We're already into February 2020 and I've got my eyes on the growth shares that I might buy this month.
Hopefully February will be less eventful than January after a war almost starting between the US and Iran, the spread of the coronavirus and more bushfires.
These are the three ASX growth shares that I'd buy in February 2020:
Webjet Limited (ASX: WEB)
I think that fears about global air travel has really opened up an opportunity to buy Webjet at a discounted price. The Webjet share price has fallen around 20% since the start of last week. It's only travel between China and certain countries that has been temporarily stopped by the coronavirus, the rest of the world continues as normal.
FY20 is proving to be a very disrupted year with Thomas Cook's collapse and now this coronavirus. However, the value of (Webjet) shares is much more than just the next six months.
Not only does Webjet look cheap compared to FY21's estimated earnings, but it could also be a takeover target over the next year or so.
It's valued at 13x FY21's estimated earnings, though I fully expect the share price to be volatile over the next few weeks and months.
PM Capital Global Opportunities Fund Ltd (ASX: PGF)
PM Capital Global Opportunities Fund is a listed investment company (LIC) which focuses on international shares. It has some exposure to China and it also seems to be suffering by association with the discount that has opened up with other LICs over the past year. I think this could be an opportunity.
The LIC has been a solid performer over the past year, three years and since inception. I like the idea of buying good LICs at a discount to their net tangible assets (NTA), with the investment team thinking their own investments are at a good price.
It's trading at a 16% discount to the NTA at 24 January 2020, though I expect the NTA has fallen since then – the NTA for 31 January 2020 should be released later today. I imagine the discount will still be attractively above 10%, a price I'd be happy to pay today.
WAM Microcap Limited (ASX: WMI)
WAM Microcap is another LIC. It has been one of the best-performing LICs sine June 2017 when the LIC was formed, its portfolio return before fees, expenses and taxes has been an average of 21.9% per annum. A strong performance.
I don't expect the next two years to be anywhere near as good, but I do think that small caps are a great hunting ground. And I think WAM Microcap is (clearly) one of the best investment teams at identifying those opportunities.
It's not trading at a big discount, but I think buying it at around NTA is fair for its regular strong outperformance and the value compared to other WAM LICs like WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).
Foolish takeaway
Webjet is definitely the riskiest choice of the three – it would suffer if the coronavirus spreads in cities in another country outside of China, but I think it could be the share to generate the biggest investment returns over the next two years as long as global air travel isn't shut down.
