The global spread of coronavirus continues to wreak havoc on the market, with volatility now the new normal. However, for opportunistic investors (with a strong stomach), the current correction in the market presents a great chance to pick up some great ASX growth shares at bargain-basement prices.
Here are three ASX companies that have suffered big drops in their share prices, but should rebound strongly once economic conditions improve.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay had enjoyed a strong start to 2020. Shares in this ASX fintech company had surged to a fresh 52-week high of $4.74 by mid-February. However, shares have now just about wiped off all the gains made this year, shedding over 17% of value and falling all the way back down to $3.92 as at the time of writing.
But rather than scare off investors, I think this dip in the Pushpay share price presents a great opportunity to snap up a growing company at bargain prices.
Pushpay operates in quite a niche market: it develops mobile donating apps for churches. Its payment platform allows members of a church’s congregation to donate funds easily and securely online. It also allows the church to analyse donor trends and activity, meaning they can better target fundraising initiatives.
And it’s big business. Pushpay recently reaffirmed its full-year FY20 revenue guidance of between US$121 million and US$124 million. But if it can expand to reach 50% of the medium and large church segments in the US, the company believes it can generate a whopping US $1 billion in annual revenues.
Pointsbet Holdings Ltd (ASX: PBH)
Shares in ASX corporate bookmaker Pointsbet have been bit hard by the recent market turmoil. Since floating on the ASX at just $2 back in June of last year, the Pointsbet share price had more than tripled to $6.65 by mid-January. But since reaching those lofty heights, it has dropped a staggering 40% to just $3.92.
To a certain extent, this is understandable. In times of market turmoil, it is generally the companies with the highest valuations that are hit hardest. Spooked investors start to take profits off the table, which can soon spark major selloffs.
But for investors with a little extra cash on hand, Pointsbet is another great ASX growth share to snap up cheap right now. Pointsbet has pursued an aggressive growth strategy in the US and has been an early mover in states where changes in legislation have meant restrictions against online gambling have been relaxed.
The company now has a presence in 12 US States with a combined estimated market size of over US $5 billion. Over the last 12 months, Pointsbet has achieved a number of milestones, not least of which was the signing of a new multiyear partnership agreement with the NBA.
Idp Education Ltd (ASX: IEL)
ASX education company IDP has had a crazy start to 2020. Its share price skyrocketed over 40% in a matter of days in February after the release of positive first-half results. But since hitting an all-time high price of $25.17, it has crashed back down to earth, collapsing 22% to $19.60 as at the time of writing.
IDP helps international students secure study placements at universities in English-speaking countries. The company partners with leading universities in Australia, Canada, New Zealand and the US, and is able to provide course advice to prospective students, as well as assist them with administrative tasks such as visa and health cover applications.
In its first-half results, IDP reported revenue growth of 25% against 1H19 to $379 million. And expanding margins meant net profit after tax (NPAT) surged 42% to $57.7 million. At the time, the company claimed that it was not seeing any negative impacts to its revenues as a result of the coronavirus – although continued disruptions to student travel might hurt its business.
Nonetheless, it remains a great growth story and a good company to buy after the dip in its share price.
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Rhys Brock owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Pointsbet Holdings 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.