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2 ASX growth stocks I’m watching this week

With earnings season underway and the S&P/ASX 200 (INDEXASX: XJO) index stabilising after the trade war-induced volatility of last week, it may just be a good time to jump back into growth stocks. Although ‘the usual’ growth stocks like Pro Medicus Limited (ASX: PME) were hit hard by last week’s volatility, this is the price you pay for being a growth investor. It also means that it might be a great time to ‘buy the dip’, so here are two ASX growth stocks I’ve got my eye on this week.

REA Group Ltd (ASX: REA)

REA shares were hit hard last week, falling from around $100 at the end of July to just over $91, but this week the share price has almost reversed last week’s falls on the back of yet another successful earnings report released on Friday. REA reported revenue of $875 million for the year (up 8%) and a 6% rise in earnings per share. This result was on the back of a wobbly year for Australian property prices, which further highlights the strength of REA’s business model and its ‘economic moat’ in the classifieds sector.

Although REA has had an incredibly strong year so far (with shares up more than 30%) I still think there is plenty of petrol left in the tank for this growth stock (which is up almost 5% today already)

JB Hi-Fi Ltd (ASX: JBH)

JB is one of those businesses that has had predictions of doom following it around for a long time. First it was the death of CDs and physical music (JB’s vinyl business is booming) then DVDs and computer games. After that, it was the Amazon Australia launch two years ago that sent investors under the bed. JB has weathered all of these storms and gone from strength to strength, making it a top growth stock for me. Although there’s no doubt sales of physical entertainment media are not what they were, JB saw the writing on the wall years ago and now sells all manner of home appliances, phones, and computer accessories at very competitive prices.

JB shares are up 40% for this year alone and yet still pay a 4.5% dividend yield on current prices. JB’s resilient business model and strong share price gains this year places it high on my watchlist.

Foolish takeaway

Both of these stocks have demonstrated the kinds of traits you find in a high-quality business and so make fine growth stocks to keep an eye on this week. REA is your more ‘traditional’ growth stock but JB also has what it takes to be a standout performer in my view.

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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended REA Group Limited. 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.