Lower interest rates and an uncertain investment environment make it harder to know where to invest these days. But ASX growth shares could be the best place to find good returns.
Investor sentiment is becoming more cautious on some of the most highly prized growth shares with a short seller targeting WiseTech Global Ltd (ASX: WTC), however the logistics software business still doesn't look cheap.
But I think these three top ASX growth shares could be worth buying for November:
Altium Limited (ASX: ALU)
The electronic PCB software business has seen its share price fall 13% in the past month and a half.
I believe that Altium is one of the highest quality businesses on the ASX with growing profit margins, excellent cash flow, a growing dividend and long-term growth tailwinds as the world becomes more technological.
Altium is aiming for US$500 million revenue and 100,000 Altium Designer seats by 2025 – the company has a long-term plan, whereas a lot of companies only seem to be looking ahead over the next year or two.
It's trading at under 38x FY21's estimated earnings.
Webjet Limited (ASX: WEB)
Webjet has a leading travel site for consumers to buy travel services and it also owns WebBeds, one of the world's largest B2B travel businesses.
Thomas Cook's collapse is going to cause painful hit to profit in FY20. But Webjet is going to be operating for a lot longer than just FY20 and I think the short-term pessimism is presenting a good opportunity to buy for the long-term.
Management are confident on the growth of the business, particularly WebBeds with its potential growth internationally in regions like Asia. Webjet recently said that within the next three years APAC WebBeds TTV could grow to over $1 billion.
Webjet is trading at 13x FY21's estimated earnings with a grossed-up dividend yield of 2.75%.
A2 Milk Company Ltd (ASX: A2M)
A2 Milk may be the best consumer business on the ASX with its in-demand infant formula and other dairy products.
China alone is a huge market that A2 Milk is doing well in where it's growing market share and increasing its distribution footprint. But it's also rapidly rolling out across the US. It can take a while before customers take to a new product, so A2 Milk could be laying the seeds of growth of the next couple of years even if it were to not expand to any other regions for the rest of FY20.
But it is continuing to grow its distribution and supporting that with higher marketing expenditure. Investors may not like the slightly lower profit margin in FY20, but that may turn out to be a short-term mentality mistake if the advertising easily pays for itself in FY21 and beyond.
A2 Milk is trading at just 24x FY21's estimated earnings.
Foolish takeaway
Just looking at FY21's earnings these three shares look good value to me. As long as A2 Milk doesn't suffer any Chinese regulatory issues I think it could be the best pick, but Webjet really looks cheap at this price.
