I think these are the best growth shares on the ASX

One of my favourite areas of the market to invest in is growth shares. These are shares that are expected to generate high levels of earnings growth in the future.

Whilst they are generally higher risk investments than your average share, if you choose wisely I think you can gain a compelling risk/reward.

Three of my favourite growth shares on the local market at the moment are listed below. Here’s why I think investors ought to consider them:

A2 Milk Company Ltd (ASX: A2M)

At this point in time I think there are very few shares on the Australian market with the potential to grow earnings as quickly as this dairy company over the next few years. Thanks to the insatiable demand for its infant formula products from the lucrative China market and its expansion into the north east of the United States, I continue to believe that a2 Milk Company has the potential to be a market-beater for a number of years to come.

Aristocrat Leisure Limited (ASX: ALL)

Although it is best known for its poker machine business, the real growth engine of the company is its fast-growing digital segment. Thanks to a series of transformational acquisitions and the ongoing popularity of its existing product portfolio, I don’t think it will be long before its digital segment is the biggest generator of its revenue. I think this makes it one of the best growth shares on the Australian share market.

Nextdc Ltd (ASX: NXT)

With more and more companies moving to cloud-based products, I believe that this data centre operator is well-positioned to profit from the trend. Its data centres are some of the highest quality centres in the world and the company counts the likes of Amazon amongst its growing customer base. While its shares are a little on the expensive side, I do believe that NEXTDC is capable of growing its earnings at a rate that more than justifies the premium.

If you like growth shares then I think you'll love these hot stocks which have the wind in their sails.

Top 3 ASX Blue Chips To Buy In 2018

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Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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