A number of the most popular growth shares on the ASX have recently hit a spot of turbulence and pulled back significantly from their 52 week highs.
Two top growth shares that have pulled back meaningfully are listed below. Is this a buying opportunity for growth investors?
The Afterpay Touch Group Ltd (ASX: APT) share price is down 26% from its 52 week high of $23.00 despite an impressive 15% gain last week. Profit taking has weighed on its shares since the buy now pay later company raised $117 million via an institutional placement at $17.05 per share late last month.
Those funds were raised so that Afterpay Touch could expand its service into the UK market. I believe the service could be a big success in there and in the U.S., putting the company in a great position to deliver strong revenue growth over the next decade. However, there's no denying that its shares are high up on the risk scale and have a significant amount of future growth already built in. I would suggest investors consider just a small investment if their risk profile allows it.
The Bellamy's Australia Ltd (ASX: BAL) share price has plunged a staggering 59% from its 52 week high of $23.07. The catalyst for this decline has largely been unexpected delays in the infant formula company gaining its CFDA accreditation required to sell its Chinese-label products in the lucrative market.
While the delays are certainly a disappointment, I suspect that its accreditation isn't far from being granted. Once this is granted I believe its sales and earnings will grow strongly, especially given management's premiumisation plans which should result in higher margins. So with its shares trading at 25x earnings I think now could be a great time to snap up shares. I would choose Bellamy's ahead of rival A2 Milk Company Ltd (ASX: A2M).
