London Office (Head Office)

70 Pall Mall, St James's

London SW1Y 5ES

United Kingdom

Melbourne Office

Level 27, 35 Collins Street

Melbourne, Victoria

Australia 3000

Sydney Office

Level 36, 1 Macquarie Place

Sydney, New South Wales

Australia 2000

AU: + 61 (3) 9001 0243

UK: + 44 (0) 207 965 4701

enquiries@mayfair101.com

Send us a message
Subscribe to our newsletter
Keep up with the latest updates
  • LinkedIn - White Circle
  • YouTube - White Circle

Disclaimer

Online Investments Pty Ltd t/a Mayfair 101 (ABN 981 34 785 890) provides investment and corporate advisory services including funds management, asset management, capital raising, corporate advisory, M&A (merger & acquisition) advisory, and direct investment either directly or via its wholly owned subsidiaries.

 

Mayfair 101 is a Corporate Authorised Representative (CAR # 001274568) of Quattro Capital Group Pty Ltd (AFSL # 334653). Mayfair 101's authority under its Corporate Authorised Representative Agreement with Quattro Capital Group Pty Ltd is limited to the provision of financial services to Wholesale clients only pursuant to the Corporations Act (Cth), including advice relating to deposit products, foreign exchange contracts, derivatives, interests in management investment schemes, and securities.  Mayfair 101 and its wholly owned subsidiaries are not deposit-taking institutions in Australia or the United Kingdom and are not authorised to conduct retail banking activities as specified in the Banking Act 1959 (Cth). 

Mayfair 101 Limited is an Appointed Representative of Sapia Partners LLP, a firm regulated and authorised by the Financial Conduct Authority in the United Kingdom.  Mayfair 101 Limited’s activities in the United Kingdom and the activities of Mayfair 101 in Australia, should be considered as separate activities.

© 2019 Mayfair 101. All rights reserved.

Investor Education Centre > Investing as a Company > Believe it or not: Many Companies Pay 15%+ for Access to growth capital

Believe it or not: Many companies pay 15%+ for access to growth capital

To some, growth capital isn’t seen as an investment tactic that yields the best results. It almost feels unnatural to do anything other than purchase stocks that are trading at below their intrinsic value. However, many people also see the high potential that growth investments have. When you make the right investment in a company that’s emerging into a new market, you may enjoy impressive returns of 15% or more.

In order to see yourself hit the 15%+ target, you need to know what to look for. With some of our leading tips, investing in growth capital could become one of the wisest financial strategies you take.

 

Don’t ignore the strong historic growth numbers

When considering each company, examine their numbers from the last five to 10 years. If it has shown strong growth in the past, it’s likely to do so going forward. The growth percentages you’re looking for should remain realistic to the company’s size. For example, when a company is valued at $400 million or less, 12% is suitable. However, if they’re larger than $7 billion, 4% is passable.

 

Know your emerging markets

Some of the best growth investments come from targeting those companies that are moving into emerging markets. They may already hold a strong position in the market they serve, but they’re branching out into something similar. One example of this is Airbnb, a company that faced stiff competition in the increasingly challenging travel market. In a bid to keep up with the pace, the company expanded into tours. Similarly, Uber branched away from providing its taxi app service and created Uber Eats.

Look at the company’s profit margins

It’s possible for a company to experience astounding gains in terms of sales but suffer from poor profit. This is because the overheads eat into their sales, leaving them with poor profit margins that you can’t reasonably expect to generate returns of 15%+. To calculate a company’s profit margins, look at all the expenses from sales (minus taxes) and divide those expenses by the sales. If the company you’re looking at has enjoyed consistently high gains in earnings over the last five years, it’s likely a wise investment choice.

Aim for stocks that can realistically double in five years

A key indicator that a stock is a growth stock is whether or not it’s likely to double in the next five years. Naturally, nobody can predict the future. But you can use the public information you have to hand to see if this is likely. If a stock is to double in five years, it needs to have a consistent year-on-year growth of 15%. Look at historical trends alongside other determining factors and make your best judgement from there.

It’s possible to find growth stocks in almost any exchange. Overall, we recommend always keeping markets that are likely to boom in the back of your mind; the ones where consumer demand is likely to consistently increase have the best potential.

Mayfair 101 established IPO Wealth to specifically cater for High Net Worth investors seeking income-producing investments.  For more information visit www.ipowealth.com.au

Disclaimer

This website contains general information only and is not intended to provide any person with financial advice. It does not take into account any person's (or class of persons) investment objectives, financial situation or particular needs, and should not be used as the basis for making investments.

In the Media