ASX growth shares are all at discounted prices after the coronavirus caused a selloff.
We don’t know if the bottom has already been reached, but with central banks around the world promising support it seems the market is unlikely to go into freefall.
Before the market opens, I’ve got my eyes on these three shares:
Webjet Limited (ASX: WEB)
Webjet is one of the companies on the ASX that has seen its share price fall the most because of the coronavirus. Travel has already been affected and we may seen more travel disruption before this is over.
However, the fact is that the company’s share price has plunged to $9.50 when this is only a shorter-term issue. I imagine by the end of 2020 it will be fading away, or at least a country will probably have developed a vaccine by December.
Webjet was getting close to being taken over before the selloff occurred. Looking out two years, I think Webjet could produce strong shareholder returns at the current price, but short-term volatility could be here for a while.
Altium Limited (ASX: ALU)
The electronic software PCB business has seen its share price fall after its HY20 result and updated guidance for FY20.
However, the company remains on course for its longer-term goals of US$500 million revenue as well as 100,000 Altium Designer subscribers. If it achieves these goals its earnings before interest, tax, depreciation and amortisation (EBITDA) margin could reach 40% or even higher.
Altium has an excellent balance sheet with great cashflow which means it can ride through any tough times, perhaps it could make a useful bolt-on acquisition with the cash.
Pushpay Holdings Ltd (ASX: PPH)
The donation payment business is growing at a strong rate in US churches as it benefits from people giving a regular annual amount.
It’s the type of company that benefits from strong network effects, which sees the profit margin improve as it adds more revenue (which is exactly what’s happening). This combination of fast revenue growth and growing margins means the net profit can grow at a very fast rate.
The recent Church Community Builder acquisition is a savvy move which could see the company appeal even more to clients and increase organic revenue.
All three of these growth shares have great prospects over the coming years. I think Webjet could make a strong comeback when the coronavirus subsides.
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Motley Fool contributor Tristan Harrison owns shares of Altium. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. 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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