ReadyTech (ASX: RDY) is in our view one of the best tech stocks on the ASX. It has a track record of growth, serves inflation-proof end markets and is set for good growth in the years ahead.

ReadyTech provides SaaS technology in Australia and operates in three segments: Education, Workforce Solutions and Government and Justice. It offers various cloud-based solutions that help their clients with administration and management. ReadyTech was founded in 1998 and listed on the ASX in 2019 at $1.50 per share. Although it is off its all time highs, it is still well ahead of its IPO price.

Organisations in all three segments of ReadyTech’s business – Education, Workforce and Government – are experiencing a growing and ongoing migration to cloud and SaaS. This digital transformation across all industries is nothing new, but what is news that this transformation has been accelerating in the wake of COVID-19 shutdowns as demand soared for technology-driven initiatives to enable remote work, distance learning, new customer experiences and new online sales channels. We think the trend is still in early days and that ReadyTech is poised to derive a benefit.

In FY23, the 12 months to June 30 2023, ReadyTech recorded $130.3m in revenue, up 31.9% overall and 13.3% on a like for like basis (excluding the impact of M&A). EBITDA rose over 22% to $34.8m – representing a 35.6% margin – while NPAT rose 7% to $9.1m. The company boasted a highly sticky customer base that is willing to pay a premium for its services.

For FY24, ReadyTech has advised shareholders to expect organic revenue growth to be in the mid-teens and a 34-35% EBITDA margin. It is aiming to achieve over $160m in organic revenue in FY26 and says its high conviction pipeline of $28m gives it confidence that this can be achieved.

Xero (ASX:XRO) is one of the ASX’s best-performing tech stocks over the last decade, offering accounting software helping SMEs do business. Although the company was caught up in the Tech Wreck of 2022, shedding half of its value across that calendar year, it bounced back with a vengeance in 2023, and we think there's more growth to come in 2024.

Xero is all about helping small & medium sized businesses do business. The company, which has over 3 million subscribers, primarily sells accounting software that helps businesses keep books, pay bills and send invoices. But it has gradually developed features useful beyond book-keeping, such as storing files, converting currencies, keeping track of inventories and creating professional quotes.

Clearly, Xero is an essential service to its customers….it’s very hard to switch it off just to save a few bucks. And what incentive is there to switch to another solution like an MYOB? Very little. Whatever few bucks would be saved, would be lost in the long-run. Xero’s tools are estimated to save its customers on average 5.5 hours of manual work per week. We guess that is why its churn was only 0.9% in FY23, even amidst inflation.

As if that wasn't good enough, the company continues to innovate over time, is growing faster outside Australia and New Zealand than outside, is expected to record its first profit in FY24 and still has some room for growth. The company believes the TAM (Total Addressable Market) is NZ$100bn and that is just the top 3 jobs its software is used for – Accounting, Payroll and Payments. Adjacent Tasks, including other tasks such as inventory, CRM and project management, could be another $39bn. The company has the explicit goal of doubling revenues in the next few years.

Infomedia (ASX:IFM) is one tech stock that was unfairly sold off during the tech-wreck, but is gradually rebounding with a vengeance. The company has a long-term track record of growth, has remained profitable and is at the forefront of several trends in the automotive industry.

IFM provides cloud-based parts and service software to the global automobile industry. It has over 250,000 active users in 186 countries and it has a healthy geographical mix of revenue (37% from the Americas, 32% from the Asia-Pacific and 31% from Europe). Infomedia can help its customers capture data, provide more personalised service to existing and would-be customers and monitor supply chains.

It has had some difficulties during the pandemic including the difficulty of business development during pandemic restrictions, the volatility in car sales and potential takeover bids falling through.

Turning to FY23, Infomedia’s total revenue was $129.9m (up 8%) and its NPAT was up 16% to $9.6m, even with an acquisition earnout expense. It paid a total dividend of 4cps, representing a 2.8% yield. Looking ahead to FY24, it is expecting revenue of $135-142m but has not given any other guidance besides that. Analysts covering the company expect $140.4m in revenue (up 8%), $59.4m in EBITDA (also up 8%) and 5c EPS, equating to a ~$18.8m profit (nearly double the year before).

We think the company can capitalise on several trends being adopted in the automotive industry including electric vehicles, the dealer agency business model and data-driven marketing.

Turning to the mining and resources sector, De Grey is one of our favourites. It is developing a gold project in WA with the aim of starting production in CY26. Its project, the Hemi project, has over 10Moz of gold and could well be a top 5 Australian gold mine.

It would deliver $4.5bn in free cash flow after tax, a payback of less than 2 years despite a capital cost of nearly $1.3bn. And it is set to begin production in the second half of CY26. Chalice will have barely made an Final Investment Decision (FID) by then.

The DFS showed an NPV of $2.9bn post-tax, representing an IRR of 36% at an AISC of $1,295/oz over the first 10 years. The total evaluation period economic contribution is a staggering $10.8bn.

The company's share price has benefited from the rally in gold stocks, not to mention continued exploration work from the company showing there could be more upside. Full construction will start later this year.

Breville is a premium kitchen appliances business with a presence in Australia, Europe and the Americas. It was founded in 1932 – founded from capital obtained from a successful 4-to-1 bet at the 1932 Melbourne Cup. 

Breville sells nearly $1.5bn in goods each year in over 100 countries globally and caters to middle to higher income earners. It is headquartered in Sydney, has manufacturing facilities in China and regional offices in key markets.

Breville listed in 1999 and has achieved growth of over 2000% since. In the last 10 years, it has gained 200%. In FY23, it generated $1.48bn in revenue (up 4%), $172m in EBIT (up 10%) and a $110.2m NPAT (up 4.2%). It recorded a 35% gross margin. The 4% revenue growth is hardly earth shattering, but follows 3 years of revenue growth of 19-25%. In 1HY24, it achieved $906m in revenue (up 2%), $131m in EBIT (up 8.2%) and a $84m NPAT (up 6.7%).

The company was impacted in the past two years due to fears that inflation would impact consumer demand and the company's costs, not to mention the company's inventory uplift. Neither of the former two came to pass, while the latter issue has been resolved.

We think there are four reasons why Breville can grow. First, it’s track record of sales growth with 14.6% CAGR in EBIT over the last seven years. While this isn’t a guarantee it can achieve the same results, it does inspire confidence. Second, the company’s experience in successfully entering new markets. The company estimates 70% of its revenue potential is unaddressed and it could ultimately achieve $9.7bn in revenue.

The third reason is the market the company is in. Breville offers premium and functional goods, targeted at consumers with higher disposable income. It is therefore less likely to be hit by a slowdown in consumer spending, at least to the extent of companies targeting lower incomes. Consumers feeling the pinch might view upfront investments in Breville’s products – coffee machines, ovens and juicers – as saving money in the long run. And consumers already with appliances and needing new ones won’t put off purchasing a new one for too long. Fourth, we observe that Breville has not had the same supply chain issues other companies have had. Unlike Kogan (ASX:KGN), Breville did not over-invest in new inventories predicting the boom would go on indefinitely.

Reliance is a plumbing supplies company that is the largest manufacturer of PTC (Push to connect) behind the wall plumbing fittings. Reliance Worldwide’s flagship product is the Sharkbite range of brass push-to-connect fittings (as pictured below). These devices avoid the traditional soldering of parts into place, saving plumbers time.

It has proven resilient to inflation because of its ability to pass increases onto its customers. In FY23, Reliance Worldwide increased its net sales by 6% to $1.24bn. The Americas has been a strong contributor with sales growing 13% in that region, compared to a 4% decline in the Asia-Pacific and 3% growth in EMEA.  Although its NPAT came in at $155.7m (down 4%), its cash from operations more than doubled to $292.7m. It paid a dividend of 9.5 cents per share.

For 1HY24, its net sales were down 2% to $589m, although this was in line with guidance. Its NPAT was flat, at US$67.7m, but cash flow from operations was up 61% at US$151.6m. The company reduced its net debt by US$142m within 12 months.

In investors looking for a growth stock in the industrial sector that will be immune from the worst of inflation will find it tough to find a better company (at least in the industrials sector).

CSL (ASX:CSL) is the ASX's largest healthcare companies and one of the very few that is capitalised at over $100bn. It is best known for its flu vaccines and blood plasma businesses but has other products too and undertakes major R&D work.

CSL was once a government entity, established in 1916. It was privatised in 1994 at $2.30 a share, although it undertook a three for one share split in 2007 making its IPO price 76.7c in real terms, meaning it has been more than a 300-bagger since listing!

The company's most recent gamble has been to pay US$11.7bn for Swiss company Vifor Pharma. CSL is evidently looking to profit from kidney disease, which affects 850m people globally – a figure expected to grow given the global obesity epidemic. It has faced challenges in justifying this price tag to investors, especially given the rise of Ozempic.

CSL has faced an uncertain outlook given the threat of Ozempic, falling margins and skepticism about Vifor. We, however, are confident in the company.

Even if Ozempic could indeed reduce obesity, and with it reduce people developing kidney disease in the future, it would not help people who already have the disease. The cooling of inflation should help its vaccines and blood plasma businesses. And we are also confident in the company's future products. The biggest catalyst in the latter regard is potential FDA approval of Hemgenix (the world’s first gene therapy for haemophilia B).

Universal Store is a chain of casual fashion stores aimed at Millennial and Gen Z customers (think 18-35 year olds). Universal Store has 79 stores across Australia, which tend to be in major shopping centres, as well as a further 20 or so stores exclusive for particular brands like Perfect Stranger, and the group makes 14% of its sales online. Both curated third-party products and private brand products are sold in-house, although the former dominates.

It is a good business, but has been hit by perceptions that its customers will cut back their spending because they feel the brunt of the cost of living crisis. We think the recent Taylor Swift shows and the merchandise spent by them (estimated to be over $60m at the concerts alone) show that they will still spend when they perceive value.

In FY23, total Sales were up $263.1m, up 26.5% overall, although like for like sales were only up 1.2%. It made underlying EBIT of $40.4m, up 24%) and an NPAT of $23.6m, up 15%. Not bad in the rising interest rate environment. This was because the company was better able to manage inventory and offset costs of doing business. We are optimistic for further growth in the next 12 months as the Stage 3 Tax cuts come into effect. The revised package will put more money into the pockets of Universal Store's customer base.

Cyclopharm (ASX:CYC) is a radiopharmaceutical company that is responsible for Technegas, a proprietary functional lung ventilation imaging agent.

Essentially, a patient inhales Technegas before undertaking a Ventilation-Perfusion (VQ) scan and it makes the lungs easier to see. The company makes revenues through Technegas generators, but also through consumables and after-sales services of the devices. Technegas is not only less damaging than alternative agents but is highly accurate, is quick and simple to administer and has minimal exclusion criteria (in other words, it can be administered to almost all patients including those with chronic lung obstruction disease).

Technegas is approved and/or sold in over 60 countries globally, a list that has only included the USA since October 2023. 2024 is set to be a key year for the company as it enters the world's largest healthcare market.

The company estimates that there is a market opportunity of US$90m or 600,000 procedures. Cyclopharm is targeting 80% of these, or 480,000 of these and believes it can achieve a 50% market share in 2-3 years and 90% in 5-7 years.

Cyclopharm is also seeking to expand the use of Technegas against other indications that could be larger markets - including COPD, asthma and Long COVID.

The last stock on our list is Australia's newest gold producer. It bought its namesake project in WA in 2016 that had been an operating mine from 1897 to 1997, had produced nearly 1Moz (million ounces) of gold but had appeared to run out of life.

The company began a drilling campaign in the last quarter of 2017 and has never looked back, delivering a return of over 5000% to investors.

It has Total Mineral Resources of 9.8Mt at 9.9 g/t for 3.1Moz of gold. 1.7Moz of this is Indicated with the balance inferred.  This makes it one of Australia’s highest-grade gold mines. The company forecasts a 10 year mine life and for $2.1bn of free cash flow, assuming a gold price of A$2,500/oz. This is the stuff dreams are made of.

BGL has issued guidance of 75,000-85,000oz production for the first six months of CY24, along with positive free cash flow, and confirmed earlier this week that it is on track to achieve this.