Although the high multiples that some growth shares trade at can be off-putting for many investors, I believe that strong market positions and growth prospects can make it worth paying a premium to own certain shares.
Two top growth shares which I think are great buy and hold investments at their current share prices are listed below. Here's why I like them:
CSL Limited (ASX: CSL)
As one of Australia's leading companies I believe CSL is worthy of trading at a premium over the market average. Although at present the biotherapeutics company's shares are changing hands at approximately 38x trailing earnings, it is worth noting that CSL expenses its substantial research and development costs rather than capitalising them. If these costs were capitalised then earnings per share would be significantly higher. But regardless of this, I believe its core business and soon-to-be-profitable Seqirus influenza business put it in a position to deliver above-average earnings growth over the next few years.
Nextdc Ltd ASX: NXT
As one of the world's leading data centre operators, I think that NEXTDC is one of the best long-term buy and hold investment options on the market today thanks to the rise of cloud computing. Companies including the likes of Google and Amazon are amongst its customers and it isn't hard to see why when its recently opened data centres have the highest level of accreditation available. While its shares look incredibly expensive at 134x estimated forward earnings, I believe the company will more than grow into its valuation as it scales. Earnings growth in FY 2018 is expected to slow due to the investments it has made, before accelerating greatly again in FY 2019. But considering its sky high multiple, it is potentially only suitable for those with a high tolerance for risk.
