Mother’s Day is nearly here, so I hope you’ve gotten something for your Mum.
One thing that I’m sure every Mum wants on their special day is an ASX share tip to potentially beat the market.
Here are three ASX share ideas that could be described as mother or baby related:
A2 Milk Company Ltd (ASX: A2M)
There aren’t many ASX shares more related to children than A2 Milk with its infant formula range of products.
It has been a wonderful business to own shares of, in just two years its share price has increased by 360%. I believe there could be quite a lot more profit growth to come because of the amount of new stores its products are being sold at in China and the US. It usually takes a while for people to switch over, so solid sales growth could continue for at least a couple of years with just today’s distribution network.
It’s trading at 34x FY20’s estimated earnings. It isn’t cheap, but what good business is cheap at the moment?
Baby Bunting Group Ltd (ASX: BBN)
For many parents, Baby Bunting provides some of the first items used for a child’s upbringing. This is even more true as many of Baby Bunting’s competitors have closed over the past couple of years, which has really turned Baby Bunting’s fortunes around. Less competitors is wonderful for Baby Bunting’s same store sales growth.
In FY19, the company expects to generate earnings before interest, tax, depreciation and amortisation (EBITDA) growth of between 34% to 45%, which is a great result for a retailer. Online sales grew by 61% in the recent half-year result, so it’s going well in that area too.
Costa Group Holdings Ltd (ASX: CGC)
Every parent hopes their child will eat healthily. Investing in Costa could be one of the best ways to profit from a shift to healthier eating for children and adults alike.
Costa grows avocados, berries, tomatoes, citrus fruit and mushrooms. As you can guess, it also benefits from other trends such as a growing number of vegetarians.
The fresh food company is expanding its food harvest potential in Australia, China and North Africa – it’s aiming to become a much bigger food company over time.
It’s currently trading at under 20x FY20’s estimated earnings.
I think each of these ASX shares have the ability to beat the ASX index over the next three years and make your Mum happy. If I had to pick one it would be Costa because of the current negative sentiment surrounding it and its international growth plans.
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Motley Fool contributor Tristan Harrison owns shares of COSTA GRP FPO. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia owns shares of A2 Milk. 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.