Some of the most popular growth shares on the Australian market such as Afterpay Touch Group Ltd (ASX: APT) and WiseTech Global Ltd (ASX: WTC) are currently trading on sky-high multiples after rocketing higher over the last 12 months.
While these quality companies may end up delivering results over the coming years that justify the premium, there's no getting away from the fact that their current valuations make them high risk investments.
If you like growth shares but don't want to pay over the odds to own them, then I think the two shares listed below are great examples of growth at a reasonable price (GARP) on the ASX.
Aristocrat Leisure Limited (ASX: ALL)
Aristocrat Leisure is a leading gaming technology company which I believe has extremely bright long-term growth prospects thanks largely to its fledgling digital business. In the first half of FY 2018 the company's Digital segment delivered a 230.6% increase in revenue to $428.5 million thanks to a huge lift in its daily active users to 8.3 million. While the growth of this segment is likely to moderate in the coming years, I still believe it positions Aristocrat Leisure perfectly to deliver above-average earnings growth for some time to come. At present the company's shares are changing hands at 26x estimated full year earnings.
Bellamy's Australia Ltd (ASX: BAL)
Delays to the granting of its CFDA accreditation by Chinese regulators has led to this infant formula star's shares shedding over half of their value since peaking at $23.07. While the delay is disappointing, I believe the selloff is a buying opportunity for patient investors. I don't think it will be long until Bellamy's is granted its accreditation, after which I expect the sale of Chinese-labelled products on the China mainland will give its revenue a major lift. So with its shares changing hands at just 20x estimated FY 2019 earnings, I think now could be a great time to pick up shares. Although I like both shares, I would choose Bellamy's ahead of rival A2 Milk Company Ltd (ASX: A2M) at this point.
