Leading fund manager Charlie Aitken has named Aristocrat Leisure Limited (ASX: ALL) as a good ASX growth share to own.
Mr Aitken is the chief investment officer (CIO) of Aitken Investment Management, which takes a high conviction, top down and bottom up approach with its investment ideas.
He shared with Livewire his thoughts about why Aristocrat Leisure is a core portfolio holding.
Despite FY19 consensus earnings per share (EPS) estimates falling by only 4.31% during the past six months, the share price has dropped by 36%.
A key attraction about Aristocrat Leisure is that it's trading at 17.8x FY19's estimated earnings, with forecast EPS growth of 19%. This means it's trading with a PEG ratio of less than 1, which is generally a sign of an attractive valuation.
According to the figures that Mr Aitken shared from Evans & Partners research for the December 2018 quarter, summarised from the Eilers social casino tracker, Aristocrat social casino pro-forma revenues (Product Madness & Big Fish) were estimated to have grown 14.7% year on year and 2.4% quarter on quarter. Aristocrat remains the clear number two and it slightly increased its market share compared to the September 2018 quarter.
Some of the reasons to be positive are that Aristocrat social casino revenues continue to grow above market, Aristocrat's multi-app strategy is proving successful with new apps more than offsetting slower numbers from flagship apps, and the overall market continues to grow with the big operators holding onto their big share of the market.
The Aristocrat Leisure share price rose 3.1% on the first day after the US social casino data was released.
Foolish takeaway
However, despite all the reasons to be positive for the medium-term about Aristocrat, Mr Aitken said that he doesn't believe there's any great rush to do anything and that patience in times of volatility will be rewarded.
