We’re nearly in December, the final month of the year. Some market commentators think a ‘Santa rally’ regularly happens, so it’s worth picking out three ASX growth shares for your watchlist that you might pounce on.
Here are some ASX growth shares I’m considering buying next month:
Costa Group Holdings Ltd (ASX: CGC)
Costa is one of the largest food businesses on the ASX.
It grows berries, avocados, mushrooms, tomatoes and citrus fruit. However, when it first launched it didn’t produce all of those categories. Indeed, avocados is a fairly recent addition.
That leads me to believe that Costa may add additional fresh food categories over time. Management are predicting that underlying earnings can grow by low double-digits for the next five years. There could be positive surprises with additional acquisitions.
Costa is also investing in productivity improvements and expanding its plantations. It’s growing in various ways, I think it could be a solid growth share for a number of years.
It’s trading at 28x FY19’s estimated earnings with a grossed-up dividend yield of 2.5%.
BetaShares Asia Technology Tigers ETF (ASX: ASIA)
Rising interest rates and trade wars have seen the Asian share prices fall significantly. This has caused many of the leading technology shares like Tencent, Baidu and Alibaba to fall in value.
This BetaShares exchange-traded fund (ETF) gives us exposure to Asia’s leading tech shares, in a region where the Chinese middle class is growing quickly in size and even quicker in wealth. Just like Apple, Alphabet (Google) and Amazon have shown what can happen with teh growth, I think the Asian equivalents will do well. Samsung is another example of a leading Asian business in this ETF.
At some point you would hope that the US and China works things out, which could cause the value of Asian businesses to quickly recover.
According to BetaShares, it’s trading with a price/earnings ratio of just over 11 with a trailing dividend yield of 1.5%.
Reece Ltd (ASX: REH)
Reece’s share price has fallen by nearly 20% since the start of October.
Reece ticks a lot of boxes that we should look for in a business. It has long-term management, the management are aligned with shareholders because they’re huge investors themselves and Reece continues to do wonderfully under their stewardship.
The recent US acquisition of MORSCO opens up a whole new market to Reece. Indeed, around half of Reece’s earnings will now come from the US. Overseas expansions have been dangerous for some ASX businesses, but this could be the right one for Reece.
These three shares could be some of the best ones to own over the next three years. I’d like to see Reece’s next report before considering an investment. I’m very interested in making the Asian technology ETF a decent, but small, part of my portfolio considering the seemingly good opportunity of Asian growth over the next decade.
Motley Fool contributor Tristan Harrison owns shares of BetaShares Asia Technology Tigers ETF and COSTA GRP FPO. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia owns shares of BetaShares Asia Technology Tigers 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.