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2 ASX growth shares I’m close to buying

I’m getting close to buying the shares of the two growth stocks I’m going to talk about in this article.

So I’ll get right into it:

Altium Limited (ASX: ALU) 

Altium has been my best investment by far, with my initial investment at around $3.50. I was lucky to pick it at the time and I’ve been lucky it has turned out so well. In hindsight I wish I had bought more, but it can be a big mistake to think you’ve missed the boat on the best businesses despite already doing well.

The world’s best technology businesses have long, rapid growth runways ahead of them for many years to come. I think Altium fits into that group with its various compelling products like Altium Designer, Altium 365 and Octopart which are all growing revenue at good double digit rates whilst growing profit margins.

With interest rates pushed lower, I think Altium’s share price – which is down 14% in under two months – looks even better value.

It’s not cheap at 37x FY21’s estimated earnings, but it could seem cheap in a few years time if interest rates are at similar or lower levels than today.

Webjet Limited (ASX: WEB) 

Webjet’s share price is making a decent comeback after it hit almost $10 earlier this month, it’s up nearly 16% since then.

But I believe there’s more recovery to come. FY20 is undoubtedly going to see an annoying hit to earnings because of the Thomas Cook collapse, but as investors we need to think longer-term than one year.

Webjet management have already said they expect WebBeds’ growth to help push the earnings before interest, tax, depreciation and amortisation (EBITDA) margin towards 50%. Plus the total transaction value (TTV), excluding Thomas Cook, is rocketing higher and further organic growth is expecting in FY21 and beyond.

I think Webjet looks like the type of ASX business that can scale very well and grow the bottom line & dividend at an attractive market-beating pace.

At under 14x FY21’s estimated earnings it could be too good to ignore.

Foolish takeaway

I’d be very happy to buy Webjet shares at the current price, but I’m leaning towards adding more to my Altium holding. Quality is not cheap these days, but I think Altium is likely to reveal the growth necessary to justify today’s valuation (and more hopefully).

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Motley Fool contributor Tristan Harrison owns shares of Altium. The Motley Fool Australia owns shares of Altium. 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.

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