With the latest Trump tumbles hitting the market early this week, your focus right now might be on how much you’ve lost so far (and if you’re a growth investor – it’s probably a nasty hit). Still, if you’re an optimist, you’ll be worrying about what to buy and not what to sell in this dip. Growth stocks always feel the pain a bit more in market selloffs, but usually get a bit more pleasure out of any subsequent recovery.
But I don’t need to tell all you growth investors out there that! So here are two ASX growth stocks I’m watching with gusto this week.
Baby Bunting Group Ltd (ASX: BBN)
As the name suggests, this company specialises in all things baby with a network of 53 stores around the country. What’s not in its infancy is the company’s growth – in its 2019 results (released earlier this month) Baby Bunting reported sales growth of 19%, profit growth of 26% and earnings growth of 46%. The company has shown a remarkable ability to stare down competition from both other retailers in the baby space and online competition from the likes of Amazon and this is reflected in its results.
Unsurprisingly, the BBN share price has been on a tear in 2019 so far – rising 34% YTD but still trades on an earnings multiple of around 30.5. This one is definitely on my watchlist and has (in my opinion) what it takes to permanently carve out a lucrative niche in the evergreen baby supplies market.
Northern Star Resources Ltd (ASX: NST)
I couldn’t mention growth stocks today without talking gold. Gold miners seem to be (again) the only stocks making money for investors today, with big price rises across the gold board. Northern Star is among these, banking a one-day 9.3% gain at the time of writing. NST shares have been a (forgive me) gold mine for investors over the last five years – rising over 600% as well as 35% this year alone.
I think gold might be the biggest resource growth play over the next 12 months, and it is a space I’m watching closely going forward. Mid-caps like NST are more volatile than bigger miners like Newcrest Mining Ltd (ASX: NCM), but in a gold bull market, this might well be a boon.
With growth stocks, ‘buying the dips’ can be a successful strategy to keep topping up your profits after your initial investment. Although it’s often a risky play, it has certainly paid off in 2019 so far.
Another hot growth stock to watch is this cannabis company here!
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.