The ASX growth shares known as the WAAAX club were some of the best investments on the ASX in both 2018 and 2019.
WiseTech Global Ltd (ASX: WTC), Appen Ltd (ASX: APX), Altium Limited (ASX: ALU), Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) all managed double-digit share price growth over these two years – with a couple even managing triple-digit returns for their lucky investors.
But 2020 has seen a different story so far. Due to the coronavirus and subsequent economic lockdown, most ASX shares have seen some pain.
But the WAAAX club bore a rather disproportionate amount, at least during the worst throes of the March downturn.
As an example, buy now, pay later king Afterpay went from over $40 a share in February to around $8 in March.
WiseTech shares suffered a similar burn – falling from nearly $30 in February to under $10 in March.
For Appen, Altium and Xero, this fate was spared, although Altium and Appen did suffer losses much larger than the S&P/ASX 200 Index (ASX: XJO).
But in recent weeks, this loss of fortune has had a major reversal. Afterpay is back to around $30 a share and Xero has returned to levels seen in November last year. Appen, Altium and WiseTech (to a lesser degree) have also seen strong recoveries.
So are these tech high-flyers still a worthy investment in 2020?
WAAAX on?
Like many ASX shares, I think the impacts of the coronavirus are still not clear enough to make a truly informed decision on the WAAAXers.
Take Afterpay for instance. The market was clearly worried many of Afterpay's customers would be unable to service their debts as it became clear we were entering into a recession. But the company more than assuaged these concerns when it informed the market that March had been its third-best month on record for customer purchases through its platform.
This uncertainty caused Afterpay's market capitalisation to swing 80% within a few weeks – talk about volatile!
WiseTech is probably going to be the company that will struggle the most. Its CargoWise software assists the global logistics industry – which is heavily struggling in the current environment.
Xero's customer base is remarkably sticky, as is Appen's and Altium's – leading me to have faith in these companies' long-term prospects.
Foolish takeaway
I remain bullish on all of the WAAAX shares in 2020. However, I still think pricing is an issue. If I were to consider opening up a position in one of the WAAAX shares, it would have to be at March levels, not the levels we see today.
