One of my favourite shares on the Australian share market right now would have to be Aristocrat Leisure Limited (ASX: ALL).
Here are four reasons why I would buy the gaming technology company’s shares this week:
- Market-beating returns.
Over the last 10 years the Aristocrat Leisure share price has been a strong performer for investors. During the time its shares have provided an average annual total return of 25.3%, which means that a $10,000 investment in its shares 10 years ago would be worth over $95,000 today. I believe the company is well-positioned to continue this trend for many years to come.
- Strong core business.
Aristocrat Leisure’s core pokie machine business has gone from strength to strength over the last few years and has been winning market share away from its competitors. The good news is that things continue to look positive for the segment in the near-term. According to a recent note out of Goldman Sachs, it has noted a benign step up in competition from slot manufacturers. As such, it believes its outlook remains very robust.
- Explosive Digital business.
The star of the show in the first half of FY 2018 was Aristocrat Leisure’s Digital business. It delivered a 230.6% increase in revenue to US$428.5 million thanks to the strong performance of its Cashman Casino game and the acquisitions of Plarium and Big Fish. The segment finished the period with 8.3 million daily active users, up from 1.4 million a year earlier. I expect the segment to generate high levels of recurring revenues for the foreseeable future.
- Growth at a reasonable price.
Despite its strong growth and positive outlook, Aristocrat Leisure’s shares are currently changing hands at just 24x estimated full year earnings and 19x estimated FY 2019 earnings. I believe this makes the company a great option for investors looking for growth at a reasonable price. Especially given how other comparable growth companies such as Afterpay Touch Group Ltd (ASX: APT) and WiseTech Global Ltd (ASX: WTC) are trading on significantly higher multiples.
And here are three more top growth shares that I would buy this month.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. 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.