What are the best ASX growth stocks to watch in 2022?

Posted: 30 November 2021 10:00 am
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Our proprietary algorithm combines a range of factors to determine which ASX stocks could be on a promising trajectory.

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The US typically gets the most attention when it comes to choosing high-growth stocks. And it's no surprise. At the time of writing, the S&P 500 has climbed 26.95% YTD.

Closer to home, growth is still strong but certainly more modest. YTD, the ASX 200 has risen by 10.25%. Of course, there are always outliers in any field. But how do you find them?

Using our proprietary algorithm that considers specific growth factors, including performance over 5 years, performance over 1 year, percentage of growth weeks, percentage of growth days and 1-year revenue growth, we've come up with our top ASX growth stocks to watch in 2022.

For a stock to be included in the list, it must have a market cap of at least $100 million and have been listed on the ASX for at least 5 years.

Of course, while our algorithm's picks are informed by data, that doesn't mean it's a fail-safe solution to choosing stocks. Markets change, pandemics happen and past performance isn't indicative of future results.

But, if you're looking for a local investment which has the potential to outperform, this could be a good place to start your own research.

Novonix Limited | ASX:NVX

Brisbane-based Novonix develops and supplies battery materials, equipment and services to the lithium-ion battery market, primarily in North America. More simply, it's a powerhouse in the rapidly growing electric vehicle battery industry.

As of 23 November, Novonix had a market cap of $4.82 billion and its share price had climbed 671.77% since the start of the year, with a 52-week high of $10.24 against a 52-week low of $1.

IGO Limited | ASX: IGO

IGO is a mining operator which focuses on metals that are required to produce and enable clean energy across Australia.

As well as locations in Western Australia, Victoria and the Northern Territory, it also has an 80% stake in the Greenland-based Frontier project.

With a YTD growth of 54.02% and a market cap of $7.83 billion, IGO saw a 52-week low of $4.53 against a 52-week high of $10.45.

Lovisa Holdings Limited | ASX: LOV

Retail group Lovisa has seen a YTD growth of 85.28% with prices rising from less than $12 per share to more than $21.50.

However, a dip did occur after the company announced a trading update to the market on 22 November, ahead of its annual general meeting (AGM).

Lynas Rare Earths Limited | ASX: LYC

Another mining organisation to make our top 5, Lynas engages in the exploration, development, mining, extraction and processing of rare earth minerals primarily in Australia and Malaysia.

YTD, Lynas has seen growth of 107.89%. It has also seen a 52-week high of $8.71 against a 52-week low of $3.36. Its current market cap is $7.79 billion.

Allegiance Coal Limited | ASX: AHQ

With the smallest market cap among our top picks ($211.4 million) Allegiance Coal has a lower valuation compared to other options identified by our algorithm.

The company, which focuses on seaborne met coal mine development and operations, has seen stocks climb 57.98% YTD.



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