If you’re looking to invest in a few growth shares in February, then I think the ones listed below could be worth considering.
I believe all three have explosive long term growth potential which could support strong returns for investors over the next decade.
Here’s why I would buy them:
a2 Milk Company Ltd (ASX: A2M)
This infant formula and fresh milk company has been growing its earnings at a very strong rate over the last few years. Pleasingly, I believe it can continue to grow its bottom line at an above-average rate over at least the next few years thanks to the growing popularity of its infant formula products in China and the expansion of its fresh milk footprint in the United States market. And with its shares down almost 20% from their 52-week high, now appears to be an opportune time to invest.
NEXTDC Ltd (ASX: NXT)
Another company which I believe has strong long term growth potential is NEXTDC. I am confident the data centre operator is perfectly positioned to capitalise on the cloud computing boom which continues to accelerate. In fact, global technology research firm Gartner has forecast that 80% of all organisations will shift their workloads to third-party data centres by 2025. I expect this to lead to increasing demand for its innovative data centre outsourcing solutions and connectivity services. I believe this will support solid earnings growth as the company scales.
REA Group Limited (ASX: REA)
A final growth share to consider buying is this property listings giant. Whilst a drop in listings volumes is likely to lead to an underwhelming half year result this month, I believe the recent rebound in the housing market will lead to an acceleration in listing volumes in the second half and into FY 2021. Combined with price increases, new revenue streams, and its growing international operations, I expect this to underpin solid earnings growth from FY 2021 onwards.
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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended REA Group Limited. 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.