MENU

Is your portfolio invested in the best growth shares?

The ASX has a number of excellent growth shares within its ranks like CSL Limited (ASX: CSL), Xero Limited (ASX: XRO), Gentrack Group Ltd (ASX: GTK) and a2 Milk Company Ltd (ASX: A2M).

However, most of the good quality growth shares are trading at high valuations due to their impressive performances. CSL is trading at 38x FY18’s estimated earnings, a2 is trading at 39x FY18’s estimated earnings and REA Group Limited (ASX: REA) is trading at 43x FY18’s estimated earnings.

If you want to beat the market over the next year or so, I don’t think it makes much sense to buy at such a high price.

However, that doesn’t mean you should be scared off growth shares altogether. I strongly believe that the best way to compound your way to wealth is by investing in growth shares. Perhaps overseas is the best place to find good value growth shares.

Some of the best growth shares in the world, Facebook and Alphabet (Google), are growing revenue at above 20% per year like clockwork yet they’re both trading with forward price/earnings ratios in the 20s.

Facebook and Google are both growing their revenues at an impressive rate. Over the long-term they are very likely to continue taking most of the global increased marketing spending by companies.

Facebook has a vast base of regular users that it is only starting to monetise effectively. It isn’t generating any meaningful earnings from Messenger or Whatsapp yet. In the longer-term it could also strongly benefit from the growth of virtual reality (VR).

Google has several segments that would be big businesses by themselves: Search, Youtube, Play, Maps and Android. Youtube is going to win a big share of growth of online video advertising and Google’s automated car, Waymo, could be a big winner for the company over time.

Foolish takeaway

Facebook and Google have driven global share indexes higher, but I think there’s a lot more to come over the next decade.

You could get access to these winners by buying them directly, or investing in them indirectly through many options like BETANASDAQ ETF UNITS (ASX: NDQ), Vanguard US Total Market Shares Index ETF (ASX: VTS), Vanguard MSCI Index International Shares ETF (ASX: VGS), MFF Capital Investments Ltd (ASX: MFF) or one of the funds offered by Magellan Financial Group Ltd (ASX: MFG).

If you want to stick to top quality ASX growth shares, then I suggest you read about these top stocks.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

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%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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 Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!