One thing that the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is not short of is quality growth shares.
I believe there are a large number of companies on the benchmark index which have the potential to grow their earnings at an above-average rate over the next decade.
Three of my favourites are listed below. Here's why I would buy them next week:
Appen Ltd (ASX: APX)
I think that this global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence would be a great long term investment option. Due to the increasing demand for quality training data from the accelerating AI market and the highly successful acquisition of the Leapforce business, Appen delivered an incredible 153% increase in underlying EBITDA to $71.3 million in FY 2018. Due to the speed in which the AI market is growing, I believe the company is well-positioned for further strong growth this year. Furthermore, I expect the acquisition of Figure Eight this month for up to US$300 million will strengthen its position in the industry and be a big boost to its growth from FY 2020 onwards.
Aristocrat Leisure Limited (ASX: ALL)
I believe that this leading gaming technology company is one of the best examples of growth at a reasonable price on the Australian share market. At present its shares are changing hands at just 19x estimated forward earnings, which I believe is cheap for a company with such strong long-term growth potential thanks to its robust core business and fast-growing digital business. The latter has exposure to the rapidly growing social and mobile gaming market and has the potential to generate significant recurring revenues. At the end of FY 2018 the segment had 8.1 million daily active users.
Webjet Limited (ASX: WEB)
Another top growth share to consider buying next week is this leading online travel agent. Thanks to the growing popularity of its numerous brands and the shift to online booking, Webjet has been growing at an impressive rate over the last few years. Pleasingly, this has continued to be the case in FY 2019, with the company recently releasing a strong half year result. In the first half Webjet posted a 42% jump in EBITDA to $58 million. The good news is that management expects more of the same in the second half and remains very positive on its medium term outlook.
