looking to invest in the resource sector.
Osmond Resources has achieved a 363.8% share price return over the last three months.
Market cap: $19.81 million
Killi Resources (ASX: KLI)
Killi Resources Ltd is an Australian exploration company focused on discovering and developing gold, copper, and rare earth mineral deposits. The company holds 100% ownership of several key projects, including the West Tanami Project in Western Australia and the Ravenswood North Project in Queensland. The West Tanami Project spans 1,641 square kilometres and is strategically located in a prolific gold-producing region, while Ravenswood North covers 660 square kilometres with potential for significant gold and copper deposits. Killi Resources aims to unlock value through aggressive exploration programs targeting these high-potential areas.
Killi Resources has achieved a 361.5% share price return over the last three months.
Market cap: $24.58 million
LiveHire (ASX: LVH)
LiveHire Ltd is an Australian technology company that provides a cloud-based talent acquisition and engagement platform. The company’s software helps organisations manage recruitment processes more efficiently by creating talent pools, streamlining the hiring process, and enhancing candidate engagement. LiveHire’s platform enables companies to connect with potential candidates, reduce time-to-hire, and improve the overall hiring experience. The company primarily serves businesses across various industries, offering solutions that integrate with existing human resources systems to optimise workforce management. The company is keenly focused on leveraging technology to transform the recruitment landscape and deliver better outcomes for both employers and job seekers.
LiveHire has achieved a 318.2% share price return over the last three months.
Market cap: $14.97 million
Larvotto Resources (ASX: LRV)
Larvotto Resources Ltd (ASX: LRV) is an Australian-based exploration company dedicated to unlocking the potential of gold, copper, and lithium deposits. The company is well-positioned in regions known for rich mineral resources, with key projects such as the Mt Isa copper project in Queensland and the Ohakuri gold project in New Zealand. Larvotto’s approach leverages cutting-edge exploration techniques to identify promising opportunities in largely underexplored areas.
What sets Larvotto apart is its strategic focus on critical minerals, such as copper and lithium, which are essential for green energy technologies and the growing electric vehicle market. Coupled with a management team experienced in both exploration and resource development, the company presents a compelling option for investors interested in sectors poised for long-term growth. The diversification across valuable commodities further strengthens Larvotto’s appeal in a competitive industry.
Larvotto Resources has achieved a 277.6% share price return over the last three months.
Market cap: $117.69 million
Appen (ASX: APX)
Appen Ltd is a global leader in providing high-quality data for machine learning and artificial intelligence (AI) applications. The company works with major technology players to improve AI systems by supplying data used in training models for speech recognition, natural language processing, and computer vision. With a diverse workforce and operations spanning over 170 languages, Appen’s data solutions help optimise cutting-edge technologies across industries.
Appen’s success lies in its ability to deliver scalable, high-quality data sets to some of the world’s largest tech companies, positioning it as a key player in the rapidly expanding AI market. For investors, the company offers exposure to the booming AI and machine learning sectors, which are expected to see continued growth as businesses increasingly rely on automation and intelligent systems to enhance productivity and innovation.
Appen has achieved a 266.7% share price return over the last three months.
Market cap: $417.19 million
Holista CollTech (ASX: HCT)
Holista CollTech Ltd is an Australian company focused on health and wellness, specialising in the development of natural food ingredients, dietary supplements, and medical-grade collagen. The company leverages cutting-edge science to create innovative solutions that address global health concerns, including sugar reduction, immune support, and healthier food formulations. Holista’s patented collagen technology is a crucial component in everything from skincare to pharmaceuticals.
The company’s success is driven by its ability to tap into the growing demand for natural, science-backed health products. With a focus on sustainability and improving consumer well-being, Holista is well-positioned in the health and wellness sector, which continues to see robust growth. For investors, the company offers a unique opportunity to capitalise on the increasing consumer shift towards healthier living, clean-label products, and medical innovations.
Holista CollTech has achieved a 233.3% share price return over the last three months.
Market cap: $5.85 million
Infini Resources (ASX:I88)
Infini Resources Ltd is an Australian company dedicated to exploring and developing energy metals, with a primary focus on uranium and lithium, which are crucial for the global energy transition. The company has a strategically diversified portfolio of projects in resource-rich regions of Canada and Western Australia, encompassing both early-stage (greenfield) exploration sites and more advanced (brownfield) development opportunities. Infini Resources is positioned to leverage the growing global demand for energy metals, driven by the accelerating shift towards renewable energy sources and the increasing adoption of electric vehicles. Through its targeted efforts, the company aims to contribute to the supply of essential materials needed for a sustainable energy future while delivering value to its shareholders.
Infini Resources has achieved a 216.7% share price return over the last three months.
Market cap: $22.04 million
Waratah Minerals (ASX: MHI)
Waratah Minerals Ltd is an Australian mineral exploration company focused on discovering and developing high-grade gold, copper, and other base metal resources. The Spur Project in New South Wales is central to its operations, which has yielded significant gold and copper finds and is the cornerstone of the company’s exploration strategy. Waratah Minerals is committed to expanding its resource base through targeted initiatives, advancing its projects from initial exploration stages toward development and potential commercialisation. By identifying and developing promising mineral deposits, the company aims to create substantial shareholder value and establish itself as a prominent player in the Australian mining sector.
Waratah Minerals has achieved a 195.8% share price return over the last three months.
Market cap: $57.59 million
Merchant House International (ASX: MHI)
Merchant House International Ltd is a global manufacturing and trading company specialising in producing and exporting home textiles, leather products, and footwear. The company operates several manufacturing facilities in China, producing a wide range of products, including gloves, footwear, and home furnishings, which are exported primarily to North American and European markets. Merchant House International focuses on delivering high-quality products to its customers, leveraging its extensive experience in manufacturing and strong relationships with major retailers worldwide. The company is also involved in property development and investment activities as part of its diversified business portfolio.
Merchant House International has achieved a 193.5% share price return over the last three months.
Market cap: $13.20 million
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