Growth investors look for companies that can expand at above the market rate for the long term.
Of course, no one can predict the future. Nor can they predict whether a company can grow consistently grow in the future, either. But we can try by looking at a company’s past growth history.
Chances are, if a company has been able to grow consistently for many years in the past (say 10 years), it might continue to do so, provided the company’s market size is small in relation to the industry.
Here, we will look at a list of 3 companies that have grown profit at a compounded rate of 15% or more for the last 10 years.
|10-year revenue growth||10-year profit growth|
|Hap Seng Consolidated Bhd (KLSE:HAPSENG; KLSE: 3034.KL)||13%||30%|
|Padini Holdings Bhd (KLSE: PADINI; KLSE: 7052.KL)||15%||13%|
|Kossan Rubber Industries Berhad (KLSE: KOSSAN; KLSE: 7153.KL)||12%||20%|
The three examples have been drawn from a wide range of industries.
Hap Seng Consolidated Bhd, is a conglomerate. Its segments include Plantation, Property, Credit financing, Automotive, Fertilizer trading, Quarry and building materials, and Trading.
Padini Holdings is engaged in textile and garments in Malaysia. The Company’s products are carried under the brand names that include Vincci, Vincci+, Vincci Accessories, Tizio, Padini Authentics, PDI, Padini, Seed, Miki and P&Co.
Kossan Rubber Industries is involved in the manufacturing and sale of rubber products, mainly hand gloves. It operates through four segments: Technical rubber products, Gloves (other than cleanroom gloves), Cleanroom products and others. The company is the second-largest hand gloves company in the world, behind Top Glove (SGX: BVA).
Though the above companies have been growing at an above average rate for the last 10 years, there is no guarantee that they can continue in the next 10 years.
Moreover, companies above started at a relatively small size. As size becomes bigger, growth could become harder to achieve.
Yet, the one that can sustain growth could reward its shareholders.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.