One thing the Australian share market is not short of is growth shares.
At present there are a good number of shares that are growing their earnings at a rapid rate.
Three of my favourites are listed below. Here’s why I think they could be market-beaters in 2020:
a2 Milk Company Ltd (ASX: A2M)
Although this infant formula and fresh milk company’s growth could now be moderating, I still think it is a quality option. Especially after recent share price weakness left its shares trading at a very attractive level. Furthermore, it may not grow as quickly as it did in the past, but I believe it is well-placed to grow its earnings at an enviable rate. This is thanks to solid demand for its infant formula in China and the growing footprint of its fresh milk business.
Aristocrat Leisure Limited (ASX: ALL)
This gaming technology company’s shares have been on fire this year, rising almost 52%. Despite this, they are still changing hands at under 21x estimated FY 2020 earnings. I think this is great value for a company with such positive long-term growth potential. This is thanks to its industry-leading pokie machines and its fast-growing digital business. I believe the latter business will be a key driver of growth in the future due to the increasing popularity of social and mobile gaming.
Webjet Limited (ASX: WEB)
A final growth share to consider buying is Webjet. Its shares have fallen heavily this year due to concerns over the Thomas Cook collapse. Whilst this has negatively impacted its profits, I don’t believe it is as material as its share price decline would imply. In light of this, I feel now would be a good time to pick up the online travel agent’s shares with a long-term view. Interestingly, analysts at Ord Minnett have just spoken very positively about the company. They believe it can grow its EBITDA by a CAGR of ~14% over the next decade
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Webjet Ltd. 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.