I believe that the best ASX shares to buy are ones that have good growth prospects.
There's not much point buying a business with limited growth unless you have very good visibility of its cashflow generation.
If I were investing into ASX growth shares, I'd pick these two:
A2 Milk Company Ltd (ASX: A2M)
A2 Milk is trading at 27x FY21's estimated earnings.
A2 Milk has been one of the best businesses to come out of Australia and New Zealand. It has a great brand with an image of high quality. The company has taken a number of basics like milk & infant formula and turned them into a luxury position in the market.
The biggest reason why I think it's a growth share to watch is the international growth. There are few ASX companies that are growing strongly in the US or China, let alone both of the major economies. A2 Milk has two large growth runways here.
Excitingly, there are plenty more products that A2 Milk can release to grow further. There are many other countries that A2 Milk doesn't have a full presence in like it does in Australia and New Zealand.
Webjet Limited (ASX: WEB)
Webjet is trading at 16x FY21's estimated earnings.
Webjet is another quality ASX business that's taking on the world. Most Aussies will recognise Webjet as a leading travel business that you can find cheap flights, hotels or package deals. This is a good, attractive part of the overall business.
However, it's the B2B side of the business that is predicted to grow the most over the coming years. Management believe WebBeds can reach an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 50%. WebBeds is also growing revenue at an impressive organic rate. When you combine these two elements you should get fast earnings growth and market-beating share price returns.
A potential takeover could put a rocket under the Webjet share price this year.
Foolish takeaway
Both businesses are expected to grow at an impressive rate between FY19 and FY21, yet these two shares trade at a much cheaper earnings multiple compared to the well-known fast-growth tech shares. I'd be very happy to buy shares of both of them today, particularly Webjet.
