3 top ASX growth shares I'm buying in July

My eyes are set on Altium Limited (ASX: ALU) and these two other ASX growth stocks for July that are poised for more market-beating results.  

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In anticipation of earnings season, my eyes are set on these three growth stocks for July. These companies have been ASX stars in 2019 and are poised for more market-beating results.  

Altium Limited (ASX: ALU)

Arguably one of my favourite ASX tech shares, Altium continues to impress. The company's main product is Altium Designer, a world class software-as-a-service (SaaS) tool for designing printed circuit boards (PCBs).

For its HY, Altium reported its cash balance to have increased 11% and the company remains debt-free. It also has a high return on capital employed of 31%, significantly higher than the average in the software industry of 19%.

In the last month, the company's share price has risen 18% to $35.27. This has also driven its price-to-earnings (P/E) ratio up to 99x, which may sound incredibly overvalued. However, given the company's track record of beating investor expectations, strong balance sheet, and successful international expansion, this could be a fair price to pay.

Aristocrat Leisure Limited (ASX: ALL)

Aristocrat Leisure is an Australian lot machine developer. It has been particularly strong in expanding in its Americas and digital business, as well as gaining higher penetration in the ANZ region.

The company has achieved strong growth rates to date. In the six months to March 2019, Aristocrat's bottom line grew by 16.8%. It also improved its earnings before interest, taxes, depreciation, and amortisation (EBITDA) by 10.2%, year-on-year, over the same period.

Aristocrat's share price has cooled slightly, falling 7.1% from its peak around two weeks ago. Despite this, its P/E multiple remains relatively high at 29x. This seems reasonable as the company has grown its annual earnings per share (EPS) by 38% compounded over the last 3 years.

BrainChip Holdings Ltd (ASX: BRN)

BrainChip is a semiconductor company in its early stages of developing a neuromorphic system on a chip (NSoC) called Akida. Akida is a hardware version of a biological neuron, making it much more advanced and efficient than current day technologies.

In the last two weeks, its share price fell 26% lower to 6.4 cents. This was due to the completion of an institutional entitlement offer, raising $6.7 million from issuing a further 112.7 million shares. This cash will be channelled towards developing and manufacturing of its Akida product, supported by a partnership with Japan's Socionext that was announced in June.  

This price could be a bargain, given BrainChip's unique position in the market and its clear route to commercialisation in 2019. Its spiking neural network (SNN) technology will also be critical as industries like autonomous vehicles require more efficient AI for applications like visual imagery classification.  

Motley Fool contributor Audrey Thehamihardja has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium. 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.

More on Technology Shares

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Five happy friends on their phones.
Share Market News

Goldman Sachs says these ASX tech stocks can rise 18% to 30%

The broker sees big returns on offer from these shares.

Read more »

A guy helps a girl lift a couch, both are laughing.
Technology Shares

3 of the best ASX tech shares to buy and hold until 2030

I think these stocks have exciting futures.

Read more »

A young woman uses a laptop and calculator while working from home.
Technology Shares

If I'd put $5,000 in Block shares 5 months ago, here's what I'd have now

Was it a good idea to invest in this payments stock five months ago?

Read more »

Close up of a sad young woman reading about declining share price on her phone.
Technology Shares

Why is the Brainchip share price sinking over 7% today?

What's going on with this tech stock on Wednesday?

Read more »

woman working on tablet
Technology Shares

Missed out on Nvidia? My best ASX tech stock to buy and hold

Do you have FOMO after the US chip maker's share price rocketed? Here's an Aussie company worth backing instead.

Read more »

Three businesspeople leap high with the CBD in the background.
Technology Shares

Guess which ASX small-cap stock is rocketing 45% on 'pivotal moment'

Investors have responded very positively to an announcement.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why are these ASX tech shares getting smashed today?

Owners of these two stocks are missing out today.

Read more »